With the increased magnitude of cross-border investment and trade, as well as the increased mobility of individuals, the international aspects of the U.S. income tax system have become increasingly important. This course focuses on these international aspects. In particular, it addresses the manner in which the United States taxes foreign business entities and foreign individuals on income earned in the United States (so-called “inbound” transactions), and the manner in which the United States taxes U.S. business entities and U.S. individuals on income earned abroad (so-called “outbound” transactions). To a lesser extent, we will discuss the manner in which a foreign country might also tax those same entities or individuals.
The relevant law in this area is governed in the first instance by the Internal Revenue Code of 1986, as amended (the “Code”). These statutory provisions are supplemented by Regulations and other administrative guidance issued by the U.S. Treasury Department and the Internal Revenue Service, as well as case law interpreting the statutes. In addition, international tax treaties, which are negotiated on a bilateral basis between countries, play an important role in this area, and will be examined throughout the course.
In addition to focusing on the statutory and treaty rules, the course will address the complex policy issues that arise in the international tax arena. Also, we will discuss the extent to which the current U.S. tax rules adequately address modern developments in the worldwide economy, such as electronic commerce.