IRS Issues Additional Guidance on Transition Tax on Foreign Earnings | WPN World People News

The Treasury Department and the Internal Revenue Service (IRS) provided additional guidance (Notice 2018-13) for computing the “transition tax” on the untaxed foreign earnings of foreign subsidiaries of U.S. companies under the Tax Cuts and Jobs Act on Jan 19, 2018.

On Dec. 29, 2017, the Treasury Department and the IRS provided initial guidance on computing the transition tax in Notice 2018-07.

The notice describes regulations that the Treasury Department and the IRS intend to issue, including rules addressing the calculation of earnings under the transition tax and other rules to clarify certain aspects of the law. The notice also makes a modification to the prior notice issued on Dec. 29, 2017, regarding the repatriation of earnings subject to the transition tax. Finally, the notice provides taxpayers targeted relief from certain unintended regulatory and reporting consequences arising from a change to existing stock attribution rules in the recent tax legislation.

Additionally, Treasury and the IRS request comments on the rules described in the notice and on what additional guidance should be issued to assist taxpayers in computing the transition tax. The Treasury Department and the IRS expect to issue additional guidance in the future.

Source:Internal Revenue Service