Last week, the Internal Revenue Service (IRS) placed certain Malta-based pension plan arrangements on its annual “Dirty Dozen\u201d list of \u201ctax scams.\u201d \u00a0In its recent news release, the IRS warns that it is evaluating the validity of such arrangements and may challenge the tax treatment of Maltese pension plan contributions and distributions. IR-2021-144 (July 1, 2021).<\/p>\n\n\n\n
The types of pension arrangements that have attracted IRS\nattention involve a U.S. citizen or resident who contributes appreciated assets\nto a Maltese pension plan, sells the assets within the plan, and receives a\ndistribution of proceeds relating to the asset sales from the plan. Some\nUS citizens and residents, the IRS said, are relying on an interpretation of\nthe US-Malta Income Tax Treaty to avoid tax by moving assets to Maltese pension\nplans.<\/p>\n\n\n\n
The IRS said it is evaluating the issue to determine the validity\nof these arrangements. It also warns that it might challenge the way the treaty\nis being used. Generally, the listing of an arrangement on the \u201cDirty Dozen\u201d\nleads to increased IRS activity, and participants in Maltese pension plans\nshould prepare to aggressively defend their tax reporting positions. <\/p>\n\n\n\n
The IRS publishes its Dirty Dozen list each year for multiple\nreasons. Primary among these motivations is to inform the unwary of those\nschemes that might be perpetrated against them to reduce the likelihood of\nsuccess.<\/p>\n\n\n\n
Affected persons are urged to consult a tax professional to determine whether their arrangement is covered by the Treaty definition of \u201cpension fund.\u201d If it is not, we can work with you to take all corrective actions as necessary.<\/p>\n","protected":false},"excerpt":{"rendered":"
Last week, the Internal Revenue Service (IRS) placed certain Malta-based pension plan arrangements on its annual “Dirty Dozen\u201d list of \u201ctax scams.\u201d \u00a0In its recent news release, the IRS warns that it is evaluating the validity of such arrangements and may challenge the tax treatment of Maltese pension plan contributions and distributions. IR-2021-144 (July 1, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"1","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-4560","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4560","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=4560"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4560\/revisions"}],"predecessor-version":[{"id":4564,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/4560\/revisions\/4564"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=4560"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=4560"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=4560"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}