When a client's business operates across multiple jurisdictions, the need to coordinate tax events and minimize the overall tax burden of the holding in all jurisdictions arises. This process is referred to as tax planning. The goals are accomplished through a combination of contractual tools, transfer pricing strategies, corporate and trust structures, as well as intellectual property management. Jurisdictions for these instruments are chosen based on whether double taxation treaties established and are categorized as “conduit jurisdictions” and “sink jurisdictions.”
The primary aim of tax planning is to ensure that the holding's profits are allocated to a jurisdiction with the lowest tax burden — the sink jurisdiction. This jurisdiction can serve either for long-term profit storage or as a "wallet jurisdiction" from which the business owner can draw funds for personal use.
In cases where the business involves multiple partners, tax planning facilitates the structuring of operations to prioritize the interests of specific partners during internal corporate disagreements.
U.S. Tax Returns
I am a U.S. tax attorney specializing in full tax compliance. I provide comprehensive services for the preparation, extension, and filing of all types of tax returns, including income and gift tax returns (Forms 1040, 1041, 1065, 1120, and others). I also specialize in preparing and filing amended tax returns and providing representation in tax audits.
I offer expert review of previously filed returns and provide legal support in complex tax situations. This includes conducting a legal assessment of tax positions and offering counsel on applying the Fifth Amendment in cases where disclosing information could lead to criminal liability.
My services cover both domestic and complex international tax matters, including:
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Foreign Asset Disclosure: Handling disclosures related to foreign assets, including filings like Form 5471(Information Return of U.S. Persons With Respect to Certain Foreign Corporations), Form 5472 (Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business), and Form 8858 (Information Return of U.S. Persons With Respect to Foreign Disregarded Entities and Foreign Branches).
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International Tax Management: Managing foreign tax credits through Form 1116 (for individuals) and Form 1118 (for corporations).
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Subchapter N Compliance: Navigating complex international tax rules, including those related to NCTI/ GILTI on Form 8992, FDDEI (Foreign-Derived Intangible Income) on Form 8993, and Country-by-Country Reporting on Form 8975.
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Debt Structuring: Providing guidance on debt structuring and related filings, such as Form 8990 (Limitation on Business Interest Expense Under Section 163(j)).
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FBAR & FATCA: Offering full support and analytics for FBAR (Report of Foreign Bank and Financial Accounts) and FATCA (Foreign Account Tax Compliance Act) compliance.
Entrust me with your tax obligations and gain confidence in their flawless execution.
U.S. Corporate Tax
The U.S. corporate tax landscape is an intricate system that demands a sophisticated understanding for effective navigation and management. As a seasoned tax attorney, I offer a full spectrum of services designed to address the tax implications at every stage of a corporation's lifecycle.
Entity Formation and Tax Planning. At the foundational stage, I provide strategic counsel on selecting the optimal business entity and holding company structure to align with your long-term objectives. This initial analysis includes a detailed projection of the tax burden to identify opportunities for effective tax optimization. I also advise on the tax consequences of property contributions to the corporation's capital, a critical consideration during both initial capitalization and subsequent funding rounds.
Corporate Reorganizations. My practice extends to providing expert support for corporate reorganizations. I guide clients through both taxable and non-taxable transactions, ensuring compliance with complex statutory and judicial requirements. I also advise on the preservation and transfer of valuable corporate tax attributes, such as net operating losses, a critical component of any restructuring.
Corporate Distributions and Liquidations. I offer expert guidance on the tax treatment of asset distributions, whether they are routine dividends or a return of capital. I assist in navigating the complex rules surrounding distributions in the ordinary course of business and in the context of a complete liquidation.
Consolidated Reporting and Compliance. For affiliated corporate groups, I specialize in the preparation and filing of consolidated tax returns, ensuring all intragroup transactions are properly accounted for and reported. My overarching objective is to help you build and maintain a legally sound and tax-efficient corporate structure that not only ensures compliance but also enhances the overall value of your U.S. business operations.
U.S. Estate and Gift Taxes
The U.S. estate and gift tax system is one of the most intricate areas of tax law, particularly when it involves international assets. It affects U.S. citizens, residents, and foreign persons who hold property within the country. I provide expert legal guidance, based on a deep understanding of the law and relevant case precedent, to ensure full compliance and minimize risk.
Gift Tax. Unlike many other jurisdictions, the U.S. gift tax is imposed on the donor, not the recipient. A gift is defined as a transfer stemming from the "detached and disinterested generosity" of the donor, as established by the Supreme Court in Commissioner v. Duberstein, 363 U.S. 278 (1960). This is the key distinction between a taxable gift and compensation or payment for services. Under IRC §102, gifts themselves are not considered taxable income for the recipient. However, any income subsequently generated by the gifted property (e.g., trust income) is subject to taxation.
Special regulations govern gifts between spouses, which are generally presumed to be for disinterested generosity. Conversely, gifts from an employer to an employee are typically treated as taxable compensation. For the gifted property, the tax basis is generally the donor's original basis, but for the purpose of calculating a loss on a future sale, the basis is the fair market value at the time of the gift.
The international aspect of gift tax requires special attention. For gift tax purposes, the key concept is domicile, which is distinct from the concept of tax residency. U.S. citizens and individuals domiciled in the U.S. are subject to gift tax on worldwide transfers. They are entitled to a substantial lifetime exemption, which is over $12 million. For non-residents who are not domiciled in the U.S., the tax only applies to gifts of U.S.-situs property, and their exemption amount is significantly limited.
Additionally, there is an annual exclusion that allows a donor to gift a certain amount without needing to file a gift tax return (in 2024, this is $18,000). If a gift exceeds this limit, the donor must file Form 709. The recipient may also be required to file Form 3520 if they receive a gift from a foreign person that exceeds $100,000.
Estate Tax. Under IRC §102, the transfer of property at death is not considered taxable income for the heir. The principle of "disinterested generosity" also applies to bequests: if a bequest is determined to be compensation for services, it will be taxed as income. The tax basis of inherited property is stepped up to the fair market value on the date of the decedent's death. I provide comprehensive legal support to help you navigate these complex rules, ensuring your assets are protected and transferred securely.
Tax Audits & Disputes with IRS
A tax examination, commonly referred to as an audit, can be initiated for a variety of reasons. These can be internal, where stakeholders or management seek to verify the accuracy of a company's tax returns and liabilities, or external, conducted by the IRS or foreign regulatory bodies. If you encounter issues during such an audit or receive a notice of a tax deficiency, it is critical to address them immediately. Unresolved tax liabilities can have severe consequences, including negative impacts on your immigration status, credit score, and eligibility for U.S. citizenship or professional licenses.
I am prepared to assist you at every stage of this process, from an initial analysis of your tax position and representation during the audit to the preparation of necessary documentation and advocacy before the IRS. My experience encompasses a wide range of tax matters, including those involving foreign income.
Disclosure of Foreign Financial Accounts (FBAR/FATCA) and Corporate Assets
U.S. law mandates that U.S. persons, including citizens, residents, and domestic entities, disclose their interests in foreign bank accounts, financial assets, and corporate structures. This obligation is primarily governed by two distinct statutory frameworks: the Bank Secrecy Act (Title 31), which includes the FBAR (Report of Foreign Bank and Financial Accounts), and the Internal Revenue Code (Title 26), which includes the FATCA (Foreign Account Tax Compliance Act). It is crucial to understand that compliance with one of these regimes does not fulfill the requirements of the other.
Disclosure of Foreign Financial Accounts. U.S. persons must disclose foreign accounts under both the FBAR and FATCA regimes.
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FBAR (FinCEN Form 114): You are required to electronically file FinCEN Form 114 if the aggregate value of all your foreign financial accounts exceeded $10,000 at any point during the calendar year. This requirement applies to both individuals and entities. The reporting obligation extends to a wide range of accounts, including bank, brokerage, futures, options, insurance, and retirement accounts. It is important to note that while accounts in hedge funds and cryptocurrency accounts are not currently subject to FBAR reporting, this is a topic of ongoing regulatory discussion. The duty to report arises even if you are merely a nominal owner or have signatory authority, power of attorney, or control over more than 50% of the company that owns the account. The due date is April 15, with an automatic extension to October 15.
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FATCA (Form 8938): FATCA reporting on Form 8938 is filed by individuals along with their annual Form 1040tax return if the aggregate value of their foreign financial assets exceeds specific thresholds, which vary based on filing status and place of residence.
