May 30, 2017
On October 13, 2016, the U.S. Treasury Department and the IRS issued final and temporary regulations under Internal Revenue Code Section 385. These regulations offer some relief to the provisions of the proposed regulations which were issued on April 4, 2016. For details of the proposed regulations, see Collins Barrow - U.S. Tax Alert, U.S. Proposes New Rules for Related-Party Debt.
May 30, 2017
by
Lily Lo
Is it possible that a foreign corporation that has no physical presence in a state could be required to pay state income taxes resulting from business/sales within that state? The answer is yes. This surprises many foreign corporations, who find that additional state income taxes may result by them simply making sales in a particular state.
May 25, 2017
by
Matthew Wilson
Canadians with business or personal interests in the United States and American citizens living in Canada may want to take a renewed look at the fast-changing tax environment south of the border. Tax reform was one of the key planks in Donald Trump’s election platform, although it’s unclear how many of these ideas he’ll be able to implement. It would be prudent to consider some possible implications for your business, your family and yourself.
Of course, any steps you take depend on your personal circumstances and they should be taken only after consultation with a qualified business professional. But in broad strokes, here are some ideas to consider.
May 11, 2017
by
Stephen Rupnarain
This information is current to May 11, 2017. Please refer here for an updated version of this Tax Flash.
As proposed in the March 22, 2017 budget, every professional must include year-end work-in-progress (WIP) into taxable income effective for taxation years beginning after March 21, 2017. WIP for professionals typically represents unbilled professional time and cost incurred in the rendering of services to clients. This is often captured in the form of a professional’s “charge-out” rate, which represents their cost, overhead and some profit component.
March 9, 2017
by
Mariya Honcharova
In April 2016, the Minister of National Revenue established the Offshore Compliance Advisory Committee (“OCAC”) for the purpose of advising the Minister and the Canada Revenue Agency (“CRA”) on administrative strategies to deal with offshore compliance. In the fall of 2016, OCAC issued a report on CRA’s Voluntary Disclosure Program, which was endorsed by the Minister of National Revenue on December 8, 2016. On February 22, 2017, the CRA released its formal response, in which it indicated that the review of the recommendations prepared by OCAC will be completed by March 31, 2017.
March 6, 2017
by
Kevin Tippett
*Updated March 10, 2017
With increasing frequency, Canadian corporations are venturing across the border into the United States to perform services or sell their products. Consequently, we often field questions about the U.S. corporate income tax filing requirements for Canadian corporations generating revenue from our trading partner to the south. This article summarizes some of those requirements.
March 6, 2017
by
Jason Melo
It is not uncommon for recently graduated medical professionals to take up employment in the United States immediately upon completion of their education and practical experience requirements. Those who maintained Canadian residence for tax purposes during the pursuit of their education have likely accumulated a significant tuition credit, given the time and financial commitment involved. The corresponding Canadian tuition/education tax credit is largely calculated by multiplying total tuition fees paid by the lowest federal (15%) and provincial marginal tax rates (5.05% in Ontario). The result of this calculation is used to reduce annual personal income taxes on a dollar-for-dollar basis.
February 8, 2017
by
Mike Hayward, Todd King
In recent months, there have been rumblings that the streamlined program — a “friendly” system that helps U.S. taxpayers living abroad get caught up on their filing obligations — is coming to an end. If you are an American citizen or Green Card holder who hasn’t been filing American taxes, now is the ideal time to get caught up, as you may be running out of time to avoid harsh penalties.
November 29, 2016
Topics include:
- Federal and Provincial Highlights;
- Entrepreneurs;
- Personal and U.S. tax matters;
- International matters;
- Key tax dates
*Updated on January 4, 2017
November 22, 2016
U.S. Tax experts are closer than you think.
November 14, 2016
by
Darlene Shaw
Canada Revenue Agency (CRA) has unexpectedly concluded that U.S. limited liability partnerships (LLPs) and limited liability limited partnerships (LLLPs) share more of a likeness with Canadian corporations than they do with Canadian partnerships. Thus, the tax implications for these entities have shifted and financial strategies for Canadian investors with a stake in such partnerships must change.
November 8, 2016
by
Crystal Wu,
Maggie Mei
In an effort to minimize taxpayers’ timing difficulties with filing dates for several common types of returns and reporting forms, the United States Congress has passed legislation modifying the original and extended due dates for tax years beginning after December 31, 2015 (i.e. 2016 returns filed during the 2017 filing season). Click here to view a table that summarizes the old due dates under prior law and the new due dates for some of the most common returns for taxpayers with a calendar tax year-end and C corporations with a fiscal tax year-end.
November 8, 2016
by
Shelley Smith
U.S. Individual Taxpayer Identification Numbers (ITINs) are required by the IRS if you have U.S. tax reporting obligations and you are not eligible for a U.S. Social Security Number (SSN). This requirement normally applies to Canadians who have some source of U.S. income that must be reported to the IRS. Unfortunately, these ITIN numbers are not permanent and will expire as early as January 1, 2017. In fact, individuals having ITINs with 78 or 79 as the fourth and fifth digits (e.g. 9XX-78-XXXX or 9XX-79-XXXX) can expect to receive notice from the IRS this fall advising that their ITIN will expire on January 1, 2017. (To distinguish ITINs from SSNs, note that ITINs begin with the number 9.)
October 4, 2016
by
Darlene Shaw
The Canada Revenue Agency’s (CRA) recent change to its position on the classification of two popular entities for U.S. real estate investing has thrown a wrench into tax structure planning for Canadian investors.
July 27, 2016
by
Denver Nicklas
With an increasingly global farm commodity market and a lower Canadian dollar, Canadian farmers are finding it much easier to sell their products in the United States. However, it is important that producers are aware of potential U.S. tax issues and filing requirements, particularly if this is common practice on their farm operation.
June 10, 2016
by
Todd King
The past several years have been a wild ride for many U.S. taxpayers (and tax practitioners), in particular for those residing outside of the country. While there are a surprising number of U.S. persons still grappling with becoming compliant, in general, the progression to considering expatriation has been somewhat predictable, as follows.
June 10, 2016
On April 4, 2016, the U.S. Treasury Department and the IRS issued proposed regulations which govern whether certain related-party debt instruments will be classified as either debt or equity for U.S. federal income tax purposes. These rules are designed to prevent the excessive shifting of profits between related entities by way of interest charges on related-party debt instruments.
February 16, 2016
by
Laura Gibbs
With the decline in the real estate market in the United States following the 2008 financial crisis, many Canadian residents have taken advantage of investing in U.S. real estate for income generation and/or personal vacation homes. This was especially advantageous for Canadians between 2010 and 2013, when the Canadian dollar was close in value to the U.S. dollar.
February 16, 2016
by
Matthew Wilson, Crystal Wu,
Flora Li
Companies have long used corporate inversions to reduce their U.S. taxes. Prior to 2004, the IRS was concerned that U.S. corporations that carried out inversion transactions could remove non-U.S. operations from the U.S. tax system and strip earnings by becoming subsidiaries of foreign companies (typically organized in low-tax jurisdictions). In 2004, the IRS implemented legislation, known as the “anti-inversion rules,” to prevent these perceived abuses. With more regulations having come into effect on November 19, 2015, there are new areas to be mindful of when planning for corporate restructuring.
January 15, 2016
by
Kevin Tippett
Canadians filing U.S. tax returns for the first time may be targets for scammers due to their inexperience with the IRS. Here’s what you need to know to protect yourself.