A recent client has notified your firm that they have been under IRS audit for the past
Question:
A recent client has notified your firm that they have been under IRS audit for the past two years. The client had formed as a C Corporation two years ago. There are two 50% shareholders who are brother and sister. The client is a small business specializing in the service industry. At the time of the formation of the business, one of the shareholders is living outside of the United States in Germany and the other is legally residing in the United States. The shareholder who was residing outside the United States entered into the United States without going through the appropriate immigration procedures required by law but has been residing in the United States for the past six months. The client wants to understand their potential exposure to violations of the tax law, how to rectify any potential violations, and develop a tax planning strategy moving forward.
A) outlining an understanding of the relevant tax law, ethics issues that merge business and society, international tax laws with tax treaty implications, etc; and
B) You must cite at least five relevant sources of authority and attach them to your paper.
Students can go to this IRS link to see the actual text of the tax treaty for their selected country: https://www.irs.gov/businesses/international-businesses/united-states-income tax treaties a to z
Related to International Issues, there are three areas in the Treasury Department's webpage that may be relevant to students:
Tax Information Exchange Agreements (TIEAs): This page posts the texts of recently signed U.S. income tax treaties, TIEAs, and the accompanying technical explanations as they become publicly available. https://www.treasury.gov/resource-center/tax-policy/treaties/Pages/treaties.aspx
Foreign Account Tax Compliance Act (FACTA)
This page posts Treasury documents related to the implementation of FATCA, including Model Agreements, recent statements, and press releases.
https://www.treasury.gov/resource-center/tax-policy/treaties/Pages/FATCA.aspx
Other International Documents
Expert Answer:
Answer A Here is a summary of the relevant tax law ethics issues international tax laws and tax treaty implications that may affect your case as well as some potential strategies to rectify any violat... View the full answer
