September 29, 2022

Insights Volume 9 Number 5: Updates & Other Tidbits

September 29, 2022/ Ruchelman P.L.L.C.

Two recent items of interest are addressed this month in Updates & Other Tidbits. The first is Franklin v. U.S., where the Fifth Circuit upheld the forfeiture of a U.S. passport in the context of a U.S. citizen who was seriously in tax debt to the I.R.S. Code §7345, allows the I.R.S. to effect the revocation of a U.S. citizen’s passport where a taxpayer owes more than $50,000 in tax, penalties, and interest. The taxpayer argued that international travel is a fundamental right of citizenship that was violated by the I.R.S. when it triggered forfeiture of his passport. The court disagreed, holding that a citizen has a fundamental right to travel within the U.S., but not internationally. The second item is an I.R.S. announcement that information on bank account interest will be exchanged automatically with Turkey when a Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting (Individuals)) has been provided by the account holder and indicates that he or she is a resident of that country. Wooyoung Lee addresses the case, explains the I.R.S. announcement, and lists all countries that receive information concerning interest received from U.S. bank accounts.

October 26, 2016

Global Exchange of Information: How Does the U.S. Fit into the Puzzle? Meet the U.S. Foreign Trust

October 26, 2016/ Ruchelman P.L.L.C.

In the context of a model 1 I.G.A. under F.A.T.C.A., the U.S. undertakes certain reciprocal information exchanges. But reciprocal may not mean equal. This produces interesting results when a U.S. foreign trust is formed by a foreign individual. Galia Antebi and Nina Krauthamer compare C.R.S. reporting and F.A.T.C.A. reporting in the context of a U.S. foreign trust that invests in U.S. assets producing tax-free income for a foreign investor.

June 30, 2016

The End of the Negotiation: Protocol to India-Mauritius Tax Treaty Finally Released

June 30, 2016/ Ruchelman P.L.L.C.

After several years of negotiations, a new protocol to the Mauritius-India Income Tax Treaty has been agreed between the parties. In a nutshell, India benefits from amended provisions that are in line with other bilateral treaties, while Mauritius benefits from the adoption of grandfathering provisions regarding capital gains from the disposition of certain shares. Investors in both countries will benefit from greater certainty in taxing outcomes. Anurag Jain and Parul Jain of Attorneys BMR & Associates L.L.P., Gurgaon, address the highlights of the new provisions.

February 29, 2016

Field Procedures for Handling Foreign-Initiated “Specific” Requests Under E.O.I. Agreements

February 29, 2016/ Ruchelman P.L.L.C.

Once again, Insights looks at the I.R.S.'s International Practice Units, this time focusing on how the I.R.S. deals with information exchanges at its field level. Sheryl Shah and Stanley C. Ruchelman explain the procedures followed by the Large Business & International (LB&I) division.

January 15, 2016

The Common Reporting Standard – A Global F.A.T.C.A.?

January 15, 2016/ Web Admin

The Common Reporting Standard ("C.R.S.") for the automatic exchange of information by financial institutions is now in effect for the 56 jurisdictions that are Early Adopters. How will the C.R.S. work and who will be affected? How does it interact with F.A.T.C.A. I.G.A.’s? Richard Addlestone of Solomon Harris, Grand Cayman answers these and other questions.

March 15, 2014

The O.E.C.D. Announces Global Standard for Automatic Exchange of Information

March 15, 2014/ Web Admin

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As we noted in our prior issue, the Leaders of the G-20 Summit endorsed automatic exchange of information reporting to combat tax evasion in September 2013. In particular, they stated:

We commend the progress recently achieved in the area of tax transparency and we fully endorse the OECD proposal for a truly global model for multilateral and bilateral automatic exchange of information. Calling on all other jurisdictions to join us by the earliest possible date, we are committed to automatic exchange of information as the new global standard, which must ensure confidentiality and the proper use of information exchanged, and we fully support the OECD work with G20 countries aimed at presenting such a new single global standard for automatic exchange of information by February 2014 and to finalizing technical modalities of effective automatic exchange by mid-2014. In parallel, we expect to begin to exchange information automatically on tax matters among G20 members by the end of 2015.

On February 13, 2014, the Organisation for Economic Co-Operation and Development (“O.E.C.D.”) announced a global standard for automatic exchange of financial account information. Over 40 countries made a joint statement an committed to an early adoption of this standard. On February 23, 2014, the G-20 finance ministers and central bank governors endorsed the proposal.