DOGGETT TAX INCREASE AS FARM BILL PAY-FOR
SECTION 163(J)
DEFERRED COMPENSATION: SECTION 409A
REVISIONS TO FBAR INSTRUCTIONS
AT ISSUE:
In June 2008, the House included a modified Doggett tax provision as a revenue raiser in Alternative Minimum Tax Relief Act of 2008 (Sec. 203 of H.R. 6275) which, while significantly improved from an earlier version, would continue to discriminate against U.S. subsidiaries of companies headquartered abroad. OFII believes that the revised version is still in violation of many of our international tax treaties, and significantly harms U.S. subsidiaries who have no control over whether or not their home country has a tax treaty with the United States. OFII strongly believes that a re-negotiation of existing tax treaties that do not already contain a Limitation on Benefits (LOB) provisions is a more appropriate way to address concerns.
Section 203 of H.R. 6275 Text
OFII RESOURCES:
Background
on Tax Treaties
Background
on Withholding Taxes
Chart
of U.S. Withholding Tax Rates
Doggett Tax Archives
AT ISSUE :
Internal Revenue Code IRC Section 163 (j)) arbitrarily and discriminatorily limits tax deductions U.S. subsidiaries can take on loans from related and unrelated (with a parent company guarantee) parties. U.S.-based companies do not face these same restrictions. There have been numerous attempts in Congress to further tighten this already discriminatory provision of the Code. OFII actively works against these proposals and continuously provides education to Capitol Hill on U.S. subsidiaries’ taxes and financial structures.
OFII DOCUMENTS:
OFII Letter to Chairman Thomas opposing discriminatory tax provision in the JOBS Act that would amend IRC Sect. 163(j); October 31, 2003
OFII White Paper Detailing Concerns on Related Party Interest Expense Proposal in '04 Budget;
April 7, 2003
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AT ISSUE :
Section 409A of the recently enacted “American Jobs Creation Act of 2004” requires accelerated taxation (plus a 20% penalty tax) of many forms of deferred compensation. The statute applies to Stock Appreciation Rights ("SARs") and would require inclusion in the recipient's income at the time of vesting, rather than exercise. Fair market stock options are not subject to the new rules, although economically equivalent to SARs.
Prior to the Treasury Department issuing guidance to companies on the rules governing Section 409A, OFII submitted comments as to the implication for U.S. subsidiaries of foreign companies.
OFII DOCUMENTS:
OFII Comments to Treasury Department on Deferred Compensation Guidance:
March 30, 2005
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OFII
Letter to Secretary Paulson on IRS Response to FBAR Revisions
March 20, 2007
IRS
Response to OFII Proposed Revisions to FBAR
February 21, 2007
OFII
Letter on Proposted Revisions to the FBAR Instructions
June 5, 2006
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