Rich Edson
FOXBusiness
Americans and American businesses earning profits overseas will pay an estimated $210 billion dollars more in taxes over the next decade if Congress approves stricter international tax laws outlined by the Obama Administration Monday.
The Administration is proposing severe restrictions on certain international tax deductions as well as seeking mechanisms to extract more information from foreign banks on their U.S. customers and the raising of reporting standards for overseas investments.
Currently most American-owned businesses investing overseas can delay paying federal taxes on their profits until they bring that money back to the United States. These businesses can also take tax deductions on their overseas investments. The President is proposing Congress eliminate those deductions unless the company pays its U.S. taxes on international profits. There would be an exception for research and experimentation expenses that have a spillover benefit to the U.S.
The Administration proposal would also require foreign banks dealing with American clients to sign agreements with the Internal Revenue Service to report as much information about their U.S. customers as domestic banks disclose. If not new tax laws would presume the unwilling banks are facilitating tax avoidance and have taxes withheld on payments to their customers.
The proposal also asks Congress to permanently extend the research and experimentation tax credit for domestic investments. Currently those credits are set to expire at the end of the year.
To enforce laws already on the books the president is requesting 800 more employees for the IRS to focus on international enforcement.
