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International Practice Units (IPUs)

IRS advises its auditors on applying U.S. interest stripping limitation

IRS advises its auditors on applying U.S. interest stripping limitation

Interest Expense Limitation Computation under §163(j) (IBF/9423.05_04(2016)). In an International Practice Unit (IPU), IRS instructs its examiners on how to audit a corporation’s Code Sec. 163(j) computation, which operates to limit the deduction of certain interest expense for U.S. federal tax purposes (the so-called “earnings stripping” or “interest stripping” limitation). Debt that is placed into […]

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IRS discusses application of residual profit-split method to outbound IP transactions

IRS discusses application of residual profit-split method to outbound IP transactions

Residual Profit Split Method – Outbound (ISO/PUO/P_1.7_04(2014)) (Mar. 7, 2016). IRS has released a new international practice unit (IPU) illustrating the application of a specific transfer pricing method, the residual profit-split method (RPSM), to a transaction where a U.S. parent corporation (USP) licenses certain intangible property (IP) to its controlled foreign corporation (CFC) in exchange […]

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IRS instructs its auditors re taxpayer outbound transfer pricing documentation

IRS instructs its auditors re taxpayer outbound transfer pricing documentation

Review of Transfer Pricing Documentation by Outbound Taxpayers (ISO/PUO/P 1/7/02(2014)) (Mar. 4, 2016). In a new International Practice Unit (IPU), IRS outlines the audit steps for its examiners to follow in reviewing the transfer pricing documentation of a U.S. taxpayer that provides tangible property, intangible property, and/or services to foreign affiliates in exchange for payment […]

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Guidance on outbound transfer of foreign stock followed by check-the-box election

Guidance on outbound transfer of foreign stock followed by check-the-box election

Outbound Transfer of Foreign Stock (ISO/9411.08_04(2014)) (Feb. 4, 2016) Outbound Transfer of Foreign Stock Followed by Check-The-Box Election (ISO/9411.08_05(2014)) (Feb. 19, 2016). In new International Practice Units (IPUs), IRS provides additional guidance to its examiners on the proper treatment of an outbound (i.e., U.S.-to-foreign) transfer of foreign stock, with emphasis on transfers in conjunction with […]

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New guidance sheds light on arm’s length standard for interest on inbound intercompany loans

New guidance sheds light on arm’s length standard for interest on inbound intercompany loans

LB&I International Practice Service Transaction Unit, “Intercompany Interest Rates under the Situs Rule of IRC Section 482.” In a new International Practice Unit (IPU), IRS provides guidance to its examiners on whether the interest rate on a loan or advance from a foreign parent corporation (FPC) to a U.S. subsidiary (USS) (i.e., an inbound intercompany […]

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Internal IRS guidance explains international information exchange programs

Internal IRS guidance explains international information exchange programs

IRS has released three new International Practice Units (IPUs) providing guidance to its examiners on exchange of information (EOI) programs. “EOI” refers to the sharing of tax-related information between two or more countries for tax administration and enforcement purposes, generally under the provisions of U.S. income tax treaties and other international tax information sharing agreements. […]

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IRS addresses the meaning of “substantial” Form 5471 compliance for penalty purposes

IRS addresses the meaning of “substantial” Form 5471 compliance for penalty purposes

IRS has recently released a new International Practice Unit (IPU) providing guidance to its examiners on the monetary penalties applicable if certain categories of U.S. shareholders fail to comply with the reporting requirements on Form 5471 (Information Return of U.S. Persons With Respect To Certain Foreign Corporations). Referencing prior rulings and other guidance, the IPU […]

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IRS tackles subpart F sales & manufacturing branch rules in newly released IPUs

IRS tackles subpart F sales & manufacturing branch rules in newly released IPUs

In recently released new International Practice Units (IPUs), IRS has provided additional guidance to its examiners on the audit of foreign base company sales income (FBCSI), a category of subpart F income. These IPUs focus on supply chain structures with foreign sales and/or manufacturing branches (including disregarded entities) that may be used by U.S. multinationals […]

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Meet Paul Raymond

Meet Paul Raymond

Mr. Raymond is a sought after speaker in tax controversy law by many attorney, accountant, and business groups and at the request of the Internal Revenue Service, has presented programs at the IRS Nationwide Tax Forum, attended by tax professionals throughout the United States.

Additionally, he continues to be an active member in the Section of Taxation, American Bar Association, where he was the Past Chair of the Employment Taxes Committee.

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Member CA Bar Member Orange County Bar US Tax Court Attorney