Now that summer is over and the kids are back at school, you turn your attention to the 2009 forecast and realize that one of the rules your company has been relying on for the past few years to maintain deferral of U.S. taxation on foreign earnings is about to sunset. It is uncertain whether the Subpart F look-through rule will be extended. What should you do while you wait to learn the fate of this deferral rule? One option is to restructure your company’s deferral strategy through several available tax planning mechanisms. However, if your company, like many other companies, might have trouble taking these measures by the end of the year, this article provides some practical examples of what you could do during the last quarter of 2008 to brace yourself for the temporary or permanent lapse in the Subpart F look-through rule.

Refresher of the Look-Through Rule
As we noted in Issue 23 of the Tax Advisor Weekly, when the Subpart F look-through rule under Internal Revenue Code Section 954(c)(6) was first enacted, it created new and improved opportunities for U.S. multinationals to effectively manage their foreign earnings and to keep their effective tax rate (ETR) stable and their corporate structures simple. Before its enactment in 2006, companies frequently relied on entity classification (check-the-box) planning to achieve deferral, the downside being a more difficult repatriation due to averaging of high-taxed and low-taxed earnings. With the enactment of the look-through rule, deferral was still achievable while repatriation became significantly more manageable and less costly.
In general, the look-through rule provides that income in the form of dividends, interest, rents and royalties received or accrued by one controlled foreign corporation (CFC) from a related CFC is not immediately taxed in the U.S. by its direct or indirect U.S. shareholder as a deemed dividend (that is, as Subpart F income), to the extent attributable or properly allocable to income of the distributing CFC that is neither Subpart F income nor income treated as effectively connected with the conduct of a U.S. trade or business. Thus, if the CFC payor generates active foreign income, the passive income it pays to the related CFC (that would otherwise be taxed in the U.S.) is exempt from immediate taxation under the look-through rule.
The following is an example of how the look-through rule operates:

U.S. Parent is the parent company of a multinational group that has operations in high-tax jurisdictions (where income is taxed at a minimum of 31.5 percent) through HoldCo1 in country A and low-tax jurisdictions (where income is taxed at a rate lower than 31.5 percent) through HoldCo2 in country B. HoldCo1 has two foreign operating companies: OpCo 1 in country C and OpCo2 in country D. HoldCo2 has three foreign operating companies: OpCo3 in country E, OpCo4 in country B and OpCo5 in country G held as a subsidiary of OpCo4.
The five OpCo’s do not receive any passive income and, instead, only receive revenue from active business operations outside the United States. Additionally, HoldCo2 has a dedicated finance subsidiary (FinCo) set up in country F, where it enjoys a favorable regulatory system and a reduced tax rate and loans funds to all five operating companies.
In this example, the group is structured in a tax-efficient way by taking local interest deductions in higher-tax jurisdictions and having inclusions in lower-tax jurisdictions without triggering current U.S. taxation on these earnings. In the high-tax jurisdictions, OpCo1 and OpCo2 distribute dividends to HoldCo1. In the low-tax jurisdictions, OpCo3 and OpCo4 distribute dividends to HoldCo2, while OpCo5 distributes dividends to OpCo4. FinCo receives interest income from all five operating companies.
The dividends received by HoldCo1, HoldCo2 and OpCo4 and the interest income received by FinCo are excluded from Subpart F income and not taxable in the U.S. by U.S. Parent under the look-through rule because the underlying earnings are derived from payors’ active foreign business operations.

Extension Proposition
Enacted in 2006 with the goal of enhancing the global competitiveness of U.S. multinationals by allowing them to redeploy active foreign earnings with no additional tax burden, the provisions contained in the look-through rule have significantly helped the vast majority to indefinitely defer U.S. taxation on their foreign earnings and profits. Its applicability, however, is limited to fiscal years of foreign corporations beginning no later than December 31, 2008.
There is in Congress a bill extending the applicability of this rule for one more year to fiscal years beginning on or before December 31, 2009. This bill has already been voted on by the Senate, but with the House and Senate debating amendments to the bill, with the presidential elections looming and with all the discussions about potential tax increases in sight, there is considerable uncertainty as to whether this look-through rule will be extended. Even if the provisions are extended for one additional year, there could be a temporary lapse if they are not extended by December 31, 2008.

