Thursday, February 14, 2013

US Changes Proposed To US Tax Reporting Rules For "Outbound" Transfers

MONDAQ

14 February 2013
Article by Marc D. Teitelbaum, John L. Harrington, Jeffrey S. Korenblatt and Rich Williams

US IRS Proposes Amendments to "Gain Recognition Agreement" Rules, Clarifying Reporting Obligations
On January 30, 2013, the US Treasury Department (IRS) proposed amendments to existing gain recognition agreement ("GRA") regulations that apply to US persons who transfer stock of a US corporation or a foreign corporation to a foreign corporation. 

The proposed changes to the GRA regulations address the consequences to US persons for failing to file GRAs and related documents (failure to file), to comply in any material respect with the terms of, or rules governing, GRAs (failure to comply), or to satisfy other reporting obligations. 

The proposed changes would affect not only future reorganizations and contributions of stock to foreign corporations, but also prior transfers that continue to be subject to GRA reporting. 

The proposed changes also provide similar failure to comply rules with respect to liquidating distributions to foreign corporations and certain other document filing requirements arising with a US person's transfer of stock or assets to certain foreign corporations.