Tax Update

Tax Update

In this section of Jnet, we provide brief updates on legislative, judicial, and administrative developments in tax that may impact Japanese companies operating in the United States.

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July 2016

Tennessee: Proposed rule would adopt economic nexus standard for sales and use tax

Tennessee appears to be the next state seeking to jump-start litigation over the physical presence nexus standard articulated in the 1992 Quillcase. Similar to a regulation adopted earlier this year in Alabama, the Tennessee Department of Revenue has proposed a rule adopting an economic nexus standard for sales and use tax purposes. If the rule is promulgated as proposed, out-of-state dealers that engage in the regular or systematic solicitation of consumers in Tennessee through any means and make sales exceeding $500,000 to Tennessee consumers during the calendar year would be considered to have substantial nexus with the state. These dealers would be required to register with the state by January 1, 2017 and would have to begin to collect and remit sales tax by July 1, 2017. A hearing on the proposed rule will be held on August 8, 2016, and comments may be submitted to the Department at any time prior to the hearing. Please stay tuned to TWIST for future updates on the proposed rule.

IRS practice unit: Corporate inversions

The IRS Large Business and International (LB&I) division publicly released a "practice unit"—part of a series of IRS examiner "job aides" and training materials intended to describe for IRS agents leading practices for specific international and transfer pricing issues and transactions. The newly released practice unit concerns corporate inversions.

As the practice unit explains, corporate inversions may be accomplished in a variety of ways. For example, an inversion may occur in a simple exchange of domestic target stock for new foreign parent acquiring stock, a merger of a domestic corporation into a foreign parent, or a transaction involving both domestic and foreign target stock being acquired by a new foreign parent. Section 7874 was enacted to address corporate inversions, and contains provisions aimed at reducing the incentives for entering into inversions by U.S. multinational companies moving out of U.S. taxing jurisdiction. The practice unit notes that many inversions may not be captured by section 7874 if structured in a manner that limits the ownership of new foreign parent by former shareholders of the domestic target.

The practice unit (release date of July 5, 2016) is available on the IRS practice unit* webpage.

June 2016

Final regulations: Country-by-country reporting

The Treasury Department and IRS today released for publication in the Federal Register final regulations (T.D. 9773)—Reg. section 1.6038-4—requiring annual country-by-country (CbC) reporting by certain U.S. persons that are the ultimate parent entity of a multinational enterprise group that has annual revenue for the preceding annual accounting period of $850 million or more.

The final regulations are effective 30 June 2016 (the date of publication of the regulations in the Federal Register). Today’s release finalizes regulations that were proposed in proposed form in December 2015. The final regulations were issued following a public hearing and receipt of comments. After consideration of the comments, the proposed regulations are adopted as amended by today’s Treasury decision.

Final regulations

The preamble to the final regulations examines comments received in response to the proposed regulations and explains why certain comments were—or were not—adopted. For instance, comments that CbC reporting would result in high compliance costs for multinational enterprises (MNEs) and would result in the disclosure of sensitive information were rejected. Today's final regulations amend the proposed regulations to reflect the official number of the required form—Form 8975, Country-by- Country Report.

Entities

With regards to entities required to file CbC reports, the final regulations do not modify the definition of constituent entity in the proposed regulations, making it clear that reporting is not required for foreign corporations or foreign partnership for which the ultimate parent entity is not required furnish information under section 6038(a).

The final regulations do, however, modify the reference to a permanent establishment in the definition of business entity for greater clarity and consistency with the intended meaning of the BEPS final report. Accordingly, the final regulations provide that the term permanent establishment includes:

  • A branch or business establishment of a constituent entity in a tax jurisdiction that is treated as a permanent establishment under an income tax convention to which that tax jurisdiction is a party
  • A branch or business establishment of a constituent entity that is liable to tax in the tax jurisdiction in which it is located pursuant to the domestic law of such tax jurisdiction
  • A branch or business establishment of a constituent entity that is treated in the same manner for tax purposes as an entity separate from its owner by the owner’s tax jurisdiction of residence.

The final regulations also exclude from the definition of "business entity," decedents’ estates, individuals’ bankruptcy estates, and grantor trusts within the meaning of section 671, when all the owners are individuals.
In response to a comment, the final regulations expressly provide that foreign insurance companies that elect to be treated as domestic corporations under section 953(d) are U.S. business entities that have their tax jurisdiction of residence in the United States.

Effective date, filing requirements

As noted in the preamble, other countries have adopted CbC reporting requirements for annual accounting periods beginning on or after January 1, 2016, that would require reporting of CbC information by constituent entities of MNE groups with an ultimate parent entity resident in a tax jurisdiction that does not have a CbC reporting requirement for the same annual accounting period. While the final regulations are not applicable for tax years of ultimate parent entities beginning before June 30, 2016 (i.e., the date of publication of the final regulations in the Federal Register), the IRS and Treasury intend to allow ultimate parent entities of U.S. MNE groups and U.S. business entities designated by a U.S. territory ultimate parent entity to file CbC reports for reporting periods that begin on or after January 1, 2016, but before the applicability date of the final regulations, under a procedure to be provided in separate, forthcoming guidance. In general, Form 8975 must be filed with the ultimate parent entity’s income tax return for the tax year in or with which the reporting period ends. Furthermore, the preamble indicates that penalty rules under section 6038 apply to Form 8975, including reasonable cause relief for failure to file.

KPMG observation

In a related development today, the OECD announced the release of guidance on the implementation of CbC reporting. The OECD guidance sets out: (1) transitional filing options for MNEs that voluntarily file in the "parent jurisdiction;" (2) guidance on the application of CbC reporting to investment funds; (3) guidance on the application of CbC reporting to partnerships; and (4) the impact of exchange rate fluctuations on the €750 million filing threshold for MNE groups.

Michigan: Pass-through entity withholding eliminated for tax years beginning after July 1, 2016

Beginning next year, pass-through entities will no longer be required to withhold Michigan income taxes. House Bill 5131, which was signed into law on June 8, 2016, eliminates the requirement for pass-through entities (such as S corporations, partnerships, limited partnerships, limited liability partnerships, and limited liability companies) to withhold taxes effective for tax years that begin on or after July 1, 2016.

Most partnerships will be subject to withholding for the entire 2016 tax year. Specifically, for tax years that began before July 1, 2016, pass-through entities generally must continue to withhold tax at the rate of 4.25 percent for each nonresident individual partner and 6.0 percent for each partner that is a corporation or pass-through entity.

Scholarships for nonresident aliens; transfers of property to foreign corporation

The IRS Large Business and International (LB&I) division today publicly released two practice units—as part of a series of IRS examiner “job aides” and training materials intended to describe for IRS agents leading practices for specific international and transfer pricing issues and transactions. The two practice units released today concern the tax treatment of scholarships and fellowship grants paid to nonresident aliens and situations when a Form 926 is not filed on the transfer of property to a foreign corporation.

The topics of the practice units released today are:

  • Taxation of scholarships and fellowship grants paid to a nonresident alien
  • Failure to file the Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation—monetary penalty

The practice units (release date of June 14, 2016) are available on the IRS practice unit* webpage.

Canada: CRA to treat certain U.S. LLPs as corporations

Officials from the Canada Revenue Agency (CRA)—speaking at an annual conference of the Canadian branch of the International Fiscal Association (IFA) in late May 2016—commented on the proper classification of limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs) governed by the laws of Florida and Delaware and said that these entities are to be treated as corporations for Canadian tax purposes.

The CRA has indicated that written responses to the questions posed at the conference would be available soon.

Background

At last year's conference, the CRA confirmed that it still follows a "two-step approach" to entity classification, and reported it was in the process of considering the proper classification of limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs) governed by the laws of Florida, but that it had not yet concluded its analysis. At a November 2015 conference of the Canadian Tax Foundation, the CRA said that it had still not concluded its analysis in this regard, but that it was leaning toward treating them as corporations. It also stated that its analysis had been broadened to include LLPs and LLLPs governed by the laws of Delaware.

Florida, Delaware entities

Speaking at the May 2016 conference, the CRA officials said that only three submissions had been received on this topic, a low level of response to the request for input. The two main factors that the CRA looked at—in arriving at the position on the classification of these entities under both Delaware and Florida partnership law—were the entities' legal personality and the fact that the entities provide limited liability protection to members, much like corporations. Accordingly, as the CRA officials stated, LLPs and LLLPs formed under Delaware and Florida partnership law are to be treated as corporations for Canadian tax purposes. The CRA essentially equates these entities to LLCs.

However, the CRA officials acknowledged that this treatment could create problems for groups that include these entities, and agreed to provide some administrative concessions. If the following conditions are met, absent any tax avoidance, these entities could be converted into some other form of partnership without triggering any adverse Canadian tax implications:

  • The entity must have been formed, and must carry on business, prior to July 2016.
  • The members must have formed the entity in order to carry on business in common, with a view to profit (the statutory definition of a partnership).
  • The members must have intended the entity to be treated as a partnership, from the time of its formation, for Canadian tax purposes.
  • Neither the entity nor any of its members have taken the position that the entity is not a partnership.
  • The entity must be converted into some other form of partnership recognized by the CRA as a partnership prior to 2018.

The CRA officials also stated that this relief would not apply to an LLC or a U.S. C corporation that is converted to an LLP or an LLLP prior to July 2016. In this situation, there would not be a significant change to the treatment of the entity from a Canadian perspective (it would go from being treated as a corporation to being treated as a corporation); and therefore, no relief would be granted.

IRS practice units on FDAP payments

The IRS Large Business and International (LB&I) division today publicly released two practice units—as part of a series of IRS examiner "job aides" and training materials intended to describe for IRS agents leading practices for specific international and transfer pricing issues and transactions. The two practice units today concern the treatment of "fixed or determinable annual or periodical" (FDAP) payments.

Specifically, the topics of the practice units are:

  • FDAP payments – source of income
  • FDAP withholding under chapter 3

The practice units (release date of June 2, 2016) are available on the IRS practice unit* webpage.

May 2016

Rev. Proc. 2016-30: "Pre-filing agreement" update, increased user fee

The IRS today released an advance version of Rev. Proc. 2016-30 that updates the rules and procedures for taxpayers seeking an IRS examination and resolution of certain specific issues relating to tax returns before the returns are actually filed. If the IRS and the taxpayer reach an agreement on the issues, a "pre-filing agreement" (PFA) may be executed.

Rev. Proc. 2016-30 modifies the rules and process for PFAs that are available to taxpayers under the jurisdiction of the IRS Large Business and International (LB&I) division.

Increased user fee

The user fee under the PFA program is set to increase from $50,000 to:

  • $134,300 for requests submitted on or after June 3, 2016
  • $218,600 for requests submitted on or after January 1, 2017

A fee is assessed for each separate and distinct issue examined under Rev. Proc. 2016-30.

Background

Rev. Proc. 2009-14 made the then-existing pre-filing agreement (PFA) program permanent, and outlined the procedures for eligible taxpayers to request that the IRS examine specific issues relating to tax returns before those returns are filed. Under the PFA program established by Rev. Proc. 2009-14, if an agreement resolving the examined issues was reached before the returns were filed, the agreement was memorialized by executing a pre-filing agreement that was valid for the current tax year and up to four subsequent tax years.

Unlike letter rulings and other forms of written advice provided by the IRS Offices of the Associates Chief Counsel, a PFA does not determine the tax treatment of prospective or future transactions or events, but only of completed transactions or events whose tax treatment has not yet been reported on a return.

Rev. Proc. 2009-14 established the procedures: (1) for requesting consideration of issues under the PFA program, (2) how taxpayer issues would be selected under the PFA program; and (3) how the requests would be administered. It also described the effects of an agreement under the PFA program as well as the user fee information.

Rev. Proc. 2016-30

Today’s revenue procedure:

  • Clarifies and updates the procedures for filing a PFA request
  • Expands the scope of a PFA to include issues related to changes in methods of accounting requested under the automatic change procedures
  • Increases the user fee for requests submitted on or after June 3, 2016

Like the 2009 revenue procedure, Rev. Proc. 2016-30 explains that the PFA system is available to taxpayers under LB&I jurisdiction, applies to the current tax year or any prior tax year for which the original tax return is not yet due and is not yet filed, and limits PFAs for future tax years to four tax years beyond the current tax year.

Rev. Proc. 2016-30 lists issues that generally are eligible for consideration under the PFA program, and also lists issues that are not eligible for PFA treatment (excluded domestic and international issues include transfer pricing issues and issues involving the accounting period, among others).

