New Fast-Track Request Processing for Letter Rulings regarding Corporate Reorganizations and Tax-Free Spin-Offs

The new Revenue Procedure 2022-10, released by the IRS on January 14, 2022, has established an 18-month pilot program that allows for fast-track processing of certain requests for private letter rulings. The program is expected to expire on July 14, 2023, or on any earlier date on which a superseding revenue procedure is released. 

The pilot program allows taxpayers to obtain a ruling from the IRS within 12 weeks, i.e. roughly 4 months, decreasing the current awaiting time of at least 6 months. More specifically, taxpayers are allowed to request the fast-track processing to conclude before 12 weeks if they set forth the actual business need for such request within that specified period and address any matters that could impact the feasibility of fast-track processing. However, additional scrutiny should be expected if a shorter time is requested.  

Revenue Procedure 2022-10 sets out that taxpayers should address their business needs by demonstrating that (1) there is a business exigency outside the taxpayer’s control, (2) there will be adverse consequences to the taxpayer or other persons if the IRS does not issue the requested letter ruling by the specified period and (iii) that the request was submitted as promptly as possible after becoming aware of the circumstances.

The revenue procedure limits the pilot program to letter rulings solely or primarily under the jurisdiction of the Associate Chief Counsel (Corporate). Therefore, ideally, the tax issues to be addressed should be limited to corporations. However, if there are issues involving non-corporate entities, additional requirements will be needed to qualify. Thus, taxpayers engaging in corporate reorganizations and tax-free spin-offs are most likely to benefit from the fast-track processing brought by Revenue Procedure 2022-10. 

Some of the requirements taxpayers will have to comply with includes providing a draft ruling and sending additional information requested by the IRS within 7 days. The 7-day deadline begins on the next business day after the day the request for information is made. In any case, the business needs for the fast-track processing request must be sufficiently demonstrated. 

It should be noted that the IRS has the discretion to decline and delay taxpayer requests. It can also approve a lengthier processing time than originally requested. In case of denial by the IRS, the ruling will still be assessed but the 12-week time frame will be disregarded. 

If the request for fast-track processing is denied, the taxpayer is allowed to address that determination in writing, discuss that determination with the IRS branch reviewer, or both. In case the IRS branch reviewer continues to determine that the request for fast-track processing should be denied, taxpayer has no right of appeal. 

Written by Roberto P. Vasconcellos, Senior Tax Consultant at Drummond Advisors. 


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The Importance of English as a Second Language

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Renowned institutions such as Harvard University emphasize the importance of English proficiency for professionals working in multinational corporations, international organizations, and global markets. Harvard’s Division of Continuing Education highlights that “English is the language of international business and trade, making it essential for professionals to communicate across borders”. 2. Access to Knowledge and Resources The majority of the world’s academic papers, research, and professional literature are published in English. For professionals in fields such as science, technology, medicine, and finance, proficiency in English enables access to the latest research findings, technical manuals, and industry reports. This access is critical for staying current with advancements and maintaining a competitive edge. The University of Cambridge notes that “English is the dominant language of the internet and of the world’s leading scientific journals”. Thus, professionals with strong English skills can access key information that is not readily available in other languages. 3. Career Advancement and Opportunities Employers across the globe prioritize candidates who can demonstrate strong English communication skills. According to a report by EF Education First, companies often see English proficiency as a key factor in hiring, promotions, and international assignments. The report states that “employees with good English are often better positioned for leadership roles and are more likely to be selected for international projects and business trips”. Universities like Oxford emphasize that “the ability to speak English can lead to higher salaries and better job positions, as many employers value bilingual employees who can navigate different markets and cultures”. 4. Cultural Competence and Diversity Understanding and communicating in English also increases cultural competence and the ability to work in diverse teams. English often acts as a bridge that connects people from various cultures, helping the development of healthy team dynamics. This cultural competence is particularly important in professions that require collaboration across different countries and cultures. Stanford University highlights that “professionals who are proficient in English are better equipped to understand and respect cultural differences, which is essential in today’s multicultural work environment”. 5. Innovation and Creativity English proficiency can also drive innovation and creativity within organizations. When professionals from different parts of the world can communicate effectively, they can share ideas, challenge each other’s thinking, and collaborate on innovative solutions. The ability to share one’s ideas clearly and constructively is vital for fostering a culture of creativity and continuous improvement. MIT Sloan School of Management notes that “global teams that communicate in a common language like English are more likely to engage in creative problem-solving and innovation”. In summary, the importance of English as a second language in a professional setting cannot be overstated. From enhancing global communication and access to knowledge to improving career prospects and fostering innovation, English proficiency is a crucial skill for today’s professionals. Renowned universities and educational institutions universally acknowledge the benefits of English in advancing one’s career and facilitating international collaboration. As the world continues to become more interconnected, the ability to communicate in English will remain a key driver of professional success and personal growth. By understanding and embracing the significance of English in the professional world, individuals can unlock new opportunities, enhance their career prospects, and contribute meaningfully to the global community. If you want to start learning or even improve your English Level, you can visit Written by Campus Live References: 1. Harvard University, Division of Continuing Education. (n.d.). “The Importance of English in International Business.” 2. University of Cambridge. (n.d.). “English as a Global Language.” 3. EF Education First. (2023). “EF English Proficiency Index.” 4. University of Oxford. (n.d.). “Benefits of English Proficiency.” 5. Stanford University. (n.d.). “Cultural Competence and Communication.” 6. MIT Sloan School of Management. (n.d.). “Innovation through Multilingual Communication.”

