The Internal Revenue Service (IRS) Large Business & International (LB&I) division recently updated its active list of compliance campaigns with four new campaigns. Two of these campaigns may impact international taxpayers, so it is imperative to become familiar with them if you conduct business outside of the United States.

1. Allocation of Success-Based Fees

Success-based fees paid in transactions under certain regulations are considered facilitative and are required to be capitalized. This new LB&I campaign’s goal is to ensure taxpayers continue to comply with the current laws.

2. FIRPTA Reporting Compliance for NRAs

The Foreign Investment in Real Property Tax Act (FIRPTA) taxes nonresident aliens (NRAs) on the nature of their U.S. real property interests. The new LB&I campaign intends to enhance FIRPTA voluntary compliance through external education, outreach and issue-based examinations.

Our international tax practice, Moore Doeren Mayhew, further expands on these new campaigns and their effect on international taxpayers in their latest article.