Repatriation Tax Audits: Managing IRS Enforcement Actions and Strategies for Tax Professionals

The IRS announced the enforcement of Section 965's repatriation tax. Taxpayers must focus on their calculation of earnings and profits, classification of assets, and methodology used to determine foreign tax credits to identify potential audit triggers and avoid unintended tax liability.

Under current tax law, U.S. taxpayers have the opportunity to defer U.S. tax on foreign income and profits. However, many individuals and companies--even the largest multinational firms--will need to repatriate some of or all foreign-source earnings. The tax consequences of repatriating income depend upon not only the character of the gain or income held abroad but also the nature of the foreign entity that earned the income.

The IRS will start conducting repatriation tax audits focused on certain issues with taxpayers' calculation of Section 965 inclusions. Tax counsel and advisers must have a thorough grasp of tax rules and operational implications of repatriating foreign-source income held offshore to avoid costly tax consequences.

Listen as our experienced panel provides a practical guide to the tax opportunities, pitfalls, and strategies of repatriating foreign-source income. The panel will also offer strategies for tax counsel and advisers for handling IRS enforcement actions and audits.

1. The tax regime for foreign-source income and gains
2. Impact of foreign entity classification on repatriation treatment
3. Repatriation options
   1. Cash vs. non-cash or non-liquid assets
   2. Deductions and calculations
4. Audit triggers and handling IRS enforcement actions

The panel will review these and other key issues:

• Repatriation issues for individual and small business taxpayers
• Identifying deductions and credits which would reduce taxable income on repatriation
• Recognizing repatriation audit triggers
• Navigating IRS enforcement actions and audits

Learning Objectives

After completing this course, you will be able to

• Identify components of cash vs. non-cash accumulated untaxed foreign income subject to transition tax
• Determine how to calculate transition tax for both cash and non-cash E&P
• Ascertain methods in minimizing repatriation tax
• Recognize repatriation audit triggers
• Ascertain methods in managing IRS enforcement actions and audits

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Knowledge of, and familiarity with, the foreign-source income tax reporting rules, Subpart F inclusions, Controlled Foreign Corporations determination, Foreign Account Tax Compliance Act and its reporting requirements.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).