Tax Planning Woes Hit Foreign Entities as Shutdown Lingers

Certain types of foreign entities like limited liability companies and partnerships are trying to make a “check-the-box” election on how to be taxed in the U.S., but they can’t because of a procedural hang-up caused by the government shutdown.

Owners of foreign entities can shave off a substantial portion of their U.S. liabilities by making an election to be taxed as a corporation, flow-through, or disregarded entity upon formation. But without a procedural response from the Internal Revenue Service, or by missing a 75-day window to make ...