Set of Questions and Answers Released on Reporting and Paying Section 965 Transition Tax for 2017
The IRS announced the publication of a set of questions and answers related to the tax imposed under IRC §965 under changes made by the Tax Cuts and Jobs Act in News Release IR-2018-53. The questions and answers are published in the form of a frequently asked question document (FAQ) on the IRS website at:
The news release notes that the IRS had previously provided some guidance on IRC §965 issues in Notices 2018-07 and 2018-13 and Revenue Procedure 2018-17. The IRS describes the purpose of these questions and answers in the news release as follows:
As the March 15 and April 17 deadlines approach for various filers, the IRS released information today in a question and answer format. The Frequently Asked Questions address basic information for taxpayers affected by section 965. This includes how to report section 965 income and how to report and pay the associated tax liability. The information on IRS.gov also provides details on several elections under section 965 that taxpayers can make.
As the FAQ notes, this provision of the TCJA imposes a tax due on 2017 returns of affected taxpayers. For example, tax may due from a calendar year U.S. shareholder holding an interest in a calendar year specified foreign corporation that needs to be reported and paid with the 2017 return.
I've written an article outlining the highlights of the provisions that you can download below: