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New IRS Foreign Compliance Initiatives: FATCA Accuracy Exams, Offshore Service Providers, 1120F Waiver Processes

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, February 26, 2019

Recorded event now available

This course will provide corporate tax professionals with a practical guide to three recently announced IRS LB&I international compliance initiatives that will impact U.S. corporations with offshore holdings. The panel will discuss the IRS enhanced focus on offshore service providers, the FATCA accuracy initiative, and the new waiver processes for Form 1120F Delinquencies.

Description

On Oct. 30, 2018, the IRS Large Business and International (LB&I) Division announced three compliance campaigns aimed at U.S. taxpayers with offshore activities. Each of these initiatives may present tax advisers to U.S. businesses engaged in foreign activities with new tax liabilities and sanctions.

The new campaigns include a focus on "offshore service providers," foreign individuals or companies that "facilitated in the creation of foreign entities to conceal the beneficial ownership of foreign financial assets or accounts" for purposes of tax evasion. U.S. corporations with offshore tiered structures must examine holdings to ensure they comply with foreign asset disclosure requirements.

Additionally, the LB&I Division is conducting a FATCA accuracy initiative, targeting incomplete or inaccurate disclosure of foreign assets on Form 8638 through examination and enhanced focus.

The Service also has made significant changes to its processes for evaluating and granting waivers for delinquencies in filing Form 1120-F, U.S. Income Tax Return of a Foreign Corporation. The IRS issued a memorandum spelling out the new procedures and announced its intent to scrutinize Form 1120-F non-filers in its audit "campaigns" published in 2017. Taxpayers with delinquent 1120-F filings should consider taking remedial measures, including submitting a waiver request under the new procedures.

Listen as our experienced panel provides a practical guide to the new IRS LB&I Division compliance campaign initiatives for U.S. taxpayers with offshore activities.

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Outline

  1. Prior LB&I Division foreign reporting compliance campaigns and new campaigns announced in 2018
  2. Expiration of OVDP and new Voluntary Disclosure Program
  3. Form 1120-F delinquency and waiver request changes
    1. Filing a delinquent Form 1120-F voluntarily when the taxpayer reports without an IRS examination
    2. Proceeding with filing waiver request in cases where an IRS examination of the taxpayer reveals noncompliance
  4. Factors considered in the Form 1120-F waiver summary analysis
  5. FATCA accuracy initiative
  6. Offshore service providers and potential for abuse and asset nondisclosure

Benefits

The panel will discuss these and other important topics:&

  • Identifying what constitutes an impermissible use of an "abusive tax scheme" by an offshore service provider, and what measures the LB&I Division may use to discover abuses by these providers
  • What tools might the IRS employ in its FATCA accuracy initiative?
  • The specific changes to the 1120-F delinquent submittal and waiver request submission process under the new guidance

Faculty

Colvin, John
John M. Colvin
Partner
Colvin & Hallett

Mr. Colvin's practice emphasizes federal tax controversies and white-collar criminal defense. He is a frequent...  |  Read More

Lee, Matthew
Matthew D. Lee
Partner
Fox Rothschild

Mr. Lee is a former U.S. Department of Justice trial attorney who concentrates his practice on all aspects of white...  |  Read More