The revenue procedure sets out what is required information for a PFA request—including the specific description(s) of the issue(s)—and the instructions for where and how to submit the request. There is guidance provided as to how the IRS would select a taxpayer for the PFA program and the criteria for selection, the manner in which a PFA would be processed, and the nature and effect of a PFA, including its form and content.

At any time before a PFA is executed, either the taxpayer or the IRS may withdraw (all or parts) of the request for a PFA. If no agreement is reached, no PFA is executed, but the taxpayer and the IRS may seek to apply post-filing procedures such as the "accelerated issue resolution" (AIR) procedures to reach an agreement.

KPMG observation

Tax professionals have found the PFA program to be successful—from the perspective of both taxpayers and the IRS—in that the PFA program improves the quality of tax compliance while at the same time reduces costs and other burdens related to tax administration. The increased user fees, however, could be viewed as another hurdle for taxpayers proactively seeking to improve compliance and obtain certainty regarding eligible issues. For those taxpayers contemplating using the PFA program to resolve a current issue, consider submitting a PFA request prior to June 3, 2016, given the user fee increase set to go into effect at that date.

Proposed regulations: Reporting obligations of foreign-owned disregarded entity

The Treasury Department and IRS today released for publication in the Federal Register proposed regulations (REG-127199-15) that would treat a domestic disregarded entity that is wholly owned by a foreign person as a domestic corporation for the limited purposes of the reporting and recordkeeping requirements under section 6038A.

The proposed regulations provide that these domestic disregarded entities—that would be deemed to be foreign-owned domestic corporations—would be required:

  • To file Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engage in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code), and identify an expanded number of “reportable transactions” between the entity and its foreign owner or other foreign related parties
  • To maintain records establishing the accuracy of the information return and the correct U.S. tax treatment of the transactions
  • To obtain an employer identification number (EIN) by filing Form SS-4, and thus would be required to report responsible party information to the U.S. government

The Treasury Department, in a related release, included the following statement about the proposed regulations:
there is a narrow class of foreign-owned U.S. entities—typically single member LLCs—that have no obligation to report information to the IRS or to get a tax identification number. These "disregarded entities” can be used to shield the foreign owners of non-U.S. assets or non-U.S. bank accounts. Once these regulations are finalized, they will allow the IRS to determine whether there is any tax liability, and if so, how much, and to share information with other tax authorities. This will strengthen the IRS’s ability to prevent the use of these entities for tax avoidance purposes, and will build on the success of other efforts to curb the use of foreign entities and accounts to evade U.S. tax.

New reporting requirements

As stated in the preamble, the proposed regulations are intended to provide the IRS with improved access to information needed to satisfy obligations under income tax treaties, information exchange agreements, and other international agreements—and to strengthen the enforcement of U.S. tax laws. The proposed regulations would amend the definition of business entities in Reg. section 301.7701-2, and would amend Reg. section 1.6038A-1 and -2.

The proposed regulations also would add a requirement to report related-party transactions under the transfer pricing provisions of the regulations under section 482, if not already covered by another reportable category, and would require reporting of transactions that otherwise would be disregarded for U.S. tax purposes—such as transactions between a disregarded entity and its owner. Thus, today’s proposed regulations expand the term “reportable transaction” to also include contributions and distributions between the entity and its foreign owner (or another disregarded entity of the same owner).

Existing exceptions to the section 6038A reporting requirements for small corporations and de minimis transactions would not apply to disregarded domestic entities that are deemed to be domestic corporations under the proposed amendments to Reg. section 301.7701-2.

The preamble indicates that the proposed regulations would impose a filing obligation on a foreign-owned disregarded domestic entity for reportable transactions it engages in even if its foreign owner already has an obligation to report the income resulting from those transactions—for example, transactions resulting in income effectively connected with the conduct of a U.S. trade or business.

The preamble to the proposed regulations also announced that the IRS is considering modifications to corporate, partnership, and other tax or information returns (or their instructions) to require the filer of these returns to identify all the foreign and domestic disregarded entities it owns.

Comments requested

The IRS and Treasury specifically have requested comments concerning a filing obligation imposed on a foreign-owned disregarded entity for reportable transactions when the foreign owner has already an obligation to report the income from those transactions—for example, transactions resulting in income that is effectively connected with the conduct of a U.S. trade or business. Comments and requests for a public hearing must be received by a date that is 90 days after Tuesday, May 10, 2016 (the scheduled date of publication of the proposed regulations in the Federal Register.

