Supreme Court Won’t Hear FBAR Penalty Dispute
The U.S. Supreme Court declined to hear a taxpayer’s dispute of a foreign bank account failure penalty. In the dispute, the taxpayer challenged a loss at the U.S. Court of Appeals for the Third Circuit, where the court affirmed that the taxpayer willfully failed to file a Foreign Bank and Financial Accounts report for his Swiss bank account. The taxpayer argued that the court incorrectly applied a test established by the Supreme Court’s decision in 2007 for determining the application of willful failures toward reckless reporting violations.
Facebook and IRS Agree to Instagram’s Income Increase
Facebook Inc. and the IRS agreed to increase the company’s royalties for transferring Instagram property to a Facebook subsidiary in Ireland by $498 million. The IRS earlier claimed that Facebook owed more than $170 million in taxes and penalties. In the petition, Facebook said that the IRS’s initial adjustments under Section 482 were tied to the company making intangible property available to the Ireland entity.
State Organization Suggests Model Sourcing Rule for Partnership Taxation
The Multistate Tax Commission discussed a draft sourcing rule that could help states avoid jurisdictional disputes over the taxation of income by certain nonresident partners. The model regulation addresses the sourcing of investment partnership income and may cause the states to uniformly tax the earning of nonresident partners. The draft holds that a nonresident partner’s distributive share of income is apportioned to a particular state at the partnership level based on the partnership’s business activities in the state.
Information contained in this publication should not be construed as legal advice or opinion or as a substitute for the advice of counsel. The articles by these authors may have first appeared in other publications. The content provided is for educational and informational purposes for the use of clients and others who may be interested in the subject matter. We recommend that readers seek specific advice from counsel about particular matters of interest.
Copyright © 2023 Stradley Ronon Stevens & Young, LLP. All rights reserved.