IRS Aims to Limit Foreign-Trust Tax Abuses Through New Rules (1)

The IRS proposed regulations Tuesday that would revise its standards for US taxpayers to report large foreign gifts and transactions with foreign trusts, aiming to address its longtime concern that such transactions can be used to avoid taxes.

The rules (REG-124850-08, RIN 1545-BI04) would make changes to rules governing foreign trusts’ loans to US persons and how US persons used the trusts’ property under tax code Section 643(i), as well as changes to information-reporting rules for US recipients of foreign gifts and for US persons’ transfers to, creation of, ownership of, and receipt of distributions from foreign ...