close
Share with your friends

IRS adds FAQs on filing transfer agreements, Code section 965

FAQs on filing transfer agreements, Code section 965

The IRS has updated a list of “frequently asked questions” (FAQs) about return filing and tax payment obligations relating to the “transition tax” under new Code section 965.

1000

Related content

The newly added FAQs were indicated by the notation “Posted: 11/06/2018” on the IRS website, and concern the time and place for filing transfer agreements under section 965. Read the updated FAQs at: Questions and Answers about Reporting Related to Section 965 on 2017 Tax Returns on the IRS website.

FAQs on transfer agreements

The new FAQs are as follows:

Q18: When and where can I file a “Transfer Agreement Under Section 965(h)(3)”and “Transfer Agreement Under Section 965(i)(2)(C)” (hereafter, “Transfer Agreement”)?

A18: You may file a Transfer Agreement at IRS’ Memphis Compliance Service Collection Operations at the following address:  

Memphis CSCO5333

Getwell Road MS 81

Memphis, TN 38118

Transfer Agreements will be considered timely filed if filed by the date provided in the final regulations under section 965.

Posted: 11/06/2018

 

Q19: In addition to the terms of agreement that are required to be included in a Transfer Agreement Under Section 965(h)(3) under the proposed regulations, will the IRS need any additional information from an eligible section 965(h) transferee in order to properly process a Transfer Agreement Under Section 965(h)(3)? 

A19:  Yes, for the IRS to properly process a Transfer Agreement, an eligible section 965(h) transferee must consent to the immediate assessment of the portion of the eligible section 965(h) transferor’s section 965(h) net tax liability remaining unpaid in the Transfer Agreement. This may be done in one of the following manners: 

(i) Transfer Agreements may include the following statement directly above the perjury jurat and the signatures of the eligible section 965(h) transferor and eligible section 965(h) transferee:

By signing this transfer agreement, [the eligible section 965(h) transferee] waives the right to a notice of liability and consents to the immediate assessment of the portion of the eligible section 965(h) transferor’s section 965(h) net tax liability remaining unpaid, as shown in paragraph [insert paragraph number of the transfer agreement].  [The eligible section 965(h) transferee] understands that by signing this agreement, [the eligible section 965(h) transferee] will not be able to contest this liability in Tax Court, except as additional transferee or fiduciary liability is determined for this year; or 

(ii) An eligible section 965(h) transferee may include an executed Form 870T, Waiver of Restrictions on Assessment and Collection of Transferee or Fiduciary Liability, with the Transfer Agreement Under Section 965(h)(3) filed with the IRS, as described in A18, consenting to the immediate assessment of the portion of the eligible section 965(h) transferor’s section 965(h) net tax liability remaining unpaid as set forth in the Transfer Agreement Under Section 965(h)(3).

The IRS will not be able to process a Transfer Agreement Under Section 965(h)(3) until such time as the eligible section 965(h) transferee has consented to the immediate assessment of the portion of the eligible section 965(h) transferor’s section 965(h) net tax liability remaining unpaid as set forth in the Transfer Agreement under Section 965(h)(3).  While the eligible section 965(h) transferor’s section 965(h) net tax liability remaining unpaid will be immediately assessed against the eligible section 965(h) transferee, the remaining installments will not become immediately due as long as the eligible 965(h) transferee agrees to be liable for the remaining installments in the same manner as the eligible 965(h) transferor and meets other requirements of section 965(h).  Transfer agreements filed before the date provided in the final regulations under section 965, including transfer agreements filed in reliance on the proposed regulations, will be subject to any additional information requests issued by the Commissioner pursuant to proposed §1.965-7(b)(3)(iii)(C)(1).

Posted: 11/06/2018

 

Q20:  If I have previously filed my Transfer Agreement Under Section 965(h)(3) or Section 965(i)(2)(C) on or before the publication date of this FAQ, what actions should I take?

A20:  If you have previously filed a Transfer Agreement, the Transfer Agreement should be filed again at the IRS office set forth in A18. If a Transfer Agreement Under Section 965(h)(3) does not contain the consent language set forth in A19, the IRS will not be able to process the Transfer Agreement until such time as the eligible section 965(h) transferee has consented to the immediate assessment of the portion of the eligible section 965(h) transferor’s section 965(h) net tax liability remaining unpaid as set forth in the Transfer Agreement Under Section 965(h)(3). To be processable by the IRS, the Transfer Agreement Under Section 965(h)(3) may either (i) include the language provided in A19 or (ii) the eligible section 965(h) transferee may execute and attach a Form 870T to the refiled Transfer Agreement. If a Transfer Agreement is submitted without the consent language or a Form 870T, the IRS will request that the transferee execute a Form 870T.

Posted: 11/06/2018

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal