Navigating the Effectively Connected Income Tax Regime: Avoiding Devastating Impact on Taxes and Financial Statements

Implementing Compliant Tax Strategies to Avoid or Mitigate Punitive Taxation

Recording of a 110-minute CPE webinar with Q&A


Conducted on Thursday, March 23, 2017
Recorded event now available


This webinar will provide corporate tax professionals and advisors to multinational corporations (MNCs) and other multinational businesses with a detailed, practical and thorough guide to mitigate the risk of high levels of tax on effectively connected income (ECI). The panel will provide practical guidance with respect to tax planning and using fully compliant offshore companies to achieve a desirable overall effective tax rate in a multinational business.

Description

In recent years, the IRS, governmental authorities in many countries, the G-20, and the OECD are increasingly turning their attention to MNCs and multinational businesses that shift income to lower-taxed foreign jurisdictions to avoid or reduce business taxation. This global scrutiny is aimed at company profits that are effectively connected to a jurisdiction other than that claimed by the business.

The IRS’s successful application of the ECI rules against a noncompliant business may trigger significant tax and financial statement consequences. A failure to properly plan considering ECI risks can result in an effective tax rate of more than 50%. Such taxation may also cause significant financial statement tax revisions to properly reflect the allocation of income between the United States and foreign jurisdictions.

Listen as the panel provides tax executives, professionals and auditors with practical guidance to determine whether their company’s tax planning policies and procedures may be subjecting their company to ECI risks. Using illustrative examples, the panel will outline effective approaches to plan for multinational business planning, and to mitigate tax risks and potential government penalties.

Outline

  1. ECI and financial statement risks
    1. Background
    2. Overview of the ECI rules
    3. Growing IRS scrutiny of profit shifting and OECD base erosion and profit shifting (BEPS) initiative
  2. When an MNC or multinational business may be subject to the ECI risks
    1. Value drivers predominantly performed by U.S. group members
    2. U.S.-located control and decision-making
    3. Lack of foreign entity CEO and management capability
  3. Major issues for potentially vulnerable MNCs or Multinational Businesses
    1. Risk assessment
    2. Treaty Issues
    3. High tax liabilities and penalties
    4. Online Business Risks
    5. Financial statements
  4. Actions to mitigate risk
    1. Post-tax filing
    2. Current tax planning and filings
    3. Future tax planning

Benefits

The panel will cover these and other key issues:

  • What is ECI?
  • How can tax executives and advisors assess the risks of ECI and its impact on financial statements?
  • How can tax executives and advisors advise companies on avoiding high ECI tax liabilities and penalties?
  • What are the key steps to mitigate taxable ECI risks in the past, present and future?

Learning Objectives

After completing this course, you will be able to:

  • Ascertain how to evaluate ECI impact on financial statements
  • Discern how to assess the ECI impact on state income tax reporting procedures
  • Identify profit shifting structures involving considerable ECI risk
  • Establish processes to mitigate financial and tax risks associated with suspected ECI

Faculty

Steven Hadjilogiou, Partner
Baker & McKenzie, Miami

Mr. Hadjilogiou focuses his practice on tax planning. He has substantial experience advising on transfer pricing, tax-related intellectual property matters, Subpart F and foreign investment in US real property. He has also worked on the taxation of partnerships and corporations, and international corporate reorganizations. He also counsels on state and local tax, inbound and outbound transactional planning, and other corporate and real estate tax issues in several jurisdictions across the world. He has written numerous articles and presented on topics related to tax.

Daniel W. Hudson
Baker & McKenzie, Miami

Mr. Hudson, a member of the Firm’s Tax Practice Group, practices mainly in the areas of international tax planning for multinational entities and high net worth individuals. He routinely conducts comprehensive analysis of changes within the areas of inbound US real estate structuring, reorganizing existing entities into more tax efficient structures, estate and trust planning and implementation for non-resident aliens, exit tax applications, voluntary disclosures, portfolio debt structuring and other sophisticated cross-border tax issues. He has likewise addressed an array of tax issues in the domestic area, including deductibility of conservation easement donations and valuation discount applications.

Raimundo Lopez-Lima Levi, Founder and Managing Partner
Lopez Levi Lowenstein Glinsky, Coral Gables, Fla.

Mr. Levi is a CPA, a CVA, and is certified in financial forensics (CFF). With over two decades of experience, he has served as an auditor and tax adviser to both public and private companies in the United States with both domestic and overseas operations. He has extensive experience conducting internal and external financial investigations for both domestic and international entities. He currently serves as tax adviser to several multinational firms engaged in commercial real estate throughout the United States, Europe, Caribbean, Middle East and Latin America. He has conducted various operational audits, efficiency studies and studies of internal control structures for both domestic and foreign companies as well as translations of International Accounting Standards to the United States Generally Accepted Accounting Principles. 

Sean J. Tevel
Baker & McKenzie, Miami

Mr. Tevel is a member of the Firm’s Tax Practice Group. He primarily focuses on general international tax planning, subpart F planning, treaty issues, as well as general partnership and corporate taxation.


EA Credit

Enrolled Agent credit processing is available for an additional fee per person.

EA Processing $5.00


Recordings

Recorded Event

Includes full event recording plus handouts.

Note: Self-study CPE and EA credits are not offered on recorded events.

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IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).

Program Materials

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Program Materials

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EA Credit

Strafford is an IRS approved continuing education provider and this course is approved for 2 enrolled agent (EA) credit hours.

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Customer Reviews

It was an excellent program!!

Marni Odermann

Supervalue

I especially liked the examples illustrating the topics concepts.

Melinda Tompkins

Holly

Offered different view points and real life, practical examples.

Angela Chretin

Northrop Grumman

The webinar was fast paced and comprehensive.

Lorraine Round

SAP

Real life examples that we could relate to.  Keep up the great work.

Brett Terrebonne

Entergy

or call 1-800-926-7926

Federal Income Tax Advisory Board

David Bowen

Principal

Grant Thornton

Joseph Calianno

Partner, National Tax Office International Tax

BDO

Edward Froelich

Of Counsel

Morrison & Foerster

George Manousos

Partner

PricewaterhouseCoopers

Christian M. McBurney

Partner

Arent Fox

Alex Sadler

Partner

Morgan Lewis

Susan Seabrook

Shareholder

Buchanan Ingersoll & Rooney

Tom Windram

Managing Director & National Leader, Federal Tax Credits & Incentives

RSM McGladrey

or call 1-800-926-7926

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