Section 965 Payment Acceleration Events: Avoiding Triggers, Curable Events

The 2017 tax act included a mandatory repatriation tax on a taxpayer's allocable share of unrepatriated earnings from certain foreign corporations. Any U.S. taxpayer directly, indirectly or constructively owning 10 percent or more of specified foreign corporations was subject to immediate taxation if the taxpayer did not make a proper election under Section 965. Electing taxpayers were permitted to spread the payment of this tax liability over eight years, interest and penalty-free. Shareholders owning foreign stock through an S corporation could elect to defer the payment indefinitely.

Subsequent transactions and events can accelerate these deferred payments. Missed payments, the sale of a business, and the death of a taxpayer are a few examples of events that can accelerate the balance due. Concurrent with acceleration events, the regulations offer several ways to circumvent immediate taxation. Curable events include liquidations, disposal of substantially all assets, and a corporation becoming a consolidated group member. Planning to avoid or prevent the acceleration of this considerable liability is key.

Listen as our panel of international tax experts explains how to avoid and mitigate unintended consequences of transactions and actions that accelerate Section 965 transition tax payments.

1. Overview
2. Installment elections and acceleration events
3. S corporation shareholder deferral and acceleration events
4. Curable events
5. Situations where acceleration events may occur
6. Best practices

The panel will review these and other critical issues:

• Specific events that will accelerate Section 965 tax payments
• How a taxpayer's death, expatriation or other similar events impact Section 965 payment obligations
• How tax implications of acceleration liability differ by entity type when a business is sold
• The party primarily liable for Section 965 payments when a business is transferred

Learning Objectives

After completing this course you will be able to:

• Identify specific events and transactions that trigger immediate recognition of Section 965 liability
• Determine how the death of a taxpayer or other similar events impacts remaining installment payments or deferred payments
• Determine whether it’s possible to avoid or cure acceleration of Section 965 tax liability when a business is sold
• Identify recognition events for S corporation shareholders, and possible remediation measures

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of international taxation including residency determination, foreign entity classifications, application of treaty benefits, as well as GILTI, Subpart F, and the related Section 250 deductions.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).