2014-08-14
Last week the IRS published the following Private Letter Ruling and Chief Counsel Advice relating to international taxation.
PLR 201432002 - A newly formed foreign corporation was not a surrogate foreign corporation (i.e., there was no inversion) under Code §7874 where it acquired a U.S. corporation from a foreign corporation in a Code §368(a)(1)(F) reorganization that was followed by a private placement and an IPO. The shares of the new foreign corporation were excluded from the numerator and the denominator of the ownership fraction (under the "internal group restructuring" exception) and the private placement and IPO shares were excluded from the denominator (under the "anti-stuffing" rules). This produced an ownership fraction of zero over zero. The ownership requirement was not met and there was no surrogate foreign corporation.
CCA 201432020 - Failure to file a Form 5471 keeps the period of limitations for assessment of tax open for the entire tax return.
For a discussion of the statute of limitations and international reporting requirements, see our post here.