Proposed effective date

These regulations are proposed to be effective for tax years ending on or after the date that is 12 months after the date when these regulations are published as final regulations in the Federal Register.

KPMG observation

The proposed regulations do not appear to specifically address issues such as the name, address, tax year, and accounting methods to be used by the disregarded domestic entity that would be deemed to be a domestic corporation for purposes of section 6038A, and do not address procedural filing related issues such as a requirement to file a Form 1120, and the identity of the person against which actions would be taken for failures to file and related failures.

The proposed regulations apparently would not deem a U.S. branch of a foreign corporation to be a foreign owned U.S. corporation if that U.S. branch is not organized as an entity for purposes of Reg. section 301.7701-2.

IRS practice unit, taxpayer's affirmative use of section 482

The IRS Large Business and International (LB&I) division today publicly released a practice unit—"Taxpayer's affirmative use of IRC section 482"—that is part of a series of IRS examiner "job aides" and training materials intended to describe for IRS agents leading practices for specific international and transfer pricing issues and transactions.

Text of the practice unit (release date of 12 May 2016) is available on the IRS practice unit* webpage.

This practice unit explains that section 482 allows the IRS to make allocations so that taxpayers clearly reflect income attributable to controlled transactions and to prevent the evasion of taxes. In general, section 482 can only be used by the IRS, but taxpayers are allowed to invoke section 482 under certain situations:

  • On a timely filed U.S. income tax return, the taxpayer is reporting the results of a transaction that are different than the actual prices charged, but is doing so to clearly reflect an arm's length result.
  • In appropriate circumstances, the IRS may permit amended returns that increase taxable income if the results are otherwise arm's length.
  • A taxpayer can request a setoff when the IRS proposes a section 482 allocation. The setoff transactions must be between the taxpayer and the same controlled party involved in the proposed section 482 adjustment, be in the same tax year, and follow certain procedural requirements.

The practice unit explains that taxpayers are not allowed to file an untimely or amended return that decreases U.S. taxable income based on allocations with respect to controlled transactions.

Connecticut: Budget implementer bill includes market-based sourcing for corporation business and individual income tax

Under legislation enacted last year, effective for tax years beginning on or after January 1, 2016, most Connecticut corporate taxpayers are required to apportion their income to Connecticut using single-sales factor apportionment. Senate Bill 502, the budget implementer bill, which has been agreed to by the House and Senate, adopts market-based sourcing provisions. Under current law, the Connecticut sales factor numerator includes "receipts from services performed within the state, rental and royalties from properties situated within the state, royalties from the use of patents or copyrights within the state, interest managed or controlled within the state, net gains from the sale or other disposition of intangible assets managed or controlled within the state, net gains from the sale or other disposition of tangible assets situated within the state, and all other receipts earned within the state."

Under the new market-based sourcing rules, gross receipts from services will be assigned to Connecticut if and to the extent the market for the service is in the state. Other new rules address different categories of receipts. Specifically, gross receipts from the rental, lease or license of real or tangible personal property will be assigned to Connecticut to the extent the property is situated within the state. Gross receipts from the rental, lease or license of intangible property will be assigned to Connecticut if and to the extent the property is used in the state. Intangible property utilized in marketing a good or service to a consumer will be considered used in Connecticut if the good or service is purchased by a consumer in this state. Gross receipts from interest managed or controlled within Connecticut will continue to be assigned to the sales factor numerator, as under existing law. All gross receipts not specifically addressed will be attributed to Connecticut to the extent the taxpayer’s market for the sale is in the state.

There is a complete exclusion from the sales factor for gross receipts from the sale or other disposition of real property, tangible personal property, or intangible property if such property is not held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business.

A taxpayer that cannot reasonably assign its receipts under the revised law may petition the Commissioner for approval to use a methodology that reasonably approximates the assignment of such receipts. Any such petition must be submitted no later than sixty days prior to the original (i.e., non-extended) due date of the return for the first income year to which the petition applies. The Commissioner must grant or deny the petition before the due date of the return.

In addition to adopting market-based sourcing provisions for Corporation Business Tax purposes, Senate Bill 502 adopts similar market-based sourcing rules and single-sales factor apportionment for individual income tax purposes. These provisions are effective for tax years beginning on or after January 1, 2017.

