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International PLRs / CCAs of the 8th week of 2012

2012-03-02

Last week the IRS published the following Private Letter Rulings and Chief Counsel Advice relating to international taxation:

PLRs 201208009 and 201208010: I.R.S. allowed an exception to the 60 month limitation on changing an entity’s classification.  The foreign entity was permitted to elect corporate entity classification less than 60 months after its previous change in entity classification to be treated as a disregarded entity because the foreign entity had a change of ownership of more than 50%.

PLR 201208020: Late entity classification election for foreign entity to be treated as an association taxable as a corporation.  The foreign entity “inadvertently failed to timely file Form 8832.”

CCA 201208028: A decedent’s estate was required to pay penalties under Code §6677(a) and (b) for late filings of Forms 3520 and 3520-A, unless there was reasonable cause.  The estate potentially owed the penalties imposed on the decedent for failing to file for several years.  Further, the estate itself should have reported the deemed transfer to the foreign trust under Code §684 upon the decedent's death.  In addition, the foreign trust's payment of the estate's U.S. federal estate taxes was treated as a constructive distribution from the foreign trust to the estate which should have been reported by the estate.

PLR 201208034: A realized gain from an upstream transfer of shares of stock of a foreign corporation in a consolidated group was deferred and was not triggered by a subsequent domestication and reorganizations of the foreign corporation.

Tags: Authority - PLRs / CCAs