The Tax Cuts and Jobs Act completely rewrote Section 965 to force a one-time repatriation of deferred earnings and profits in foreign corporations. It forces income recognition in the 2017 tax year, so there is not a lot of time to figure this one out!
I call this a workshop because the intention is for Rufus to talk a bit about the new law, then we will open it up for questions and input. Some of you out there are smart about Section 965, so please share with us. We can all pool our collective ignorance to become individually brighter. 🙂
Along those lines, it is important to bring in as many resources and perspectives as possible. I learn from reading what others write, and listening to what they say.
Here are some links I have collected from Out There on the Interwebs. I have omitted anything that requires a subscription.
If you know of other good Section 965 discussions, please tell me so I can update this page. Email = phil “at” hodgen.com.
Section 965 Itself
- 26 USC § 965. From the Cornell website.
What the IRS is Saying
- The Generic IRS Tax Reform Web Page. Start here first for anything the IRS is publishing about the Tax Cuts and Jobs Act.
- Questions and Answers about Reporting Related to Section 965 on 2017 Tax Returns. Self-explanatory. FAQ format.
- Notice 2018-7. (PDF). The first guidance from the IRS on Section 965.
- Notice 2018-13. (PDF). “Additional Guidance Under Section 965 and Guidance Under Sections 863 and 6038 in Connection with the Repeal of Section 958(b)(4)”.
- Rev. Proc. 2018-17. (PDF). Guidance on changing your accounting period when faced with Section 965.
Section 965 and California Taxation
- Preliminary Report on Specific Provisions of the Federal Tax Cuts and Jobs Act. (PDF). Published by the Franchise Tax Board, you can find the discussion of Section 965 in pages 16-21.
Analysis by PowerPoint
You learn from slides? Here you go.
- The Tax Cuts and Jobs Act: A Conference with the Government and Private Sector to Discuss the Legislation. (PDF). Slides from a conference cosponsored by Tax Analysts and Bloomberg. The international tax discussions start at page 65 of this 381-page behemoth.
- Understanding the Tax Cuts and Jobs Act. (PDF). This is a large PowerPoint deck from from Venable. The Section 965 discussion is at pages 42-45.
Here are better-than-average overviews, or deep dives on a particular slice of Section 965.
- Tax Cuts and Job Act News. A curated web page from the International Tax Policy Forum with links to articles they like about the new tax law. Good if you have subscriptions to the publications they link to.
- Code §965: Individuals Recognizing the Deemed Repatriation in 2017 vs. 2018. Andrew Mitchel discusses the timing of Section 965 income recognition for human taxpayers.
- Tax Cuts and Jobs Act significantly affects US private companies with outbound investments. Ernst & Young has a summary web page with brief discussions of the new law. Of particular interest is the relatively short section under the heading Application of Transition Tax to US individuals and trusts, their pass-through entities and closely-held C corporations.
- Tax Cuts and Jobs Act: The Toll Charge to Move into the New Quasi-Territorial Regime. This well-written longer piece walks you through how Section 965 works. It is comprehensive but dives a bit deeper when it is needs to.
- News Analysis: How Some Taxpayers Got Cut Out of the Tax Cuts and Jobs Act. From a real journalist. 🙂 Not 100% a Section 965 discussion, but useful to add context. This article discusses how some taxpayers are harmed by the new tax law: individuals owning foreign corporations, foreign pass-through businesses, etc. Includes a brief discussion of Section 965.
- Tax Reform: The International Provisions (Part 1)-Section 965 Deemed Repatriation Tax. Shorter writeup, distinguished by a very nice flow chart that walks you through Section 965 analysis, step-by-step.
- Repatriation of Foreign-Sourced Accumulated Earnings in Transitioning to a Participation Exemption System for Reporting Foreign Sourced Dividens Under the Tax Cuts and Jobs Act of 2017. Another short-ish but comprehensive enough-ish introduction to Section 965.
- Overview of the Major International Tax Provisions Of the Tax Cuts and Jobs Act. (PDF). This is a useful list of the international tax provisions of the Tax Cuts and Jobs Act, courtesy of Gutter Chaves Josepher Rubin Forman Fleisher Miller P.A.. It includes a discussion of Section 965, of course.
- IRS Notice 2018-13: How it Affects Your Toll Tax Model. Translates Govspeak to English and tells you what Notice 2018-13 says.
- Talking Toll Tax: Calculation and Provision Considerations for the New Year. (PDF). An overview of Section 965. Touches on GAAP issues and SEC guidance.
- Repatriation “Toll Tax”. A well-written introductory overview of new Section 965 from Rödl and Partner.
- Tax reform: IRS clarifies repatriation transition tax, other international aspects. Another discussion of Notice 2018-13.
- Impact of the Tax Cuts and Jobs Act on U.S. Investors in Foreign Corporations. (PDF). An overview article from Ruchelman P.L.L.C. Discussion of Section 965 starts on page 6.
- The Toll-Charge Playbook: A Step-by-Step Example. (PDF) From Alvarez & Marsal.