Fairleigh Dickinson University s2

Fairleigh Dickinson University Silberman College of Business Administration

INTERNATIONAL TAX III Tax 7711 April 17, 2010

Instructor: Marshall P. Bartlett Tel. (973) 993-5974 Fax: (973) 993-8082 FDU Tel. (973) 443-8843 NYC: 212 209-3033 E-Mail: [email protected]

Robert Wellbrock Tel. (908) 822-9465 Fax: (908) 822-2449

COURSE SYLLABUS

REQUIRED text (for all three International Tax Courses):

Kuntz, Joel D., and Peroni, Robert J., U.S. International Taxation, Warren, Gorham and Lamont, Boston, 1994 (with cumulative supplement), 3 Volumes.

COURSE REQUIREMENTS

% of Grade Description

25 Mid-Term Exam 20 Outline Presentations on a Specific Section 482 Case and Check the Box Illustration 10 Classroom Participation 45 Final Exam

GOALS:

This course will enable the student to:

1) Identify intercompany pricing issues; 2) Plan and perform intercompany pricing studies; 3) Avoid the Section 6662 penalty provisions in intercompany pricing cases;

1 4) Apply the Section 482 rules; 5) Plan to use an appropriate entity in structuring international transactions; 6) Use check-the-box rules to improve the tax effectiveness of taxpayer’s corporate structure; 7) Avoid conduit financing recharacterization; 8) Plan for simple international reorganizations and restructurings; 9) Identify and address problems of Dual Consolidated Losses; 10) Review of Section 1248, including difference between All E & P amount and Section 1248 amount

COURSE OUTLINE AND READING REQUIREMENTS

NOTE: Always read pages in supplement which correspond to reading assignment.

Approximate Class Date

April 17 1. Overview, administrative matters.

2. Introduction to Section 482: Concepts, IRS Authority. Intercompany pricing: rules of general application, best method rule; rules relating to sale of goods. Advance reading: A3: 7 to 12; A3: 29 to 62; A3: 163 to 210;

Assign cases for review by each member of class. IRC Section 482; Regs. 1.482-1,3,5, and 8 (read no later than April 24 Class). See also proposed regulations on deductions from Intangibles including new proposed regulation 1.482-9

April 24 3. Intercompany Pricing: Cost sharing agreements, royalties, etc. Advance Reading: A3: 94 to 125; A3: 149 to 163 Regs. 1.482-4, 6, and 7

4. Intercompany Pricing: Interest. OID,etc.; Rents. Advance reading: A3: 62 to 93 Reg. 1.482-2

May 1 5. Intercompany pricing: other issues: services, PLR 8806002,

2 Read PLR 8806002

6. Advance pricing agreements and Section 482 procedural issues. Collateral Effects. Transfer pricing penalties. Advance reading: A3: 210 to 246; A3: 246 to 267 IRC Section 6662 Regs. 1. 6662-5,6

May 8 7. Conducting intercompany pricing studies: engagement planning, basics of economic analysis Advance Reading: Regs. 1.482- (1) (c)

8. Sale of CFC Stock (Section 1248); Recharacterization of gain as dividend

Advance reading: B 6: 29 to 66 IRC Section 1248 Regs. 1.1248-1, –2, and -7

9. Review of Earnings and Profits; Compare All E & P amount with Section 1248 Amount Advance Reading: B6: 28-29; Bittker & Eustice, Section 7.03

May 15 10. Anti-conduit Regulations: IRS recasting of back to back or Similar loans. Advance reading: SC 1: 25-40 IRC Section 7701 (l) Regs. 1.881-3

11. Provisions relating to Dual Consolidated Losses Advance Reading: B1: 151-165; SB1: 58-84 Regs. 1.1503-2, -2A, -2T

May 22 No Class May 29 Memorial Day 12. Choice of entity: corporation, partnership or hybrid entity. Effects of choices of entity on U.S. tax of corporations and individuals. Advance reading: SB7: 26 to 69

3 IRC Sections 7701 (a) (3), (4), (5), and (30) Regs. 301.7701-1, 2,3, 3T; 1.954-9T, Proposed Regs. 7701-2, -3

13. Check the Box Structuring Symposium Each participant brings an example of checking the box; impact of check the box techniques on Subpart F

June 5 14. Outbound organizations and reorganizations: formation of foreign corporations. Advance reading: A3: 125-148; B2: 14 to 55; SB 2: 5 to 27 IRC Sections 351, 357, 358, 361,367 Regs. 1.367(a)-1T, 2T, 5T, 6T; 1.367(d)-1T

June 12 15. Outbound Reorganizations Advance reading: B5: 4 to 101 (skim); SB 5: 1-64 (more important) IRC Section 368 (a) Regs. 7.367(a) -- provisions not cited above

16. Inbound and foreign to foreign reorganizations Advance Reading: B6: 67 to 86; SB 6: 11 to 33 (more important) IRC Sections 331,332, 367(b) Reg. 7.367(b) and 1.367 (b) (as much as possible) June 19 17. PFICs: Overview Effect on US shareholders of owning passive foreign investment companies; Advance Reading: B2: 114-166 IRC Sections 956A; 1291-1297

June 26 FINAL EXAM