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IRS adds section 965 compliance campaign under TCJA (LB&I division)

IRS adds section 965 compliance campaign under TCJA

The IRS Large Business & International (LB&I) division today continued to expand its list of compliance campaigns by adding one new campaign concerning the implications for individual taxpayers of section 965 as added to the Code by the 2017 tax law (Pub. L. No. 115-97 or the law that is known as the “Tax Cuts and Jobs Act” (TCJA)).

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As noted on the IRS website (July 6, 2020), the new campaign is described as follows:

Pursuant to the changes to IRC §965 under the Tax Cuts and Jobs Act, U.S. shareholders, including individuals, that directly or indirectly own at least 10% of the stock of a specified foreign corporation (SFC) are required to include in gross income their share of the SFC’s accumulated post-1986 deferred foreign income for the last taxable year of the SFC beginning before January 1, 2018, and report this amount on their returns for the taxable year in which or with which their SFC’s taxable year ends (generally, 2017 and/or 2018). The Internal Revenue Service will address noncompliance through soft letters and examinations.

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