International Tax Issues for Athletes and Entertainers: Residency, Tax Treaty Provisions, Mitigating Dual Taxation

Individuals increasingly travel abroad for work, and it is the nature of the business for many athletes and entertainers. Proper planning can mitigate the jurisdictional taxes for an American-based performer working outside the U.S. or a nonresident traveling to the U.S.

U.S. citizens, residents, and green-card holders are taxed on worldwide income regardless of whether it was earned within the U.S. or outside its borders. On the other hand, nonresidents are taxed on income effectively connected with the U.S. Since this is key to the taxation regime, tax advisers working with performers or athletes must be able to differentiate between the two. For Americans, incorporating can generate substantial tax savings; however, there are drawbacks to this classification that need to be understood.

In addition to structuring opportunities, there are special treaty benefits and exclusions available for nonresident performers who reside in treaty jurisdictions and central withholding agreements (CWAs) with the IRS than can aid in reducing the burden of withholding taxes.

Listen as our panel of foreign taxation experts discusses determining U.S. residency status, incorporating to save taxes, unique treaty benefits, and reduced withholding opportunities for U.S. performers working abroad and nonresidents with ties to the U.S.

1. Overview
2. U.S. resident athletes and entertainers
3. Nonresident athletes and entertainers
4. Structuring opportunities and considerations
5. Tax treaty relief
6. Withholding obligations

The panel will explain these and other critical issues:

• Applying U.S. residency tests
• Benefits of special treaty exclusions and benefits for performers
• Utilizing a central withholding agreement with the IRS as a withholding alternative
• Steps to take to reduce the effective tax rate for performers

Learning Objectives

After completing this course, you will be able to:

• Identify common treaty benefits available to performers
• Ascertain differences between resident and nonresident status
• Determine which performers may benefit from incorporating
• Decide when a CWA may reduce required withholding for an athlete

• 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 pass-through taxation, including taxation of partnerships, S corporations and sole proprietorships, qualified business income, net operating losses and loss limitations; familiarity with net operating loss carry-backs, carry-forwards and carried interests.

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).