What Will Change Upon Expiration
Upon the expiration of the look-through rule that is being relied upon to achieve deferral, the tax consequences in the above example will be as follows:

  1. The dividends distributed by OpCo1 and OpCo2 to HoldCo1 might not be Subpart F income under a different provision of the tax code known as the “high-tax exception.” It provides that certain types of income subject to an effective foreign income tax rate greater than 90 percent of the maximum U.S. domestic rate to the U.S. are not Subpart F income. Therefore, U.S. Parent might be able to avoid recognizing the HoldCo1’s dividend income in its U.S. taxable income immediately if the high-tax exception is applicable. To prove this exception applies, the company will need to calculate the underlying earnings and profit (E&P) and foreign tax pools of OpCo1, OpCo2 and HoldCo1.
  2. The dividends paid by OpCo4 to HoldCo2 might meet another exception to Subpart F income known as the “same-country exception” because these entities are both organized in country B. Thereby, these dividends received by HoldCo2 might not be immediately included in U.S. Parent’s taxable income as a deemed dividend.
  3. The other dividend and interest payments in the above example may not meet any exceptions from Subpart F income and will likely be included in U.S. Parent’s U.S. taxable income as a deemed dividend. It should be noted that the amount of the deemed dividend is limited to the CFC’s E&P. Further, the U.S. Parent might be allowed a foreign tax credit for a portion of the taxes that the CFCs have paid in the foreign country. To determine the impact, the company will need to calculate the underlying E&P and foreign tax pools of the various entities involved.

Brace for Change
Clearly, the expiration of the look-through rule might increase your Subpart F income and cause immediate taxation of more foreign earnings in the United States. The ideal response would be for you to alter your deferral structure before the end of 2008. However, as previously mentioned, the look-through rule could be extended another year(s). So, if you prefer to take the “wait and see” approach, there are some things you should do now to prepare for the potential loss of the look-through rule.
The following are not new concepts but rather a review of some of the considerations that you might have put aside if you had the benefit of avoiding Subpart F income in the past few years:

