IRS COMMITTEE SEEKS ADVISORSWashington, D.C. — The Internal Revenue Service is looking for new members to apply for its Information Reporting Program Advisory Committee, including tax preparers. The committee offers recommendations on information reporting and administration issues to the IRS.
Members are drawn from the tax professional community, the taxpaying public, small and large businesses, colleges and universities, state tax administrations, banks, insurance companies, foreign financial institutions and payroll processors.
The committee includes up to 35 members who serve staggered three-year terms. Nominations are currently being accepted for up to six appointments that begin in January 2009.
The deadline for applying is May 30. More information is available on the Tax Professional’s Page on the IRS Web site.
IRS ISSUES FINAL RULES FOR TERRITORY BUSINESS INCOME
Washington, D.C. — The Internal Revenue Service has issued final regulations for determining whether income is derived from sources within a U.S. possession or territory, and whether it is effectively connected with the conduct of a trade or business within a territory.
The U.S. tax consequences of classifying income as being from sources within a territory or as being effectively connected income vary from territory to territory. Sec. 937(b)(1) of the Tax Code expressly grants the Treasury and the IRS the regulatory authority to provide exceptions to the general territory source rule, which otherwise applies sourcing principles similar to those of the U.S. source rules.
Congress intended for the Treasury Department and the IRS to use this authority to provide exceptions to the general rules regarding territory source income and territory effectively connected income as appropriate. Congress anticipated that the regulatory authority would be used to continue the existing treatment of income from the sale of goods manufactured in a territory, and to prevent abuse.
The regulations went into effect April 9.
COALITION PROTESTS EXPAT TAX
Washington, D.C. — The Asia-Pacific Council of American Chambers of Commerce is teaming up with several American Chambers of Commerce in Asia to launch the Alliance for a Competitive Tax Policy, which “seeks to eliminate the biggest tax increase on Americans working overseas in 30 years.”
The ACTP has some bipartisan help from Congress. The group is launching with the assistance of Rep. Gregory Meeks, D-N.Y., and Sen. Jim DeMint, R-S.C. They have co-sponsored legislation, the Working American Competitiveness Act (HR 4752 and S 3496), to get rid of the taxation of foreign-earned income.
U.S. tax laws have traditionally provided a limited exclusion of the tax on foreign-earned income for nearly three decades. However, when the Tax Increase Prevention and Reconciliation Act won passage in 2006, the limited exclusion narrowed further.
The ACTP and the supporters of the proposed legislation argue that the 2006 law creates an economic disadvantage for U.S. corporations that want to assign personnel overseas, causes additional barriers to entry for smaller companies that want to expand abroad, and makes it more attractive for U.S. companies to hire foreign workers.
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