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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Tax Preparer

Date & Time
  • event Date

    Tuesday, October 24, 2023

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

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

$197.00
CPE
ALL

This webinar will discuss U.S. taxation of foreign computer programs and cloud computing transactions. Our panel of international tax attorneys will explain U.S. sourcing rules for overseas digital commerce and the latest regulations relating to taxation and classification of computer-related business activity.

Faculty

Anthony V. Diosdi
Partner
Diosdi & Liu, LLP

Mr. Diosdi is an experienced trial lawyer who regularly defends individuals and corporations in matters involving tax controversies and government regulatory enforcement. He also has vast experience assisting clients who find themselves with unreported or undeclared bank accounts outside the U.S. Mr. Diosdi is acknowledged as one of the nation’s leading experts in contesting penalties associated with failing to file FBARs. In addition to representing clients in tax controversy matters, he advises clients on U.S. international tax matters, including tax planning with respect to their structures and transactions. In particular, Mr. Diosdi has experience advising on issues relating to tax treaties, pre-immigration planning for foreigners moving to the U.S., expatriation planning, tax planning for foreign companies doing business in the U.S., and subpart F income minimization. More recently, he has focused on helping clients navigate U.S. tax reform, including the regimes for Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income, and the new limitations on foreign tax credits.

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Kerrin N.T. Liu
Partner
Diosdi & Liu, LLP

Ms. Liu focuses on civil tax litigation, representation before Internal Revenue Service Criminal Investigations, domestic tax compliance, and international tax compliance. She has represented clients as second chair in trials before the United States Tax Court.  Kerrin also handled Internal Revenue Service, State of California, and FBI criminal investigation cases involving individuals and business entities. In addition, Ms. Liu has assisted clients in a broad range of tax resolution cases.

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Description

Foreign businesses' passive income is taxed at 30 percent in the U.S., while income effectively connected with a U.S. trade or business is taxed at graduated rates after allowable deductions. Although U.S. residents are subject to tax on worldwide income, foreigners are only subject to U.S. tax on U.S. source income. Taxation of income varies significantly depending on how income is classified. Whether income is sourced to the U.S. and its income type are critical, complex determinations.

New technology and the dramatic expansion of electronic commerce have challenged existing taxation rules. Recent treasury regulation Section 1.861-18 defines a computer program as "a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result." If this income earned is service income, it is sourced based on the place of performance. Foreign persons providing services in their country of residence would not be subject to U.S. taxation. The same individual receiving U.S. source income from intangible property would be subject to U.S. taxation. Even when income is clearly service income, deciding where the service is performed is problematic.

Recently released regulations outline criteria for classifying cloud transactions as either a lease of property or the provision of services. In order to minimize taxes paid on cross-border digital transactions, international tax practitioners must stay abreast of the latest developments.

Listen as our panel of international tax planning experts reviews recent legislation on U.S. taxation of cross-border digital transactions and offers tips to mitigate or eliminate U.S. tax liability.

Outline

  1. Foreign computer and cloud transactions: an introduction
  2. Taxation of U.S. source income
  3. Character of income
    1. Service
    2. Intangible
    3. Copyright
    4. Royalty
  4. Proposed Section 861 regulations
  5. Best practices

Benefits

The panel will cover these and other critical issues:

  • Distinguishing whether a cloud transaction is a lease of property or provision of services
  • Determining whether specific digital transactions are U.S. or foreign sourced income
  • How proposed regulations under Section 861 affect taxation of digital transactions
  • What is considered copyright income and how it is taxed

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify methods for determining where services are provided
  • Determine how advancing technology challenges existing tax guidelines
  • Decide how to classify certain categories of digital transactions
  • Ascertain key differences in taxation of U.S. source and foreign sourced income

  • 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 preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

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).