  • CFC’s E&P and foreign tax pools: As mentioned in point 3 above, the ultimate tax effect of the deemed dividend to the U.S. company on Subpart F income depends on the CFC’s E&P and foreign tax credit pools. If your company has not focused on these calculations because of the availability of the look-through rule in the past few years, now would be a good time to refine and document these calculations in anticipation of the Subpart F income that might affect the U.S. financial statements and U.S. income tax returns. These calculations could help you determine, for example, if E&P exists, whether the high-tax exception is available, and what amount of credit will become available to offset the U.S. tax.
  • U.S. parent foreign tax credit position: Similarly, the U.S. company must review its U.S. foreign tax credit position to determine if it has the profile needed to benefit currently from the foreign tax credits. It will be difficult to avoid a valuation allowance on any excess foreign tax credits for U.S. financial statement purposes if you are unable to determine whether they will be used to reduce U.S. tax liability.
  • U.S. parent overall foreign loss: Another restriction on the use of foreign tax credits would be if the U.S. company has an overall foreign loss (OFL), or a foreign loss component of a net operating loss. An OFL occurs when the U.S. company’s foreign-source income (after taking into account certain deductions) results in a net loss. An OFL may offset domestic-source income in the year it is incurred, but at least 50 percent of foreign-source income of future years will be recaptured as domestic-source income, until all the amount of OFL used to offset domestic-source income is recharacterized. As a consequence of this recharacterization, a U.S. company may see its ability to use foreign tax credits reduced until the net foreign-source income is profitable on an accumulated basis. If a U.S. company suspects that it has an OFL but has not quantified it, the calculation must be refined before the U.S. company can benefit from the foreign tax credits that it deemed paid.
  • Global effective tax rate: For those of you managing an effective tax rate, the sunset of the look-through rule could cause a hit to your ETR in 2009. If the impact is expected to be substantial, it is advisable to communicate this to management and the board. In our example above, some of the earnings of OpCo4, HoldCo2 and FinCo (in the low-tax jurisdictions) will likely be immediately taxed in the U.S. at the U.S. effective tax rate. If the deemed dividend in the U.S. is significant to the overall earnings of the affiliated group, the absence of the look-through rule could substantially increase the group’s ETR.
  • APB 23: If your company has asserted its intention to indefinitely reinvest its foreign unremitted earnings overseas for financial statement purposes (Accounting Principles Board Opinion No. 23 — APB 23), you might want to readdress this assertion if the U.S. company starts to generate deemed dividends from Subpart F income. The Subpart F income could be treated as though there were a deemed distribution to the U.S. followed by a reinvestment of the cash to the CFC. Therefore, your current APB 23 assertion might need realignment.
  • Foreign exchange: When a CFC has a deemed dividend to its U.S. parent, the company’s foreign exchange exposure changes because a discrepancy develops between foreign exchange rates as of the date the earnings are deemed distributed to the U.S. under Subpart F and the date the cash is eventually repatriated to the United States. Typically, this exposure is communicated to the company’s internal treasury teams.
  • Cash management: Some slight modifications to your company’s cash flow might help minimize the impact of the Subpart F income. Assume in our example above that HoldCo1 has historically made cash dividend distributions to U.S. Parent. Since HoldCo2 will make deemed dividend distributions to the U.S. Parent after the expiration of the look-through rule, the company might be able to distribute the cash from HoldCo2 rather than HoldCo1 without any additional U.S. tax liability. Thus, it might be beneficial for your company to anticipate where the Subpart F exposure will be and to structure your cash flow around that inclusion to minimize the overall U.S. tax liability.

Alvarez & Marsal Taxand Says:
Do not wait until it has been decided whether the look-through rule has been extended. Instead, start evaluating the situation now. If you can alter your deferral strategy by the end of the year, go for it. In conjunction with that approach, or alternatively, we suggest you look at the tax profile of your U.S. companies and your CFCs to evaluate the impact on your U.S. financial statements and U.S. income tax returns of the look-through rule not being extended. The additional taxable income in the U.S. might require you to adjust estimated income tax payments in 2009, recalculate the company’s effective tax rate, evaluate your APB 23 position and appraise whether valuation allowances are needed on foreign tax credits that flow up to the U.S. shareholder with the deemed dividends.
Once your tax profile is established, you can take some relatively simple actions to minimize the impact of the additional earnings in the U.S., such as altering cash flows to utilize the previously taxed earnings to bring cash back to the U.S.
Finally, there may seem to be quite a bit of time to accomplish the above between now and the end of 2008. But the kids will be home for winter break before you know it.

Disclaimer
As provided in Treasury Department Circular 230, this e-newsletter is not intended or written by Alvarez & Marsal Taxand, LLC, to be used, and cannot be used, by a client or any other person or entity for the purpose of avoiding tax penalties that may be imposed on any taxpayer.
Alvarez & Marsal Taxand, LLC distributes a complimentary electronic newsletter to subscribers on a weekly basis. A&M Tax Advisor Weekly provides comprehensive and timely insight on a wide range of taxation issues including international tax, state and local tax, incentives and current issues. Readers are reminded that they should not consider these documents to be a recommendation to undertake any tax position, nor consider the information contained therein to be complete. Before any item or treatment is reported, or excluded from reporting on tax returns, financial statements, or any other document, for any reason, readers should thoroughly evaluate their specific facts and circumstances, and obtain the advice and assistance of qualified tax advisors. The information reported in these releases may not continue to apply to a reader's situation due to changing laws and associated authoritative literature, and readers are reminded to consult with their tax or other professional advisors before determining if any information contained herein remains applicable to their facts and circumstances.

