Section 965 Payment Acceleration Events: Avoiding Triggers, Curable Events

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


Conducted on Tuesday, August 24, 2021

Recorded event now available

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Course Materials

This course will point out specific actions that accelerate the deferred payment of tax on repatriated earnings under IRC Section 965. Our veteran panel of foreign tax experts will discuss which actions are curable, how to cure these, and identify ways to avoid activities triggering the acceleration of payments due on this substantial deferred tax liability.

Description

The 2017 tax act included a mandatory repatriation tax on a taxpayer's allocable share of unrepatriated earnings from certain foreign corporations. Any U.S. taxpayer directly, indirectly or constructively owning 10 percent or more of specified foreign corporations was subject to immediate taxation if the taxpayer did not make a proper election under Section 965. Electing taxpayers were permitted to spread the payment of this tax liability over eight years, interest and penalty-free. Shareholders owning foreign stock through an S corporation could elect to defer the payment indefinitely.

Subsequent transactions and events can accelerate these deferred payments. Missed payments, the sale of a business, and the death of a taxpayer are a few examples of events that can accelerate the balance due. Concurrent with acceleration events, the regulations offer several ways to circumvent immediate taxation. Curable events include liquidations, disposal of substantially all assets, and a corporation becoming a consolidated group member. Planning to avoid or prevent the acceleration of this considerable liability is key.

Listen as our panel of international tax experts explains how to avoid and mitigate unintended consequences of transactions and actions that accelerate Section 965 transition tax payments.

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Outline

  1. Overview
  2. Installment elections and acceleration events
  3. S corporation shareholder deferral and acceleration events
  4. Curable events
  5. Situations where acceleration events may occur
  6. Best practices

Benefits

The panel will review these and other critical issues:

  • Specific events that will accelerate Section 965 tax payments
  • How a taxpayer's death, expatriation or other similar events impact Section 965 payment obligations
  • How tax implications of acceleration liability differ by entity type when a business is sold
  • The party primarily liable for Section 965 payments when a business is transferred

Faculty

Kelly, Bryan
Bryan H. Kelly

Partner
Withers Bergman

Mr. Kelly has private practice and Big Four accounting firm experience advising clients on a multitude of tax matters,...  |  Read More

Sczudlo, Paul
Paul Sczudlo

Of Counsel
Withers Bergman

Mr. Sczudlo has over 35 years of experience focused on global planning matters. He is widely recognized for his...  |  Read More

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