• Monte Silver, Tax lawyer

Update on the Transition tax installment payment.

Hi All

A short update on the Transition/GILTI tax advocacy and the lawsuit, as it impacts the upcoming Transition tax payment. I provide this update given the fact that April 15, 2019 is soon upon us and numerous people have inquired as to the status of the Transition tax installment payment due.

As you are aware, last April (2018), we received the first relief from Treasury. The relief was quite clear and stated that if the person’s ordinary filing date was June 15, then the time to make the installment payment was June 15. See the text of the relief at https://drive.google.com/file/d/1cVkvUho460loEEUJKkMAuNYwvlo8faNJ/view

The second relief we received from Treasury, in June 2018, stated that if an individual shareholder of a CFC had less than $1,000,000 in total Transition tax liability, then the first payment (due April 15 for US based taxpayers, or June 15, 2018 for Americans living abroad) could be postponed till April or June 15, 2019 respectively. In other words, by April 15 or June 15, 2019, the first and second Transition tax installment payment is due.

Will any relief be obtained by the payment deadlines?

By April 15, 2019 – no. By June 15, 2019 - which is most relevant to Americans abroad, the answer is – quite possibly.

True, the government has endless resources to fight lawsuits over years and they would fight this lawsuit as well. However, two things:

(1) this lawsuit involves procedural violations so is relatively brief, and

(2) relevant senior officials realize that our lawsuit is iron clad. Accordingly, the lawsuit has hit a nerve, as I predicted it would. The lawsuit has the potential to bring to light many things that the officials do not want exposed. Even worse, this same arguments in the lawsuit can be used for many other matters. Very bad news.

It may be wise to consult your tax professional on matters involving Transition tax & GILTI


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