Author
Julie Smith
Senior Director, Washington D.C.
703-852-5020
Email
Fabio Gadelha, Senior Associate, contributed to this article.

For More Information on this Topic, Contact:
Juan Carlos Ferrucho
Managing Director, Miami
305-704-6670
Email | Profile
Albert Liguori
Managing Director, New York
212-763-1638
Email | Profile
David Zaiken
Managing Director, San Francisco
415-490-2255
Email | Profile

Other Related Issues:

04/15/08

Treasury Refreshes the Application of Subpart F to Contract Manufacturing

12/06/07

Stay the Course — Check-the-Box Regulations Still Valid

06/08/06

The TIPRA Sub F Look-Thru Rule: Satisfy Your Repatriation Hunger

Feedback:
We would like to hear from you.
Click here to provide your feedback.

About Alvarez & Marsal Taxand
Alvarez & Marsal Taxand, an affiliate of Alvarez & Marsal (A&M), a leading global professional services firm, is an independent tax group made up of experienced tax professionals dedicated to providing customized tax advice to clients and investors across a broad range of industries. Its professionals extend A&M’s commitment to offering clients a choice in advisers who are free from audit-based conflicts of interest, and bring an unyielding commitment to delivering responsive client service. A&M Taxand has offices in major metropolitan markets throughout the U.S., and serves the U.K. from its base in London, England.
Alvarez & Marsal Taxand is a founding member of Taxand, the first global network of independent tax advisers that provides multinational companies with the premier alternative to Big Four audit firms. Formed in 2005 by a small group of highly respected tax firms, Taxand has grown to more than 2,000 tax professionals, including 300 international partners based in more than 40 countries.
To learn more, visit www.alvarezandmarsal.com or www.taxand.com.
© Copyright 2008 Alvarez & Marsal Holdings, LLC. All Rights Reserved.

Issue / Subtitle: 
Issue 40
Newsletter Date: 
Tuesday, September 30, 2008
Expiration of the Subpart F Look-Through Rule: Brace Yourself for Potential Change

September 30, 2008

Now that summer is over and the kids are back at school, you turn your attention to the 2009 forecast and realize that one of the rules your company has been relying on for the past few years to maintain deferral of U.S. taxation on foreign earnings is about to sunset. It is uncertain whether the Subpart F look-through rule will be extended. What should you do while you wait to learn the fate of this deferral rule? One option is to restructure your company’s deferral strategy through several available tax planning mechanisms. However, if your company, like many other companies, might have trouble taking these measures by the end of the year, this article provides some practical examples of what you could do during the last quarter of 2008 to brace yourself for the temporary or permanent lapse in the Subpart F look-through rule.

Refresher of the Look-Through Rule

As we noted in Issue 23 of the Tax Advisor Weekly, when the Subpart F look-through rule under Internal Revenue Code Section 954(c)(6) was first enacted, it created new and improved opportunities for U.S. multinationals to effectively manage their foreign earnings and to keep their effective tax rate (ETR) stable and their corporate structures simple. Before its enactment in 2006, companies frequently relied on entity classification (check-the-box) planning to achieve deferral, the downside being a more difficult repatriation due to averaging of high-taxed and low-taxed earnings. With the enactment of the look-through rule, deferral was still achievable while repatriation became significantly more manageable and less costly.

In general, the look-through rule provides that income in the form of dividends, interest, rents and royalties received or accrued by one controlled foreign corporation (CFC) from a related CFC is not immediately taxed in the U.S. by its direct or indirect U.S. shareholder as a deemed dividend (that is, as Subpart F income), to the extent attributable or properly allocable to income of the distributing CFC that is neither Subpart F income nor income treated as effectively connected with the conduct of a U.S. trade or business. Thus, if the CFC payor generates active foreign income, the passive income it pays to the related CFC (that would otherwise be taxed in the U.S.) is exempt from immediate taxation under the look-through rule.