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The Permeation of English in Brazilian Business

In recent years, English has increasingly become a pivotal element in the Brazilian business landscape. As globalization accelerates and Brazil strengthens its position in the international market, English proficiency has emerged as a crucial skill for professionals across various industries. This article explores how English has permeated Brazilian business and the benefits it brings to companies and individuals alike. 1. Global Market Access Brazilian companies are expanding their reach beyond national borders, engaging in trade, partnerships, and investments worldwide. English serves as the bridge language in these international dealings. According to the Brazilian National Confederation of Industry (CNI), proficiency in English is essential for companies aiming to compete globally. It allows Brazilian businesses to effectively communicate with foreign partners, negotiate contracts, and understand international market trends. 2. Enhancing Professional Opportunities For Brazilian professionals, English opens doors to a wealth of career opportunities. A study by the British Council in Brazil indicates that individuals with strong English skills have higher employability and can access better job positions and salaries. Many multinational corporations operating in Brazil prioritize hiring bilingual employees who can navigate both local and international contexts. 3. Access to Knowledge and Innovation English is the predominant language of global research and development. Brazilian professionals proficient in English can access cutting-edge research, technological advancements, and industry best practices that are often published in English. This access is crucial for fostering innovation and maintaining competitiveness in the global market. The São Paulo Research Foundation (FAPESP) emphasizes that English proficiency is vital for participating in international conferences, publishing research, and collaborating on global projects. 4. Cultural Exchange and Diversity English proficiency also facilitates cultural exchange and enhances the ability to work in diverse environments. As Brazil hosts and participates in numerous international events, such as the Olympic Games and the World Cup, English allows for smoother interactions and richer cultural experiences. This cultural competence is beneficial in fostering a more inclusive and dynamic business environment. The permeation of English in Brazilian business is a testament to the country’s integration into the global economy. As Brazilian companies and professionals continue to embrace English, they unlock new opportunities, drive innovation, and enhance their competitive edge on the world stage. By investing in English language education and training, Brazil is poised to further solidify its role as a key player in the international business community. Through the mastery of English, Brazilian businesses and professionals can look forward to a future of expanded horizons and greater success in the global marketplace. To start or improve your English learning process, visit Written by Campus Live References: 1. Brazilian National Confederation of Industry (CNI). (n.d.). “The Importance of English for International Business.” 2. British Council Brazil. (n.d.). “English Language Skills and Employability.” 3. São Paulo Research Foundation (FAPESP). (n.d.). “Global Research and Collaboration.”