Disclosure of Foreign Corporate Interests. In addition to financial accounts, U.S. taxpayers must notify the IRS of their ownership interests in foreign corporations, partnerships, and other entities. This applies not only to owners but also to directors and officers, depending on their role and level of control. Key reporting forms include:
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Form 5471 for foreign corporations.
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Form 8858 for foreign disregarded entities and foreign branches.
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Form 8865 for foreign partnerships.
Failure to comply with these disclosure requirements carries severe penalties, including substantial monetary fines (starting at $10,000 per form) and potential criminal liability for willful non-compliance.
Why Compliance Matters. Properly disclosing foreign assets is not a mere formality but a fundamental element of U.S. tax compliance. Given the complexity of these rules, the broad definition of a "U.S. person," and the strict penalties for non-compliance, professional legal assistance is essential. As a tax attorney, I can help ensure the accuracy and timeliness of your reporting, allowing you to avoid significant fines and other adverse consequences.
International Taxation
In a world where business has no borders, international taxation has become one of the most complex and dynamic areas of law. Effectively managing tax risks and opportunities is crucial for the success of companies and the financial well-being of individuals with cross-border activities. I specialize in providing comprehensive legal and strategic counsel, helping you not just comply with regulations but also optimize your tax position on a global scale. My goal is to turn the complexities of international taxation into your competitive advantage.
Global Supply Chain & Transfer Pricing. I provide expert guidance on the intersection of transfer pricing and customs duties. By strategically aligning these two areas, I help clients structure their supply chains to ensure compliance while optimizing their overall tax and duty burden. This involves developing robust transfer pricing policies that are defensible under global tax regulations and harmonize with customs valuation rules.
International Tax Strategies & Planning. I advise on sophisticated international tax strategies, including the proper application of tax treaties. My services include:
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Tax Treaty Shopping: Analyzing and advising on the benefits and limitations of using tax treaties to achieve tax efficiency, while ensuring compliance with anti-abuse provisions.
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Tax Arbitrage: Structuring transactions to exploit differences in tax laws between jurisdictions to reduce the overall tax liability.
Outbound U.S. Taxation. U.S. tax law has complex rules for taxing the foreign activities of U.S. persons. I provide specialized counsel on a variety of outbound tax issues, including:
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Subpart F: Guiding clients through the rules that require U.S. shareholders to include certain passive or mobile income of their controlled foreign corporations (CFCs) in their taxable income.
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NCTI (Net Controlled Foreign Corporation Taxable Income) & FDDEI (Foreign-Derived Deductions Eligible for Exclusion from Income): Advising on the proper application of these complex rules to a company's international operations.
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PFIC (Passive Foreign Investment Company): Assisting clients with the complex reporting and tax implications of owning stock in a PFIC.
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BEAT (Base Erosion and Anti-abuse Tax): Counseling on the application of this minimum tax on certain payments made by U.S. corporations to foreign affiliates.
Capital Expatriation & Repatriation. I assist clients in planning and executing the movement of capital across borders. This includes advising on the tax implications of repatriating foreign earnings to the U.S. and the tax consequences of expatriating capital out of the U.S.
International Corporate Structuring. I help clients design and implement tax-efficient global corporate structures. This service is designed to minimize tax exposure on international operations while maintaining operational flexibility and full regulatory compliance.
Tax Residency & Compliance. I offer strategic advice on tax residency planning to help individuals and companies manage their tax obligations across jurisdictions. I also assist clients with obtaining the Certificate of U.S. Tax Residency (Form 6166), which is essential for claiming benefits under U.S. tax treaties.
Exit Tax. For individuals considering relinquishing their U.S. citizenship or long-term residency, I provide comprehensive guidance on the exit tax rules. This includes calculating potential tax liabilities, determining if an individual is a "covered expatriate," and ensuring full compliance with all related reporting requirements.
Viacheslav Kutuzov | International & U.S. Taxation Expert
We minimize your taxes domestically and internationally...
Viacheslav S. Kutuzov
VIACHESLAV KUTUZOV, Esq.
International and U.S. Taxation Expert, New York Tax Attorney & Counselor-at-Law
55 Broadway, Floor 3, New York, New York 10006
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