The following is an example of how the look-through rule operates:

U.S. Parent is the parent company of a multinational group that has operations in high-tax jurisdictions (where income is taxed at a minimum of 31.5 percent) through HoldCo1 in country A and low-tax jurisdictions (where income is taxed at a rate lower than 31.5 percent) through HoldCo2 in country B. HoldCo1 has two foreign operating companies: OpCo 1 in country C and OpCo2 in country D. HoldCo2 has three foreign operating companies: OpCo3 in country E, OpCo4 in country B and OpCo5 in country G held as a subsidiary of OpCo4.

The five OpCo’s do not receive any passive income and, instead, only receive revenue from active business operations outside the United States. Additionally, HoldCo2 has a dedicated finance subsidiary (FinCo) set up in country F, where it enjoys a favorable regulatory system and a reduced tax rate and loans funds to all five operating companies.

In this example, the group is structured in a tax-efficient way by taking local interest deductions in higher-tax jurisdictions and having inclusions in lower-tax jurisdictions without triggering current U.S. taxation on these earnings. In the high-tax jurisdictions, OpCo1 and OpCo2 distribute dividends to HoldCo1. In the low-tax jurisdictions, OpCo3 and OpCo4 distribute dividends to HoldCo2, while OpCo5 distributes dividends to OpCo4. FinCo receives interest income from all five operating companies.

The dividends received by HoldCo1, HoldCo2 and OpCo4 and the interest income received by FinCo are excluded from Subpart F income and not taxable in the U.S. by U.S. Parent under the look-through rule because the underlying earnings are derived from payors’ active foreign business operations.

Extension Proposition

Enacted in 2006 with the goal of enhancing the global competitiveness of U.S. multinationals by allowing them to redeploy active foreign earnings with no additional tax burden, the provisions contained in the look-through rule have significantly helped the vast majority to indefinitely defer U.S. taxation on their foreign earnings and profits. Its applicability, however, is limited to fiscal years of foreign corporations beginning no later than December 31, 2008.

There is in Congress a bill extending the applicability of this rule for one more year to fiscal years beginning on or before December 31, 2009. This bill has already been voted on by the Senate, but with the House and Senate debating amendments to the bill, with the presidential elections looming and with all the discussions about potential tax increases in sight, there is considerable uncertainty as to whether this look-through rule will be extended. Even if the provisions are extended for one additional year, there could be a temporary lapse if they are not extended by December 31, 2008.

What Will Change Upon Expiration

Upon the expiration of the look-through rule that is being relied upon to achieve deferral, the tax consequences in the above example will be as follows:

  1. The dividends distributed by OpCo1 and OpCo2 to HoldCo1 might not be Subpart F income under a different provision of the tax code known as the “high-tax exception.” It provides that certain types of income subject to an effective foreign income tax rate greater than 90 percent of the maximum U.S. domestic rate to the U.S. are not Subpart F income. Therefore, U.S. Parent might be able to avoid recognizing the HoldCo1’s dividend income in its U.S. taxable income immediately if the high-tax exception is applicable. To prove this exception applies, the company will need to calculate the underlying earnings and profit (E&P) and foreign tax pools of OpCo1, OpCo2 and HoldCo1.
  2. The dividends paid by OpCo4 to HoldCo2 might meet another exception to Subpart F income known as the “same-country exception” because these entities are both organized in country B. Thereby, these dividends received by HoldCo2 might not be immediately included in U.S. Parent’s taxable income as a deemed dividend.
  3. The other dividend and interest payments in the above example may not meet any exceptions from Subpart F income and will likely be included in U.S. Parent’s U.S. taxable income as a deemed dividend. It should be noted that the amount of the deemed dividend is limited to the CFC’s E&P. Further, the U.S. Parent might be allowed a foreign tax credit for a portion of the taxes that the CFCs have paid in the foreign country. To determine the impact, the company will need to calculate the underlying E&P and foreign tax pools of the various entities involved.

