Mr. Cope monitors the development of U.S. tax law daily through postings on government websites, daily tax publications, monthly tax journals, tax newsletters, tax conferences and meetings of professionals organizations in New York and Washington. Each month he publishes the Tax Insights Blog, which describes and analyzes significant U.S. tax developments (e.g., judicial decisions, regulations, proposed tax legislation) having cross-border tax consequences. The blog's content should be of interest to U.S. businesses with foreign operations and businesses headquarted outside the United States with U.S. investments or U.S. operations.
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IRS to Issue Guidance on Sale of Partnership Interests by Non-U.S. Persons
The IRS plans to issue guidance under section 864 relating to sales of certain partnership interests by non-U.S. persons. This guidance likely is intended to bolster the position taken by the IRS in Rev. Rul 91-32.
First Circuit’s Opinion in Sun Capital is Disquieting for Investors in Private Equity
On July 24, 2013 the Court of Appeals for the First Circuit issued an opinion in Sun Capital Partners III, et. al. v. New England Teamsters & Trucking Industry Pension Fund finding that one of the three appellee private equity funds had a “trade or business” for purposes of determining whether the funds were liable for pension liabilities of a bankrupt company that the funds owned. This decision has been disquieting to investors in private equity funds (especially those in the First Circuit) because it is the first case to find such funds as having a trade or business under the pension law and thus potentially liable for certain pension liabilities of their portfolio companies.
New U.S. Corporate Tax Return Data Offer Insights on Inbound Investment
On July 9 the IRS released a report reviewing and analyzing corporate tax return data for 2010 (the “Report”). This is the latest year for which the IRS has released such data. The Report is of interest because it offers insights into the reported activities of non-U.S. companies carrying on business in the United States. A non-U.S. (foreign) corporation that is engaged in a U.S. trade or business during the taxable year is required to file a Form 1120-F (U.S. Income Tax Return of a Foreign Corporation) for that year.
Tax Court Considers Taxation of the Golfer Sergio Garcia
Nearly two years ago, in our July 2011 column, we discussed Goosen v. Commissioner, a case concerning the taxation of endorsement fees paid to professional golfer Retief Goosen, a U.K. tax resident and non-domiciliary. On March 14, 2013 the Tax Court issued an opinion in in a similar case involving another professional golfer, Sergio Garcia, a citizen of the Spain and a Swiss tax resident. The Garcia case is significant because it includes an interpretation of the artistes and sportsmen article (Article 17) of the Convention between the United States of America and the Swiss Confederation for the Avoidance of Double Taxation with Respect to Taxes on Income (the “Swiss Income Tax Treaty”).