Section 959 PTEP Categories and Ordering Rules for Controlled Foreign Corporation Distributions

Notice 2019-1 New PTEP Groupings, Intersection of Section 959, 904 and 1248, Treatment of PTEP in Excess of Current E&P

A live 110-minute CPE webinar with interactive Q&A


Wednesday, September 25, 2019 (in 3 days)

1:00pm-2:50pm EDT, 10:00am-11:50am PDT

or call 1-800-926-7926

This webinar will provide U.S. shareholders of controlled foreign corporations (CFCs) and their tax advisers with an overview of the previously taxed earnings and profits (PTEP) proposed guidance from Notice 2019-01. The panel will discuss the latest IRS guidance on ordering rules, detail the PTEP groups, and detail the federal tax implications to distributions of PTEP.

Description

PTEP presents unique issues and complexity for U.S. shareholders of CFCs. Section 959 and its related guidance can significantly alter the federal tax implications to CFC distributions. Treasury acknowledges PTEP as "complex rules with administrative and compliance challenges."

Treasury issued Notice 2019-1, which announced Treasury's intent to issue regulations addressing certain issues arising from the TCJA with respect to foreign corporations with PTEP. The Notice provides that forthcoming regulations will provide that annual PTEP accounts must be maintained and each annual PTEP account should be segregated into different groups as detailed in the Notice.

The forthcoming regulations are expected to apply to taxable years of U.S. shareholders ending after December 14, 2018 and to taxable years of foreign corporations ending with or within such taxable years of U.S. shareholders. U.S. shareholders may rely on the guidance provided in the Notice pending issuance of regulations provided certain conditions are satisfied.

Listen as our authoritative panel of international tax practitioners reviews the guidance provided in Notice 2019-01.

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Outline

  1. Summary of previously taxed income rules before Notice 2019-01
  2. Elements of Section 959
    1. Section 959(a) exclusion from gross income of U.S. persons
    2. Section 959(b) exclusion from gross income of certain foreign subsidiaries
    3. Section 959(c) allocation of distributions
  3. Groups of PTEP from Notice 2019-01 requiring a separate annual accounting
  4. Ordering rules for distributions to U.S. shareholders from CFCs

Benefits

The panel will discuss these and other relevant issues:

  • New PTEP groups discussed in Notice 2019-1
  • Rules for separate accounting of each PTEP group
  • Federal tax implications when PTEP distributions exceed current year E&P

Faculty

Dokko, Sean
Sean Dokko, J.D., LL.M.
Managing Director, National Tax Office - International Tax Services
BDO USA

Mr. Dokko focuses on international tax planning and consulting for both inbound and outbound clients. He has experience...  |  Read More

Dougherty, Alison
Alison N. Dougherty, J.D., LL.M.

Director, Tax Services
Aronson

Ms. Dougherty specializes in U.S. international tax reporting, compliance, consulting, planning, and structuring as a...  |  Read More

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