Per the IRS Education Provider Standards this course must be COMPLETED by 12/31/2025 to receive credits. NOTE: Go to My Professional Profile in your CCH CPELink account settings to ensure your name, and PTIN number; matches your PTIN card
This session provides an overview of income sourcing rules in the United States Internal Revenue Code and regulations. Sourcing rules are critical for non-residents, who are almost exclusively taxed by the United States on income directly sourced to the country. This program provides background on how sourcing determinations are made, including allocating income items between different income categories. The program will also cover special rules in the sourcing context — specifically, those related to multi-year compensation arrangements.
Publication Date: August 2022
Topics Covered
- Income Sourcing Rules — General Overview
- Income Sourcing — Tax Treaty Alterations
- Dividend and Interest Income Sourcing
- Sourcing of Income from Rents and Royalties
- Income from Personal Services
Learning Objectives
- Differentiate United States tax scopes for American taxpayers and nonresidents
- Recognize how income sourcing rules dictate the extent of a nonresident's United States income tax ramifications
- Recognize how income tax treaties alter the tax ramifications for nonresidents
- Identify types of income is sourced to where services are performed
- Identify types of income functionally is an overarching income inclusion of all U.S. sourced items other than capital gains and certain other limited exceptions
- Recognize what percent of portfolio interest received by nonresidents from American sources is subject to American taxation
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructor
Patrick McCormick
Patrick McCormick is an attorney with over a dozen years of experience, focusing his practice specifically on international taxation. Mr. McCormick represents both business and individual clients on all aspects of United States international tax rules, both from an income tax and estate/gift tax perspective. Having previously served as a partner at a large law firm, a midsized accounting firm, and a boutique tax law firm, Patrick’s client exposures have covered every conceivable area of American-side international tax matters. Patrick has also represented every type of taxpayer – from multibillion-dollar business enterprises and ultra-high net worth individuals to startups and individuals with complex questions but limited budgets.
Mr. McCormick has worked with clients located in over 90 countries on American tax considerations of multinational activities, cultivating specialized knowledge in every area of United States international tax rules. His explicit practice focus has facilitated an unparalleled expertise in the field; Patrick is trusted by clients and advisors around the world to obtain optimal results on international tax matters.
Mr. McCormick is a primary and prolific authority on tax matters. He has spoken on all aspects of international tax to hundreds of thousands of attendees around the globe, functioning as the primary international tax resource for many national organizations. Patrick has presented for the American Bar Association, the American Immigration Law Association, and state and local bar associations around the United States. He is a regular contributor to America’s premier tax law publications, including Tax Notes, Journal of Taxation, Tax Notes International, Law360, and Practical Tax Lawyer.
Mr. McCormick published his first treatise on international tax matters, Allocation and Apportionment Rules Under Secs. 861-865, for Thomson Reuters’ Catalyst platform, in October 2021. In late 2021, he also released a 15-hour digital course entirely dedicated to nonresident taxation, United States Tax Considerations for Nonresident Taxpayers. Mr. McCormick has been named a Super Lawyers Rising Star from 2016-2022.
Mr. McCormick counsels a range of clients from individuals to businesses with their international tax and legal needs. When counseling individual clients, Mr. McCormick assists with residency planning, asset ownership structuring, and minimization of global income tax bills for foreign-sourced income items. His business client representation includes an extensive scope of multinational transactions, including classification of foreign entities, options for structuring multinational transactions, and minimization of American anti-deferral tax mechanisms. Mr. McCormick’s specific and comprehensive practice allows him to assist clients when international factors are most relevant.