2014-03-13
Last Friday the IRS published the following Private Letter Ruling and Generic Legal Advice Memorandum relating to international taxation.
PLR 201410012 - Contracts issued to U.S. persons by a foreign life insurance company that had elected to be treated as a domestic corporation under Code §953(d) were considered "variable contracts" within the meaning of Code §817(d). The accounts were treated as accounts that are segregated from the general asset accounts of the company “pursuant to State law or regulation,” even though it was under foreign law that the assets were segregated from the general assets of the company.
AM2014-002 - A foreign corporation made an election under §953(d) to be treated as a domestic corporation. During an examination, the IRS concluded that the foreign corporation would not qualify as an insurance company if it were a domestic corporation. As a result, the Code §953(d) election was invalid, and the foreign corporation was a controlled foreign corporation ("CFC").
Because the foreign corporation was a CFC, Form 5471 had to be filed by its U.S. shareholders. The form was not filed, so the period of limitation for assessment of tax remained open and would continue to be open until three years after the Form 5471 was filed. Code §6501(c)(8). The Form 5471 filing obligations were not satisfied by the CFC's filing of Form 1120-PC.
As described earlier, this post may exclude PLRs dealing with typical international related elections.
There were no international PLRs of note for the 9th week of 2014.