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The importance of internal regulations for the company’s legal certainty

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Who must file income tax returns in Brazil in 2024?

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Bank accounts and financial investments outside the US must be declared: get to know FBAR

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Payroll in the US: frequency of salary payments

Payment frequencies in the US (Payroll Schedule or Payroll Frequency) vary and directly influence the financial management of companies and the financial stability of employees. Main frequencies are: Quarterly – every 3 months; The U.S. Department of Labor (DOL) establishes some guidelines on payment frequencies. However, specific regulations may vary from state to state. For example, in Florida, state laws may influence the frequency of pay, with some requirements specific to certain industries or types of work. Generally, WEEKLY and BIWEEKLY pay frequencies are more common for operational positions. Turnover is higher and frequent pay can be an incentive in these cases. The SEMIMONTHLY, MONTHLY and QUARTERLY frequencies are more common in management positions or higher salaries, providing a different financial vision and more strategic planning. Frequency and date of Payroll in the USA The date of payment is also determined by the company, always following state laws and regulations. Employees need to know the established frequency of their pay already on admission – which can be changed with everyone’s consent and agreement. The variation usually happens in the MONTHLY and SEMIMONTHLY frequencies, as the payment date may not fall on a business day, and the recommendation is to advance the date to the nearest business day. Determining the Payout Frequency for a business is not a simple decision. It involves financial, legal, and even cultural considerations. It takes into account the company’s financial health, compliance with local regulations, employee needs and even administrative efficiency. Understanding these frequencies is crucial for businesses and employees as it directly impacts cash flow, personal financial planning, and even talent retention. State Payday Requirements – Written by Adriano Nogueira, Personal Department Analyst at Drummond Advisors

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Estimated Taxes for Individuals

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The STJ rules on the taxation of the PLR of company directors and managers

The Superior Court of Justice (STJ) has ruled for the first time on a case that could have a major impact on the taxation of the PLR of company directors and managers in the country. Profit Sharing (PLR) is a financial incentive program used by many companies as a way of rewarding their employees based on the company’s performance and financial results. It is a benefit that aims to motivate employees to dedicate themselves to the success of the organization, since they share in the profits or positive results achieved. However, the taxation of PLR, especially when it comes to directors and managers, has been a controversial issue in Brazilian courts. Questions such as whether or not PLR should be taxed and what the criteria for taxation are have been a source of uncertainty for companies. STJ ruling on the taxation of directors’ and officers’ PLR The STJ has ruled for the first time on the issue of the taxation of directors’ and officers’ PLR. Justice Sérgio Kukina, the rapporteur of the case, voted against the taxation of private pension payments, but in favor of PLR. Justice Gurgel de Faria then asked to be heard in order to make a more in-depth analysis of the issue, due to the novelty of the case. He will now have 90 days to return the case. Three other ministers will also be able to vote. The STJ ruling is an important milestone in Brazilian tax law. The court’s decision will provide guidelines on an issue that has been the subject of discussion and litigation for a long time. Written by Marcos Ferreira, Content Assistant at Drummond Advisors Read also:

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“Grandchildren’s Law” makes it easier to obtain Spanish Citizenship

The Democratic Memorial Law, also known as the ” Grandchildren’s Law”, is a new Spanish legislation that facilitates the access to recognize the Spanish citizenship for a certain period, which ends on 10/21/2024 (with the possibility of extension until 10/21/2025). The current Spanish Citizenship Law, enforced since 2007, only allowed the sons and daughters of Spaniards, as well as grandchildren below 18 years old, to apply for recognition of Spanish citizenship, which made it impossible for grandchildren who were of legal age, or with deceased parents who had not become Spaniards, to have their own Spanish citizenship recognized. With the Democratic Memorial Law, named so because it aims to benefit relatives of victims of the Spanish Civil War and the Francoist Dictatorship, grandchildren of legal age are now allowed to have their citizenship recognized, even if their parents, already deceased, have not obtained such recognition. In this way, thousands of grandchildren of Spaniards, now have the possibility of recognition of citizenship. Nevertheless, the Law provides for another important benefit: If any person has citizenship recognized by this Law, their adult children may also apply for recognition of citizenship, which also allows thousands of Spaniards descendants be recognized as Spanish citizens. Finally, another important change is that the Law now allows the children of Spanish women who married before 08/29/1978 to obtain recognition of citizenship, which was not allowed previously. This is because before this date, Spanish women who married foreigners lost their nationality, preventing them from passing it on to their children. In this sense, many children of Spanish women will also be able to apply for citizenship. But beware: the deadline for applications for recognition to be made is October 21st, 2024. Are you interested in recognizing your Spanish Citizenship and enjoying the benefits of a European Passport? Contact our Global Mobility team at Drummond Advisors! Written by Eduardo Giugliano, Associate at Drummond Advisors

