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What we do

Overview

Ruchelman P.L.L.C. provides a wide range of tax planning and legal services for foreign companies operating in the U.S., foreign financial institutions operating in the U.S. through branches, and U.S. companies and financial institutions operating abroad.

The core practice of the firm involves tax planning for cross-border transactions. This involves corporate tax advice under Subchapter C of the Internal Revenue Code, advice on transfer pricing matters, and representation before the I.R.S.

The private client group of the firm advises clients on matters related to domestic and international estate planning, charitable planned giving, trust and estate administration, and executive compensation.

The tax practice is supported by the corporate group, which provides legal representation in mergers, licenses, asset acquisitions, corporate reorganizations, acquisition of real property, and estate and trust matters. The firm advises corporate tax departments on management issues arising under the Sarbanes-Oxley Act.

The members of Ruchelman P.L.L.C. actively participate in professional organizations related to the core practice of the Firm. These organizations include the American Bar Association Section on Taxation, the International Fiscal Association, the Society of Trust and Estate Practitioners, the Canadian Bar Association, the International Tax Institute, the New York State Bar Association, the American College of Trust & Estate Counsel, the American Law Institute - American Bar Association, and the American College of Tax Counsel. The Firm is a member of the International Tax Specialist Group and Geneva Group International.

Ruchelman P.L.L.C. maintains offices in New York and Toronto. The practice of the Toronto Office is limited to U.S. law.

Cross Border Transactions

Cross Border Transactions entail transfers of property, stock or financial and commercial obligations between related entities in different tax jurisdictions.

Examples include:

The firm practice emphasizes utilization of favorable tax attributes resulting from these transactions.

Representative Engagements—Cross-border Transactions
Client Profile
Tax Service Provided
  • Italian multinational food service company with European and U.S. operations
  • Analyzed proposed intercompany credit facility; advised on its qualification as debt under U.S. law; evaluated effect of associated interest rate hedges
  • Middle Eastern Investment Fund
  • Advised on structures for U.S. real estate investment utilizing debt, equity, and service fees; quantified U.S. tax issues related to IP fund in U.S.
  • U.K. based media conglomerate/Sweden based multinational
  • Obtained favorable L.O.B. rulings allowing benefits under intermediary treaty for royalties/dividends
  • Canada based manufacturer of household products
  • Created “mixer company” L.L.C., allowing low-tax Asian profits to be “resourced” to the U.S. for home country foreign tax credit without U.S. tax increase

Transfer Pricing Matters

Controlled transactions are subject to arms-length pricing and related documentation standards in the U.S. and other countries. Several methods can be applied to measure whether transactions have been carried out at arm’s length and the methods do not always produce consistent results. The U.S. “best method” standard requires consideration of all possible pricing methods, the identification of the best method in the circumstances, and an explanation for discarding other methods.

The firm practice focuses on defining the proper relationship between controlled parties from both transfer pricing and business planning perspectives, taking into account transfer pricing rules in the U.S. and O.E.C.D. guidelines applied abroad.

Representative Engagements—Transfer Pricing Matters
Client Profile
Tax Service Provided
  • U.S. multinational protective garment manufacturer
  • Conducted review of existing pricing studies and established current policy addressing changes in manufacturing operations
  • U.S. multinational sporting goods distributor
  • Conducted initial transfer pricing study to align with international business expansion, integrating
    business model and tax plan
  • U.S. based manufacturer of wiring devices
  • Created structure to eliminate U.S. transfer pricing risk, facilitate compliance with foreign rules, and enhance foreign tax credit utilization
  • U.K. based jewelry distributor
  • Supported structure that insulated foreign supplier from U.S. tax and limited the margin of a distribution subsidiary to fee of a commission agent

Real Property Issues

There are international tax issues unique to the holding of real property interests including application of the Foreign Investment in Real Property Tax Act (FIRPTA), trade of business and related Effectively Connected Income (ECI), buy versus lease considerations, and financing issues.

There are local tax issues unique to the holding of real property interests including transfer taxes that require local law knowledge.

The firm practice considers all these areas in planning for investment in U. S. real estate.

Representative Engagements—Real Property Issues
Client Profile
Tax Service Provided
  • Spain based multinational design firm
  • Advised on buying-versus-leasing
    proposed NYC office addressing
    international, federal, state, and
    local tax issues
  • Foreign nationals
  • Planned for investment in U.S. real estate through foreign trust to
    obtain the lower rates of tax on capital gains for individuals with
    limited U.S. estate tax exposure
    for investor
 
Corporate Service Provided
 
  • Structured US ownership of real estate holdings; coordinated purchase and management of property

I.R.S. Representation

I.R.S. representation entails knowledge of I.R.S. practice and procedure at the administrative level. The firm represents taxpayers from the commencement of the audit process through the level of appeals within the I.R.S.

The practice is consistent with Circular 230 requirements in general and with respect to listed transactions.

