Andrew Mitchel LLC

International Tax Blog - New and Interesting International Tax Issues

International PLRs of the 50th Week of 2011


This past week the IRS published the following Private Letter Rulings and other written determinations relating to international taxation:

In seventeen PLRs (PLR 201150001 thru 201150017), late entity classification elections were granted for foreign entities “due to inadvertence.”

PLR 201150019:  This lengthy PLR (21 pages) includes a Code §351 exchange, multiple Code §332 liquidations, a Code §368(a)(1)(C) reorganization, and a divisive Code §368(a)(1)(D) reorganization with a Code §355 spin-off.

PLR 201150021: Another lengthy PLR (29 pages) that includes a Code §304 transaction, multiple Code §351 exchanges (including preferred equity certificates, or “PECs”), three acquisitive Code §368(a)(1)(D) reorganizations, and one Code §368(a)(1)(A) merger.

CCA 201150029:  In this chief counsel advice the issue was whether the Code §6677 penalty for failure to file information with respect to foreign trusts under Code §6048 (see Forms 3520 and 3520-A) is a “divisible tax” such that a taxpayer would need to pay only a portion of the penalty to sue for a refund.  The CCA concludes that the penalty is not a “divisible tax” and that a taxpayer must pay the full amount of the penalty to challenge the entire penalty assessment under Code §6677 for a particular year.  However, if a taxpayer chooses only to contest a portion of the penalty relating to one or more particular failures to report, but not all failures, the taxpayer may pay that portion and sue for refund. 


Tags: Authority - PLRs / CCAs, Form 3520 / 3520-A