AICPA Submits International Tax Recommendations to Congress to Simplify and Correct Existing Provisions
May. 13, 2021
The American Institute of CPAs (AICPA) has submitted recommendations on international tax positions to the Senate Finance Committee and the House Ways & Means Committee that address legislative proposals and statutory provisions requiring modification. The AICPA’s international tax recommendations correct technical problems in the Internal Revenue Code and simplify existing provisions.
The technical recommendations submitted will help create a fairer tax system for taxpayers and create much-needed clarity of international tax rules. The AICPA proposes that Congress:
1. Provide legislation to clarify the limited nature of section 958(b)(4) repeal.
2. Permit taxpayers with outstanding section 965(h) installments to obtain a refund for overpayments of tax, notwithstanding any future installment amounts of section 965 transition tax liability.
3. Consolidate the reporting of foreign assets under Title 31 and Title 26 into a single report.
4. For purposes of assessing penalties related to international information reporting, grant an automatic 6 month extension time to file international information returns without requiring the filing of Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns or Form 4868, Application for Automatic Extension of Time To File U.S. Individual Income Tax Return.
5. Clarify that the section 78 gross up is not necessary when foreign taxes are properly attributable to previously taxed earnings and profits (PTEP) distributions.
The AICPA’s recommendations focus on improving international tax administration and effectively promoting important policy objectives. Additional tax recommendations are also being considered and will be presented to Congress as new legislative proposals are released.