The Financial Times of London reports that there are an estimated 1million US citizens and green card holders living overseas with 10% interest in a controlled foreign corporation (CFC) that may be affected by the transition tax. Financial Times June 5, 2018: “Expat Americans given one-year reprieve on US repatriation tax.” I’m not able to access the actual article, but the ACA has summarized. I’m providing their summary below in case it’s helpful to anyone:
The Internal Revenue Service has offered penalty, filing relief to many who are subject to the new
transition tax on foreign earnings.
The Internal Revenue Service has issued new guidance, saying that business owners with net tax liabilities under the repatriation tax provisions of less than $1m for 2017 will no longer face certain penalties or the risk of accelerating the l eight years’ worth of installment payments, assuming they elected to pay in installments. This buys time for payment of the first installment by pushing it to the due date for the second installment, generally April 15, 2019. Many taxpayers simply cannot meet the June 15, 2018 deadline. The payment can now be delayed for one year. A special, but narrowly worded, rule gives additional relief to some Americans abroad. Americans abroad “whose tax homes and abodes, in a real and substantial sense, are outside the United States” are given two additional months, until June 17, 2019. See IR-2-2018-131 (June 4, 2018) and Questions and Answers about Reporting Related to Section 965 on 2017 Tax Returns (June 4, 2018; Question 16) (https://www.irs.gov/newsroom/questions-and-answers-about-reporting-related-to-section-965-on-2017-tax-returns.) 'These rules definitely are not for the faint of heart, and people should not delay diving into them,” said Charles Bruce, Legal Counsel, ACA. ACA members are urged to pay close attention to the details as it is easy to fall outside the new extension rules'."
transition-tax-pr-180605.pdf (134.0 KB)