by Jonathan A. Nelson
The World Cup may be over, but a significant potential tax issue remained open until a recent IRS regulation clarified exemption of foreign nonprofit sporting associations from the sometimes-extensive filings required in the United States for tax-exempt entities. For any such organization associated with FIFA and participating in the World Cup (for example, the Royal Moroccan Football Federation), filing of Form 990 is waived as long as the only income in the United States was from the World Cup. This saved potentially thorny enforcement actions with organizations that have varying degrees of relationship with the sovereign governments of the countries they come from. It is nice to see the IRS play ball.
In any given year, there may be a handful of IRS regulations needed to make tax compliance match with other government actions. In one relatively common scenario, when FEMA permits use of agricultural diesel for road use following a hurricane, the IRS has to issue a regulation regarding the recordkeeping for fuel suppliers.
These individual situations are interesting in their own right, but they point to a bigger principle: everything has a tax consequence. Before drafting an estate plan, the questions have to at least be asked to assess what tax issues are at stake, whether federal, state, or local. Before making distributions to beneficiaries, the tax consequences (and whether they are being unfairly shifted between beneficiaries) have to be looked at. Before settling estate litigation, it is important to verify that the settlement is tax efficient and that there will not be subsequent unexpected tax consequences which change the settlement value.
Tax issues can be very complex, and the consequences significant. When working with trust and estate matters, it is vitally important that your attorney understands the complexities and how to navigate the nuances.
Virginia attorney Jonathan A. Nelson practices in estate planning, probate, trust administration, business formation, and estate and trust litigation, and brings nearly 20 years of experience resolving conflicts, negotiating settlements, vigorously advocating in the courtroom, and navigating compliance matters. He uses a personal touch and extensive legal knowledge to ensure that the particular needs and interests of each client are reflected in the legal services they receive.
The attorneys of Smith Pugh & Nelson, PLC, offer the experienced counsel, personal attention, and customized legal services needed to address the many complex issues surrounding estate planning, probate, and trust administration. Contact us at (703) 777-6084 to schedule a consultation.