The IRS today released a list of “frequently asked questions” (FAQs) about return filing and tax payment obligations relating to the “transition tax” under new Code section 965.
The new tax law (Pub. L. No. 115-97, enacted December 22, 2017) added section 965 to the Code. In general, section 965 requires United States shareholders to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.
The list of FAQs is to be used by taxpayers in filing 2017 tax returns that report amounts under section 965. The FAQs (and related indices) provide guidance concerning the following questions:
Initial impressions of today's FAQs on section 965 reveal the following:
A related IRS release—IR-2018-53—notes that the IRS has already released Notice 2018-7, Notice 2018-13, and Rev. Proc. 2018-17 concerning section 965, and that future additional guidance will be released “in the weeks ahead.”
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