Tax compliance and advisory services

Managing your company's tax strategy in the face of today's complex puzzle of rules and regulations can drain your time, money and resources. Grant Thornton's tax specialists will complement your team and maintain your auditor’s independence with our compliance services and customized tax planning advice.

Congress passes, president signs $10 billion in international tax increases

The president has signed into law legislation that includes international tax provisions estimated to raise $10 billion over the next 10 years. The House approved the legislation by a vote of 247-161 on Tuesday; the Senate passed this legislation last week. The international tax revenue raisers would make significant changes to international tax rules and would affect numerous multinational companies. The provisions cover:

foreign tax credit splitting,
foreign tax credit covered asset acquisitions,
foreign tax credits and resourcing under tax treaty,
the "Hopscotch" Section 956 limit for foreign tax credits,
foreign subsidiary redemptions, and
affiliation rules for interest expense and the repeal of 80/20 rules.

The new Chapter 4 withholding regime directed at Foreign Financial Institutions

The Hiring Incentives to Restore Employment Act enacted on March 18 included several international revenue raisers originally proposed in the Foreign Account Tax Compliance of 2009 (FATCA). Included in that legislation was the creation of a new withholding regime under Chapter 4 of the Internal Revenue Code entitled "Taxes to Enforce Reporting on Certain Foreign Accounts." This new withholding regime is directed at certain withholdable payments made to Foreign Financial Institutions (FFIs) and other foreign entities. Although these new withholding rules generally are effective for payments made after Dec. 31, 2012, taxpayers will need to begin evaluating these rules today because of the administrative complexities that they will impose.

IRS provides relief under gain recognition agreement rules

The IRS issued an LMSB Directive on July 26, 2010, that provides guidance relating to certain gain recognition agreements (GRAs) that may not satisfy the requirements of Treas. Reg. Sec. 1.367(a)-8(c)(2). The memorandum could provide relief to taxpayers who have filed incomplete GRAs. To avoid gain recognition, the U.S. person may be required to file a GRA under the Section 367(a) regulations.

U.S. Department of Labor provides further guidance regarding transition relief

The U.S. Department of Labor has published Form 5500 revisions and related final regulations that eliminate special limited reporting for Section 403(b) plans, effective for plan years beginning on or after Jan. 1, 2009. Under the new annual reporting rules, “large” ERISA-covered 403(b) plans are required to file audited financial statements with their Form 5500. The transition relief provides that the administrator of a 403(b) plan does not need to treat annuity contracts and custodial accounts as part of the employer’s Title I plan or as plan assets for purposes of ERISA’s annual reporting requirements, if certain conditions are met.

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