The IRS recently announced that the agency has become aware of limited circumstances in which it may be appropriate to provide relief from double taxation resulting from application of the repatriation tax under section 965, as amended by the Tax Cuts and Jobs Act also known as the TCJA.

The IRS has determined that in unique circumstances, such as where a corporation paid an unusual dividend for business reasons, not because of the enactment of TCJA, it may be appropriate to provide relief from double taxation, it stated in a news release. When the same earnings and profits of foreign corporations are taxed both as dividends and under section 965, double taxation could result.

The IRS is open to considering relief from such double taxation where there is no significant reduction in the resulting tax by application of foreign tax credits, such that the taxpayer would be required to pay more tax than it would have if the dividend had not been paid, the IRS news release added.

Taxpayers who have fact patterns that may fit these limited circumstances may raise them with the IRS by contacting the Office of Associate Chief Counsel (International) at 202-317-3800.

Tax Credit Benefits Employers Providing Paid Family and Medical Leave

And in more tax and IRS news, the agency reported under tax reform, employers providing paid family and medical leave might qualify for a tax credit.

Here are some facts about the credit the agency provided via a news release:

An employer must have a written policy that provides:

  • At least two weeks of paid family and medical leave annually to full-time employees, prorated for part-time employees.
  • Family and Medical Leave pay that is at least 50 percent of employee’s wages.

Other facts:

  • For tax year 2019, the employee must earn $72,000 or less to qualify.
  • The credit ranges from 12.5 percent to 25 percent for qualifying employees.
  • Some employers are eligible to claim the credit retroactively.

For more information visit the Tax Reform for Businesses page.

Source: Internal Revenue Service