Tax & Accounting Blog

Why Nature of Income Paid to Foreign Vendors Matters Part 5 – Unknown Source of Income

Why Nature of Income Paid to Foreign Vendors Matters Part 5 – Unknown Source of Income

AP must also know whether or not the income being paid is U.S.-source in order to withhold and report correctly. During an audit, the IRS will request evidence supporting foreign-source payments such as contracts, invoices, expense reports and so forth. If a payment to a foreign vendor includes both U.S.- and foreign-source income and no … Read More

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U.S. District Court Rules that under ERISA and U.S. v. Windsor, Same-Sex Surviving Spouse Receives Death Benefit from Qualified Plan

On July 29, the United States District Court for the Eastern District of Pennsylvania issued an order that that a same-sex surviving spouse was entitled to receive the “surviving spouse” death benefit under an employer’s qualified employee benefit plan. The court found that the United States Supreme Court’s decision in United States v. Windsor, declaring … Read More

Why Nature of Income Paid to Foreign Vendors Matters Part 4 – Bundled Income

Why Nature of Income Paid to Foreign Vendors Matters Part 4 – Bundled Income

When an income payment is one amount that covers more than one type of income, the payment must be reasonably allocated among all types of income covered by the payment. For example, a single payment to a foreign vendor for the purchase of equipment, which is not subject to 30 percent withholding, might include shipping … Read More

Ask the Expert: Land Lease Payment Reporting on Form 1099-MISC

Ask the Expert: Land Lease Payment Reporting on Form 1099-MISC

Question: Our company is acquiring some vacant land on a long-term land lease. Does that require tax reporting on a Form 1099? Answer from Marianne Couch of COKALA Tax Information Reporting Services: It depends on what the payment is really for. If it is a straightforward lease with fewer than 30 years remaining on the … Read More

IRS Adds the Croatian Dionicko Drustvo to the Per Se List of Foreign Corporations

IRS Adds the Croatian Dionicko Drustvo to the Per Se List of Foreign Corporations

IRS Notice 2013-44 alerts payers that the Internal Revenue Service and the Treasury Department will amend sec. 301.7701-2(b)(8) of the Procedure and Administration Regulations to add the Croatian dionicko drustvo to the list of entities that are always treated as corporations under section 7701 of the Internal Revenue Code. Reg. section 301.7701-2(b)(8) provides a … Read More

Why Nature of Income Paid to Foreign Vendors Matters Part 3 – Uncategorized Income

Why Nature of Income Paid to Foreign Vendors Matters Part 3 – Uncategorized Income

In order for payments to foreign vendors to be timely made and correctly withheld and reported, accounts payable (AP) personnel need to know the nature of the income before payment is made, ideally before the invoice is received. Since many payments are based on the terms of the agreement, this can best be determined at … Read More