Brace for Change

Clearly, the expiration of the look-through rule might increase your Subpart F income and cause immediate taxation of more foreign earnings in the United States. The ideal response would be for you to alter your deferral structure before the end of 2008. However, as previously mentioned, the look-through rule could be extended another year(s). So, if you prefer to take the “wait and see” approach, there are some things you should do now to prepare for the potential loss of the look-through rule.

The following are not new concepts but rather a review of some of the considerations that you might have put aside if you had the benefit of avoiding Subpart F income in the past few years:

  • CFC’s E&P and foreign tax pools: As mentioned in point 3 above, the ultimate tax effect of the deemed dividend to the U.S. company on Subpart F income depends on the CFC’s E&P and foreign tax credit pools. If your company has not focused on these calculations because of the availability of the look-through rule in the past few years, now would be a good time to refine and document these calculations in anticipation of the Subpart F income that might affect the U.S. financial statements and U.S. income tax returns. These calculations could help you determine, for example, if E&P exists, whether the high-tax exception is available, and what amount of credit will become available to offset the U.S. tax.
  • U.S. parent foreign tax credit position: Similarly, the U.S. company must review its U.S. foreign tax credit position to determine if it has the profile needed to benefit currently from the foreign tax credits. It will be difficult to avoid a valuation allowance on any excess foreign tax credits for U.S. financial statement purposes if you are unable to determine whether they will be used to reduce U.S. tax liability.
  • U.S. parent overall foreign loss: Another restriction on the use of foreign tax credits would be if the U.S. company has an overall foreign loss (OFL), or a foreign loss component of a net operating loss. An OFL occurs when the U.S. company’s foreign-source income (after taking into account certain deductions) results in a net loss. An OFL may offset domestic-source income in the year it is incurred, but at least 50 percent of foreign-source income of future years will be recaptured as domestic-source income, until all the amount of OFL used to offset domestic-source income is recharacterized. As a consequence of this recharacterization, a U.S. company may see its ability to use foreign tax credits reduced until the net foreign-source income is profitable on an accumulated basis. If a U.S. company suspects that it has an OFL but has not quantified it, the calculation must be refined before the U.S. company can benefit from the foreign tax credits that it deemed paid.
  • Global effective tax rate: For those of you managing an effective tax rate, the sunset of the look-through rule could cause a hit to your ETR in 2009. If the impact is expected to be substantial, it is advisable to communicate this to management and the board. In our example above, some of the earnings of OpCo4, HoldCo2 and FinCo (in the low-tax jurisdictions) will likely be immediately taxed in the U.S. at the U.S. effective tax rate. If the deemed dividend in the U.S. is significant to the overall earnings of the affiliated group, the absence of the look-through rule could substantially increase the group’s ETR.
  • APB 23: If your company has asserted its intention to indefinitely reinvest its foreign unremitted earnings overseas for financial statement purposes (Accounting Principles Board Opinion No. 23 — APB 23), you might want to readdress this assertion if the U.S. company starts to generate deemed dividends from Subpart F income. The Subpart F income could be treated as though there were a deemed distribution to the U.S. followed by a reinvestment of the cash to the CFC. Therefore, your current APB 23 assertion might need realignment.
  • Foreign exchange: When a CFC has a deemed dividend to its U.S. parent, the company’s foreign exchange exposure changes because a discrepancy develops between foreign exchange rates as of the date the earnings are deemed distributed to the U.S. under Subpart F and the date the cash is eventually repatriated to the United States. Typically, this exposure is communicated to the company’s internal treasury teams.
  • Cash management: Some slight modifications to your company’s cash flow might help minimize the impact of the Subpart F income. Assume in our example above that HoldCo1 has historically made cash dividend distributions to U.S. Parent. Since HoldCo2 will make deemed dividend distributions to the U.S. Parent after the expiration of the look-through rule, the company might be able to distribute the cash from HoldCo2 rather than HoldCo1 without any additional U.S. tax liability. Thus, it might be beneficial for your company to anticipate where the Subpart F exposure will be and to structure your cash flow around that inclusion to minimize the overall U.S. tax liability.

