EY Tax alert

Report on recent US international tax developments. The United States (US) Internal Revenue Service (IRS) on 4 June issued a news release (IR-2018-131) announcing that certain late-payment penalties relating to the Internal Revenue Code Section 965 repatriation transition tax will be waived, and providing additional information for individuals subject to the transition tax regarding the due date for relevant elections. The relief is explained in three new FAQs posted on the IRS’ tax reform page, supplementing 14 existing questions and answers that provide details on reporting and paying the tax.

The IRS announced that, in some cases, the IRS will waive estimated tax penalties for taxpayers subject to the transition tax who improperly attempted to apply a 2017 calculated overpayment to their 2018 estimated tax, if all required estimated tax payments are made by 15 June 2018. In addition, the IRS will waive the late payment penalty for individual taxpayers who missed the 18 April 2018 deadline, if the installment is paid in full by 15 April 2019. This relief is only available if the total transition tax liability is less than US$1 million.

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Ernst & Young LLP, International Tax Services, Washington, DC

Arlene Fitzpatrick arlene.fitzpatrick@ey.com;

Joshua Ruland joshua.ruland@ey.com

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