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IRS releases FAQs on reporting for Section 965

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Cyber security rgb tealThe IRS released much-anticipated guidance March 13 regarding the reporting and payment of tax associated Section 965 inclusions on 2017 income tax returns. Section 965, enacted by P.L 115-97 (the Tax Cuts and Jobs Act), generally requires U.S. shareholders to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations.

The new provision applies with respect to the last taxable year of certain specified foreign corporations beginning before Jan. 1, 2018, and the amount included in income under Section 965 is includible in the U.S. shareholder's year in which or with which such a specified foreign corporation's year ends. As a result, many taxpayers may have to pay tax resulting from Section 965 when filing their 2017 income tax returns.

Download this Grant Thornton Tax Flash for details on these new IRS guidelines.