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I.R.S. Advises Scrutiny Required for Partner’s Foreign Earned Income

Volume 3 No 8    /    Read Article

By Elizabeth V. Zanet

A partner of a U.S. law firm formed as an L.L.P. may lose expat tax benefits when he is assigned to an office outside the U.S. The foreign earned income exclusion and the foreign tax credit limitation may not apply to the partner’s full share of partnership profits. Elizabeth V. Zanet examines an International Practice Unit (“I.P.U.”) published by the I.R.S., which cautions that the U.S. tax treatment of income differs: favorable treatment for guaranteed payments and unfavorable treatment for distributive shares of total profits.    See more →