Puerto Rico: VAT regime repeal is upheld by veto-override

The legislature of Puerto Rico has voted to override the governor's veto of a bill to repeal the value added tax (VAT) regime that was scheduled to be effective beginning June 2016. Thus, the commonwealth's existing sales and use tax system (known as "IVU") will continue to apply.

The governor on Friday, May 20, vetoed a bill to repeal the VAT system. The Puerto Rico Senate today, following a vote by the House of Representatives of Puerto Rico earlier this week, voted to override the governor's veto—votes in both houses that reached the required two-thirds majority to override the veto.

Background

Puerto Rico Act No. 72 (May 29, 2015) replaced the commonwealth sales and use tax with a new VAT, imposed at a rate of 10.5%. Originally, the VAT regime was to be effective in April 2015, but the VAT law included a measure providing that the Puerto Rico Treasury Secretary could postpone application of the VAT provisions for a specific period of time. The effective date of the VAT system was initially postponed until April 1, 2016, and then again until June 1, 2016.

With this week's action by the legislature, the VAT regime has been repealed, and the Puerto Rico sales and use tax system will continue to apply.

KPMG observation

It is expected that the Puerto Rico Treasury Department will issue guidance to clarify the effect of this week's veto-override and the continuation of the sales and use tax system.

Arkansas: Manufacturing exemption did not apply to purchases of water treatment equipment

The Arkansas Supreme Court recently addressed whether equipment used to expand a water-treatment plant was exempt from sales and use tax. The water treatment plant utilized an extensive three-phase process to convert surface water into potable drinking water. During each phase, chemicals were used to purify and clarify the water. The taxpayer claimed that certain purchases of tangible personal property—piping used to carry the chemicals and concrete holding tanks—were exempt from sales and use tax as items used to expand a manufacturing facility. On audit, the Arkansas Department of Finance and Administration assessed use tax on the taxpayer's equipment purchases on the basis that the taxpayer did not qualify for the manufacturing exemption. In the Department's view, the water-treatment plant cleaned, but did not manufacture the water. After a circuit court ruled in favor of the taxpayer on the basis that the "extensive mechanical and chemical treatment process turned a raw material into a finished product," the Department timely appealed the issue to the Arkansas Supreme Court.

Under Arkansas law, equipment and machinery used directly in manufacturing is exempt from sales and use taxes. "Manufacturing" means those operations commonly understood to be manufacturing under the ordinary meaning of the term. In determining whether the water-treatment process constituted manufacturing, the court looked to several prior Arkansas cases. Under these decisions, manufacturing generally involved some kind of change or transformation, and required more than merely putting raw materials into a marketable form. In one case, the court held that combining water, sugar, cola concentrate and other ingredients to make a bottled cola beverage constituted manufacturing for purpose of the Arkansas manufacturing exemption. The court distinguished this case from the taxpayer's water treatment process because in the soda context raw materials were transformed into a new product. The water treatment plant, in contrast, did not manufacture or process a new product. As the court observed, "it was water in the beginning, and it was water in the end." As a result, the court held that the taxpayer was not entitled to claim the manufacturing exemption for equipment used at the water-treatment plant. Two justices dissented. In their view, treating the water was indistinguishable from manufacturing soda because the treatment involved the injection of numerous chemicals into the water and transformed non-consumable water into consumable water.


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* The IRS practice units identify areas of strategic importance to the IRS, provide insight as to how IRS examiners will approach various transactions, and generally provide an understanding of the context in which an IRS examiner will approach a particular issue or transaction.

Thus, taxpayers (and their tax advisers) facing an IRS examination or concerned with issue(s) presented by these practice units will want to review the relevant practice units, so as to have a better understanding of the issues that may arise either prior to or during an examination. For instance, the IRS practice units typically provide information that can help taxpayers:

  • Plan for appropriate documentation during return preparation
  • Effectively approach certain elections or certain transactions
  • Respond appropriately to IRS correspondence

For taxpayers selected for a pending IRS examination, the practice units can provide information that may assist with preparation for the examination. For taxpayers actually under examination, the practice units may provide information that can assist taxpayers respond to IRS requests.


For more information, please contact:

Mie Igarashi | +1 404 222 3212 | mieigarashi@kpmg.com

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser. This article represents the views of the authors only, and do not necessarily represent the views or professional advice of KPMG.

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