Representative Engagements—I.R.S. Representation
Client Profile
Tax Service Provided
  • Sweden based Pharmaceutical company
  • Defended two-pronged I.R.S. attack — transfer prices charged by parent and parent’s exposure to U.S. tax by reason of P.E. in U.S.
  • Norway based cheese company
  • Defended proposed disallowance of brand promotion expense by U.S. super-distributor
  • U.S. exporter of used aircraft parts
  • Defended status of DISC against assertion that tests were not met
  • Foreign nationals holding green cards
  • Used applicable tax treaty to avoid U.S. resident status; defended State assertion of State residence notwithstanding foreign residence under tax treaty; defended estate tax assertion that deceased holder of green card was domiciled in U.S.

Mergers & Acquisitions

Mergers and acquisition transactions present numerous tax planning and compliance issues from the due diligence analysis through to implementation of specific tax strategies and assimilation of the target group into the acquiring group.

The firm practice handles all aspects of the mergers and acquisition process from the tax and corporate perspective including due diligence reports (tax and corporate), acquisition structuring, negotiating and drafting transaction documents, post acquisition planning.

These aspects are handled both from the buyer and seller perspective.

Representative Engagements—Mergers & Acquisitions
Client Profile
Tax Service Provided
  • U.S. multinational consumer products company
  • Advised on proposed acquisition of European target focusing on use of existing cash and favorable tax treaty structuring
  • Canadian multinational telecommunications group
  • Advised on a “bootstrap” acquisition utilizing cash of target group to fund purchase price and avoid dividend withholding tax
Client Profile
Corporate Service Provided
  • Turkish agricultural manufacturing company
  • Assisted with all corporate aspects with respect to acquisition of US agricultural engineering company
  • New Zealand industrial engineering company
  • Advised on US ownership in connection with joint venture
  • Russian multi-national energy company
  • Advised on governance issues with respect to JV ownership of Kazakhstan energy assets

Corporate Tax Management

Increased corporate governance requirements mean that tax advisors must tailor the quality of their advice to the client’s ability to implement and the scope of the client’s corporate governance practices and procedures.

The firm practice incorporates a general approach to tax advice that addresses corporate governance concerns.

The firm helps the tax departments of its corporate clients establish policies and procedures to address international tax compliance obligations and the need to document business purposes and actual transactions.

Representative Engagements—Corporate Tax Management
Client Profile
Tax Service Provided
  • U.S. multinational industrial manufacturer
  • Established international tax planning, compliance, and accounting procedures to operate within existing financial reporting system
  • U.S. multinational sporting goods distributor
  • Established international tax reporting system for foreign subsidiaries, focusing on proper reporting of intercompany transactions

Corporate Reorganizations

Corporate reorganizations can take the form of transfers of assets for stock or stock for stock. In some cases, the transaction includes receipt of other “boot consideration”.

The firm practice concentrates on the maximization of the tax-free or tax-deferred consequences of the transaction and the proper alignment of tax attributes (earnings and profit accounts, carryover or stepped up tax bases) to the appropriate parties.

Representative Engagements—Corporate Reorganizations
Client Profile
Tax Service Provided
  • Acquisition of privately held foreign-owned U.S. manufacturer of medical devices
  • Advised target on method to dispose of business in an entirely tax-free method in a transaction involving cash and stock; planned for the elimination of withholding tax on interest element of deferred payment
  • Creation of U.S. owned web-based business located outside the U.S.
  • Advised on business model that was not subject to Section 367(e) transfer of IP or Subpart F Income inclusion for U.S. investors; advised on structure resulting in 15% tax for U.S. individuals
  • Canada based manufacturer of a consumer product
  • Revised existing structure to eliminate double withholding tax resulting from ownership of Canadian operating company by a first-tier holding company; utilized “estate-freeze” concepts to avoid double withholding tax on crossborder dividend flows
  • France based manufacturer of a food product
  • Revised ownership of U.S. subsidiary in a transaction that resulted in a tax-free, step-up in basis of shares that were ultimately sold by U.S. transferee

Private Client Advice

Globalization affects more than multinational enterprises. Private clients frequently have family members spread around the world. Local tax laws can affect giving patterns through structures involving trusts and holding companies.

The firm practice emphasizes efficient use of structures and giving patterns to reduce adverse tax consequences for donors and beneficiaries.

Representative Engagements—Private Client Advice
Client Profile
Tax Service Provided
  • Canadian family with dual citizen spouse and children
  • Designed cross-border estate plan and prepared Wills and US trust agreements to implement plan
  • Offshore trusts with U.S. citizen and resident beneficiaries
  • Counseled on elimination of phantom income problems arising from foreign corporate holdings; assisted in managing accumulated income issues; prepared U.S. elections and beneficiary returns and forms
  • Asian estate with European trusts, foreign holding companies and US assets and beneficiaries
  • Analyzed US income and estate tax issues; prepared non-resident returns and elections; prepared subsidiary US trusts and counseled on decanting and administration of offshore trusts to manage foreign trust and foreign corporation anti-deferral problems
  • Canadian individuals acquiring U.S. real property
  • Analyzed alternative vehicles to acquire property and minimize US estate and income taxes; prepared appropriate trust agreements and counseled on administration

This web site is not intended to be legal advice. Contacting the firm or reading the materials on the site does not create an attorney-client relationship. No confidential information should be sent over the internet. Past results do not predict future outcomes. The outcome of each case stands on its own merits.