Prose by Tax Pros

Imagine a world where you could create a retirement plan in a foreign country with which you have no affiliation, contribute appreciated property to such plan without triggering immediate taxation, face no limitations on the contributions you can make, defer taxes on the accretion inside the plan, start taking distributions as early as age 50, and avoid tax on the majority of the distributions from the plan. Many U.S. taxpayers, relying on flexible interpretations of the bilateral treaty between Malta and the United States, took these positions for several years. The IRS put its proverbial foot down in late 2021, announcing that taxpayers were misconstruing the treaty, and that the IRS was committed to pursuing those who participated in or promoted such abuses. This article explains general U.S. tax treatment of foreign pensions, key aspects of the treaty, examples of taxpayers claiming auspicious results, terms of the recent Competent Authority Arrangement designed to halt future act...

After courts held that the IRS violated the law when it issued Notice 2017-10 classifying syndicated conservation easement transactions (“SCETs”) as “listed transactions,” the IRS scrambled to salvage the situation. In particular, it released Proposed Regulations in December 2022, which centered on information-reporting requirements for those involved with SCETs. About three weeks later, Congress enacted the Secure 2.0 Act. That legislation did not address disclosure duties; rather, it identified easement donations that would get a tax deduction of $0 if their value surpassed a certain amount. The disparate objectives, timing, terminology, and standards in the Proposed Regulations and Secure 2.0 Act have caused confusion among easement stakeholders. The attached article examines the current situation, as well as the actions leading up to it.  Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Cont...

  The IRS has long used mandatory disclosures by taxpayers on Form 8886 (Reportable Transaction Disclosure Statement) to discourage participation in reportable transactions and carry out enforcement campaigns. The IRS has taken a different approach in the past, though, when it comes to taxpayers taking positions on returns that might be considered aggressive, novel and/or divergent from existing guidance. The IRS favored the carrot, offering penalty protection to taxpayers on the condition that they adequately revealed their positions. The recent Green Book shows that the current Presidential Administration is advocating all stick, and no carrot, when it comes to disclosures to the IRS. This article gives taxpayers and their advisors key information about this important, evolving issue.  Read the full article here. About Hale E. Sheppard HALE E. SHEPPARD, Esq. (B.S., M.A., J.D., LL.M., LL.M.T.) is a Shareholder in the Tax Controversy Section of Chamberlain Hrdlicka and Chair ...