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U.S. Tax Tips

Sep 17, 2019

New IRS program: Relief Procedures for Certain Former Citizens

As was discussed in our last U.S. Tax Tip, the IRS had announced a number of new compliance programs emanating from their Large Business and International (LB&I) unit.  We also had previously reported that one of the IRS compliance programs, the Offshore Voluntary Disclosure Program terminated on September 28, 2018.  The Streamlined Compliance Filings Procedures Program (both foreign and domestic), however, is still in effect.  It would appear that as time goes on and more taxpayers have become compliant that the value of these programs to the IRS diminishes. At some point in time, the Streamlined Compliance Filings Procedures will also come to an end.

Sep 03, 2019

Expanded IRS Compliance Programs

In a prior U.S. Tax Tip, (July 2018), we had outlined 5 new, at the time, compliance programs that the IRS Large Business and International division (LB&I) introduced.   On July 19, 2019 the IRS announced 6 new compliance programs, bring the total to 59.  These new programs are S Corporations Built in Gains Tax,
Post OVDP Compliance,
Expatriation,
High Income Non-filer,
S. Territories – Erroneous Refundable Credits,
Section 457A Deferred Compensation Attributable to Services Performed Before January 1, 2009. Two of these programs should be of interest to U.S. taxpayers who live outside of the United States.  Those two, being Post OVDP Compliance and Expatriation

Aug 19, 2019

Becoming a U.S. Tax Resident

Here at Cadesky U.S. Tax, we routinely receiving enquiries from clients who are either considering moving to the U.S. or who are spending a significant amount of time in the U.S.  They want to know on what basis they will be taxed.  One significant issue that must first be to determine their residency status for U.S. tax purposes.  It is common knowledge that a U.S. citizen is subject to U.S. taxation and filing requirements regardless of where they live in the world.  The question then becomes, for a non-U.S. citizen – when do they become a U.S. resident?

Tax Tips

Sep 09, 2019

Section 116 – A Case Study

A non-resident of Canada is subject to Canadian taxation on gains arising from the disposition of taxable Canadian property (“TCP”).  TCP includes many items but the most common one we see in practice is Canadian real estate.  Many non-residents selling Canadian real property often discover the purchaser is withholding 25% of the gross proceeds pending receipt of a “compliance certificate” from the non-resident.  In some cases, the withholding is 50%.  Our discussion today focuses on a non-resident’s reporting and withholding tax requirements under section 116 of the Income Tax Act (the “Act”) upon the sale of TCP and more importantly, how to reduce the withholding tax amounts. 

Aug 26, 2019

Earnout – Earn More on Your Way Out

It is not uncommon for the sale price of a business to be partially based on future events.  In these cases, an earnout is often used as a mechanism to determine a portion of the sale price based on achieving certain results for a period of time after closing of the sale.  For example, the parties may agree to an initial sale price of $5,000,000, with an additional $100,000 per year in any of the subsequent 5 years, if revenues increase by at least 5% in the year.  To keep things “simple” we will assume shares, not assets, are being sold.

Aug 12, 2019

Change in Use – The Unexpected Change

Occasionally, a taxpayer moves from his/her principal home into a new home and rents the old home out, or converts part of the home for a different purpose. Alternatively, he/she may move into one of his/her rental properties and turns it into a principal home. While this may not be an issue if the change is short term and temporary, a permanent change could give rise to a deemed disposition of the property for tax purposes. If not carefully managed, this deemed disposition can create undesirable results for these taxpayers.

Transfer Pricing Newsletter

Sep 27, 2017

Eaton A.P.A. cancellations were an abuse of I.R.S. discretion

This article appears in Insights vol. 4, Issue 9.  Insights… Read more »

May 29, 2017

Amazon makes the CUT – an important taxpayer win, a reminder to consider transactional evidence

This article also appears in the May issue of Insights,… Read more »

Dec 15, 2016

Is the CRA skipping dinner in the hope of getting its deserts? Digesting the “new” Canadian transfer pricing documentation standard

The CRA was recently asked “Will the CRA’s expectations of… Read more »