IRS Provides Additional Details on Repatriation Tax
Amit Chandel
I help business owners to achieve financial goals by minimizing taxes | Award winning Author | 2017 Tax Planner of the year
The Internal Revenue Service is giving taxpayers additional guidance on how to pay the tax on repatriated earnings included in the new tax law.
The agency on Tuesday published a Frequently Asked Questions page about the transition tax under tax code Section 965. Taxpayers who owe the tax will pay that on the tax returns they are submitting this filing season.
The new Section 965 in the tax law (Pub. L. No. 115-97) requires companies to pay a one-time tax on income they have overseas since 1986. The law deems the repatriation to have taken place before Jan. 1, 2018. It imposes a tax of 15.5 percent on cash or cash equivalents and of 8 percent on illiquid assets.
The IRS is requesting that taxpayers who electronically file Form 1040, the U.S. Individual Income Tax Return, to wait until April 2, 2018. This will provide the IRS time to make certain system changes to allow the returns to be accepted and processed, the agency said.