Alvarez & Marsal Taxand Says:

Do not wait until it has been decided whether the look-through rule has been extended. Instead, start evaluating the situation now. If you can alter your deferral strategy by the end of the year, go for it. In conjunction with that approach, or alternatively, we suggest you look at the tax profile of your U.S. companies and your CFCs to evaluate the impact on your U.S. financial statements and U.S. income tax returns of the look-through rule not being extended. The additional taxable income in the U.S. might require you to adjust estimated income tax payments in 2009, recalculate the company’s effective tax rate, evaluate your APB 23 position and appraise whether valuation allowances are needed on foreign tax credits that flow up to the U.S. shareholder with the deemed dividends.

Once your tax profile is established, you can take some relatively simple actions to minimize the impact of the additional earnings in the U.S., such as altering cash flows to utilize the previously taxed earnings to bring cash back to the U.S.

Finally, there may seem to be quite a bit of time to accomplish the above between now and the end of 2008. But the kids will be home for winter break before you know it.

Disclaimer

As provided in Treasury Department Circular 230, this e-newsletter is not intended or written by Alvarez & Marsal Taxand, LLC, to be used, and cannot be used, by a client or any other person or entity for the purpose of avoiding tax penalties that may be imposed on any taxpayer.

Alvarez & Marsal Taxand, LLC distributes a complimentary electronic newsletter to subscribers on a weekly basis. A&M Tax Advisor Weekly provides comprehensive and timely insight on a wide range of taxation issues including international tax, state and local tax, incentives and current issues. Readers are reminded that they should not consider these documents to be a recommendation to undertake any tax position, nor consider the information contained therein to be complete. Before any item or treatment is reported, or excluded from reporting on tax returns, financial statements, or any other document, for any reason, readers should thoroughly evaluate their specific facts and circumstances, and obtain the advice and assistance of qualified tax advisors. The information reported in these releases may not continue to apply to a reader's situation due to changing laws and associated authoritative literature, and readers are reminded to consult with their tax or other professional advisors before determining if any information contained herein remains applicable to their facts and circumstances.

Author

Julie Smith
Senior Director, Washington D.C.
703-852-5020
Email

Fabio Gadelha, Senior Associate, contributed to this article.

For More Information on this Topic, Contact:

Juan Carlos Ferrucho
Managing Director, Miami
305-704-6670
Email | Profile

Albert Liguori
Managing Director, New York
212-763-1638
Email | Profile

David Zaiken
Managing Director, San Francisco
415-490-2255
Email | Profile

Other Related Issues:

04/15/08 Treasury Refreshes the Application of Subpart F to Contract Manufacturing
12/06/07 Stay the Course — Check-the-Box Regulations Still Valid
06/08/06 The TIPRA Sub F Look-Thru Rule: Satisfy Your Repatriation Hunger

Feedback:

We would like to hear from you.
Click here to provide your feedback.

About Alvarez & Marsal Taxand

Alvarez & Marsal Taxand, an affiliate of Alvarez & Marsal (A&M), a leading global professional services firm, is an independent tax group made up of experienced tax professionals dedicated to providing customized tax advice to clients and investors across a broad range of industries. Its professionals extend A&M’s commitment to offering clients a choice in advisers who are free from audit-based conflicts of interest, and bring an unyielding commitment to delivering responsive client service. A&M Taxand has offices in major metropolitan markets throughout the U.S., and serves the U.K. from its base in London, England.

Alvarez & Marsal Taxand is a founding member of Taxand, the first global network of independent tax advisers that provides multinational companies with the premier alternative to Big Four audit firms. Formed in 2005 by a small group of highly respected tax firms, Taxand has grown to more than 2,000 tax professionals, including 300 international partners based in more than 40 countries.

To learn more, visit www.alvarezandmarsal.com or www.taxand.com.

© Copyright 2008 Alvarez & Marsal Holdings, LLC. All Rights Reserved.