Recent IRS Crackdown on Abusive Trust Arrangements: Taxation, Audit Triggers, Reporting, DNI, Foreign Trusts

Recording of a 90-minute CLE/CPE video webinar with Q&A

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Conducted on Tuesday, April 26, 2022

Recorded event now available

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Course Materials

This CLE/CPE webinar will provide guidance to trusts and estates attorneys and tax professionals on recent IRS enforcement actions and examinations focused on abusive trust arrangements. The panel will discuss key areas of focus by the IRS in examining trust arrangements and related transactions, taxation of trusts and audit triggers, reporting issues and potential civil and criminal penalties, distributable net income (DNI), foreign trust challenges, and other items that are prime targets for an IRS examination of certain trust arrangements.

Description

In the past year, the IRS has continued to crack down on abusive trust arrangements and transactions involving various trust types and planning techniques. Estate planners must ensure compliance with the Internal Revenue Code (IRC) and avoid any IRS examination triggers when structuring trusts and related transactions.

To combat abusive tax avoidance schemes, the IRS has issued numerous notices and guidance with an intense focus on how taxpayers utilize trusts. The IRS recognizes various types of legal trust arrangements commonly used for estate planning, charitable purposes, and holding of assets for beneficiaries. The income of a trust, from either foreign or domestic sources, is taxable to the trust, the beneficiary, or the grantor unless specifically exempted under the IRC. The distribution of income and any deductions appear to be the primary source of abusive trust arrangements in addition to provisions within trust documents and certain transactions.

Estate planners must grasp key concepts regarding the taxation of trusts under Subchapter J, the deduction for DNI, trusts and gift tax reporting obligations, issues stemming from foreign trusts, and other critical issues.

Listen as our panel discusses key areas of focus by the IRS in examining trust arrangements and related transactions, taxation of trusts and audit triggers, reporting issues and potential civil and criminal penalties, DNI, foreign trust challenges, and other items that are targeted in an IRS examination of certain trust arrangements.

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Outline

  1. Applicable tax rules and trust structures
  2. Recent IRS enforcement initiatives
  3. Trust filing requirements
    1. Domestic trusts
    2. Foreign trusts
  4. Best practices for estate planners and taxpayers

Benefits

The panel will discuss these and other key issues:

  • What are the applicable tax rules and reporting obligations for domestic and foreign trusts?
  • What are the areas of focus by the IRS regarding abusive trust arrangements and transactions?
  • How can estate planners and taxpayers avoid potential audit triggers in trust structuring and transactions?
  • What are the key provisions or modifications available for trust documents in light of the IRS crackdown on trust arrangements?

Faculty

Bedosky, John
John R. Bedosky
Partner
Hinman Howard & Kattell

Mr. Bedosky is a partner in Hinman, Howard & Kattell’s Trusts, Estates, and Wealth Planning Practice Group....  |  Read More

Capdevielle, Cliff
Cliff Capdevielle
Managing Attorney
Moskowitz

Mr. Capdevielle has been developing sophisticated tax planning strategies and resolving tax disputes for clients more...  |  Read More

Roberts, Matthew
Matthew L. Roberts, J.D., LL.M.
Principal
Freeman Law

Mr. Roberts devotes a substantial portion of his legal practice to helping his clients successfully navigate and...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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