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Here Comes FATCA “Phishing”

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September 25, 2014
Here Comes FATCA “Phishing”

It did not take long for sophisticated scam artists to start exploiting FATCA. A few weeks ago we reported the first indictment that we know of whereby several individuals allegedly were selling to overly-entrepreneurial U.S. individuals a runaround FATCA scheme.  Yesterday the IRS came out with a Phishing alert warning FFIs that there are...
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In Topsnik v. Commissioner the Tax Court Rejects Fiscal Avoidance Attempt in the Sale of Shares

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September 24, 2014
In Topsnik v. Commissioner the Tax Court Rejects Fiscal Avoidance Attempt in the Sale of Shares

Here is a case that came out yesterday where the taxpayer tried to have its cake and eat it too. While the case does not address expressly an investment fund or its LPs one can draw parallels to the fund industry. What was the issue? Many treaties have various mechanisms that are in a...
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FATCA, Sure! But Cheaters will be Cheaters

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September 11, 2014
FATCA, Sure! But Cheaters will be Cheaters

I have expressed my views about FATCA before. My belief is that while it is a well-intentioned law standing on a higher moral ground, its added complexity and international fallout overshadow its utility. In other words, I personally think that its benefits outweigh the burdens. There was a very thoughtful letter not long ago...
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ILM 201436049: An Unknown Hedge Fund Gets a Self-Employment Tax Slap from the IRS

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September 8, 2014
ILM 201436049: An Unknown Hedge Fund Gets a Self-Employment Tax Slap from the IRS

Apparently some investment funds continue to take the position that their 2% service fee income is exempt from the self-employment tax (“SET”) under the “limited partner” exception of Sec. 1402(a)(13). These positions are often based on advice by counsel that there is a material distinction among an LLC, LP and LLP when it comes...
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Net Investment Income Tax and US Territories – Take Two

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August 13, 2014
Net Investment Income Tax and US Territories – Take Two

Not long ago I pointed out here that apparently there is significant confusion regarding the applicability of the NIIT to residents of the U.S. Virgin Islands and Puerto Rico. There I discussed that there is conflicting information coming from BIR and Treasury and that LPs ought to talk to their CPAs right away. Apparently,...
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