(PLEASE NOTE THREE DIFFRENT ANSWERS POSTED CHOOSE ONE)
1) "Foreign Tax Credits" Please respond to the following:
• Your client is a U.S.-based company that owns a foreign subsidiary. Your client understands that there are foreign tax credits of which they may be able to take advantage. Based on the e-Activity, recommend a strategy to optimize the use of foreign tax credits.
• You are an IRS auditor and are auditing the foreign tax credits taken by a taxpayer in order to determine if there was any abuse of the foreign tax credits taken. Suggest the most likely abuse of foreign tax credits and measures that the IRS can take to minimize lost revenue resulting from abuse.
2) "Tax Exemptions" Please respond to the following:
• You are a CPA and a client has asked you to advise them on how to exclude U.S. income tax on money earned while he was working in a foreign country. Recommend a strategy to your client that will minimize the U.S. tax obligations. Support your recommendation with examples.
• Based on the discussion above, create an argument to eliminate any type of tax exemptions for U.S. taxpayers working abroad. Support your argument with examples