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Beneficial Ownership Information Report

Starting this year, most companies doing business in the US must report information about their beneficial owners (“BOI” or “BOI report”) to the US Department of Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement is based on the Corporate Transparency Act (“CTA”) enacted by Congress in 2021 to prevent money laundering, tax fraud, and other illicit activities. […]

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Target Company: Be Careful in Changing its Tax Status Preacquisition at the Insistence of the Acquiror

Tax Reminders for Target Companies in Mergers & Acquisitions

Target companies in mergers and acquisitions are often directed by the acquiror to change its tax classification preacquisition for U.S. tax purposes.  There are several reasons that an acquiror may request the target company to change its tax classification.  For example, the acquiror may not want an entity taxed as a c-corporation in its portfolio of companies.  […]

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Immediate Action to Apply for the ERC – Voluntary Disclosure Program

Immediate Action to Apply for the ERC – Voluntary Disclosure Program

It is important for employers who made questionable claims for the Employee Retention Credit (“ERC”) to take immediate action to determine whether the ERC Voluntary Disclosure Program (“ERC VDP”) is their best compliance option.  Since the ERC required no formal approval process other than the employer to file their employment tax returns or amended employment tax returns, there was huge potential for abuse that promoters heavily marketed. The deadline for an employer to apply for the ERC VDP is March 22, 2024.  […]

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U.S. Taxation of Foreign Nationals Working in the U.S., Including Planning Opportunities

As multinational corporations continue to expand their operations globally, they must navigate a complex web of tax regulations and laws. It is essential that they take a comprehensive approach to tax planning and not make decisions solely based on the U.S. tax implications. […]

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U.S. Taxation of U.S. Citizens and U.S. Tax Residents Residing Overseas

U.S. Taxation of U.S. Citizens and U.S. Tax Residents Residing Overseas | Klug Counsel

U.S. citizens and U.S. tax residents (“U.S. Persons”) are taxed in the United States on their worldwide income no matter where in the world they reside. The U.S. taxes based on citizenship, which is different than almost all other countries in the world that tax based on residence.

This often catches U.S. Persons who have never lived in the U.S. or have lived abroad for a number years by surprise. Any U.S. Person living abroad with income for tax year 2022 above the following thresholds must file a U.S. tax return:
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Tax Implications of Exiting a Controlled Foreign Corporation

Tax Implications of Exiting a Controlled Foreign Corporation

The income of a foreign corporation is not subject to federal corporate income tax unless the foreign corporation has income that is effectively connected with a U.S. trade or business (or permanent establishment as provided in an applicable tax treaty) or consists of certain types of U.S. source fixed or determinable annual or periodic income (“FDAP”).  A foreign corporation’s income from operations outside the U.S. is not subject to U.S. corporate income tax unless special rules apply. […]

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Tax Implications of Exiting a Domestic C Corporation

Tax Implications of Exiting a Domestic C Corporation

Wealthy international families are choosing U.S. situs trusts over the typical offshore trust jurisdictions. In choosing a trust jurisdiction, the extremely wealthy seek the best security, most privacy, best income, lowest taxes, and lowest costs. While the extremely wealthy often utilize these trust structures, they are in no way limited to the extremely wealthy and are often used by high-net-worth individuals (i.e., more than a million in assets). For many, it is also important to diversify their asset holdings outside their country of residence. Powerful trust laws, tax savings, asset protection and privacy, as well as solutions to political and regulatory concerns, all combine to make the U.S. the trust situs of choice. […]

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Why Are the Global Elite Using U.S. Trusts? (It’s not to get their head on Mt. Rushmore)

Why Are the Global Elite Using U.S. Trusts?

Wealthy international families are choosing U.S. situs trusts over the typical offshore trust jurisdictions. In choosing a trust jurisdiction, the extremely wealthy seek the best security, most privacy, best income, lowest taxes, and lowest costs. While the extremely wealthy often utilize these trust structures, they are in no way limited to the extremely wealthy and are often used by high-net-worth individuals (i.e., more than a million in assets). For many, it is also important to diversify their asset holdings outside their country of residence. Powerful trust laws, tax savings, asset protection and privacy, as well as solutions to political and regulatory concerns, all combine to make the U.S. the trust situs of choice. […]

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