The IRS recently provided guidance for taxpayers affected by Section 965 of the Internal Revenue Code. In general, Section 965 requires U.S. shareholders to pay a transition tax on the untaxed foreign earnings of certain foreign corporations as if those earnings had been repatriated to the United States. The Frequently Asked Questions page released by the IRS describes how to report Section 965 income and how to report and pay the associated tax liability. The FAQ also provides information about several elections available to taxpayers under Section 965. The recently released guidance is particularly opportune for those taxpayers who owe Section 965 transition tax with their 2017 calendar year tax return.
Additionally, to help the tax community follow updates related to the Tax Cuts and Jobs Act, the IRS recently created a special webpage to highlight provisions of the new law. The frequently updated page will provide quick links to news releases, Frequently Asked Questions, and other information related to TCJA.
As always, please feel free to contact us if you have any questions related to foreign financial assets or implications of the new tax reform. We will continue to monitor the changes closely and update you with any pertinent information.