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The Regulation of Virtual Assets in Brazil: Everything You Need to Know About Cryptocurrency Trading in the Country

In December of 2022, the Brazilian Federal Law No 14.478/2022 entered into force to establish a regulation on virtual assets, such as cryptocurrency, in Brazil. The cryptocurrency matter was unregulated in Brazil until the Brazilian Federal Law No 14.478 was established, which has left investors and crypto exchange companies uncertain of the provisions that should be taken into consideration to trade digital assets in the country in the past. The Brazilian Federal Law No 14.478, also known as Cryptocurrency Legal Milestone (in Portuguese, Marco Legal das Criptomoedas), establishes some definitions for important terms regarding the cryptocurrency matter, the principles that should be observed by virtual assets service providers (the term used by the law to refer to crypto exchange companies) and the activities that the regulating competent governmental organization will be responsible for. Here are some important provisions of the Law that you should know: Also, the Cryptocurrency Legal Milestone expressly establishes that its provisions are not applicable to virtual assets that can be defined as securities, according to the definition provided by the Brazilian Securities Commission. Also, in June of 2023, the Brazilian Federal Decree No 11.563/2023 entered into force to determine that the competent governmental organization responsible for regulating and supervising cryptocurrency trading in Brazil will be the Central Bank of Brazil (in Portuguese, Banco Central do Brasil). Since then, the Central Bank of Brazil has been working on drafting and publishing an official regulation on virtual assets trading but, until the date of publication of this newsletter, this regulation has not yet been published. This does not mean that other Brazilian governmental organizations could not be involved in cryptocurrency operations in any way. The Cryptocurrency Legal Milestone expressly indicates that the Brazilian Securities Commission (in Portuguese, Comissão de Valores Mobiliários – CVM) will be responsible to regulate every transaction that involves virtual assets that can be defined as securities (in Portuguese, valores mobiliários). The Brazilian Securities Commission has already published, in October of 2022, an Orientation document (in Portuguese, the Parecer de Orientação CVM n° 40) with some recommendations for exchange crypto companies that want to trade crypto as securities in Brazil. Also, the Cryptocurrency Legal Milestone defines that the Brazilian Consumer’s Defense Code (in Portuguese, Código de Defesa do Consumidor) will be applicable to the relationship between virtual assets service providers and its clients, which means that the governmental organization Consumer’s Protection and Defense Program (in Portuguese, Programa de Proteção e Defesa do Consumidor – Procon) can also be involved in virtual assets operations, to mediate conflicts between the virtual assets service providers and its clients. The Cryptocurrency Legal Milestone and the Decree No 11.563/2023 were a big step into the regulation of virtual assets trading in Brazil, but this matter is yet to be complemented by the Brazilian Central Bank’s regulation, which has not yet been published, and which will determine the rules and provisions that virtual assets service providers should follow to get an authorization to act as a virtual assets service provider in Brazil. Written by Mariana Tavares and Mariana Belisario

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Tax Reform on consumption in Brazil 

On December 21, 2023, Constitutional Amendment n. 132 was published, which amends the tax system on consumption in Brazil.  The main change consists of replacing the taxes currently levied on consumption (PIS/COFINS/IPI/ICMS/ISS) with a Dual Value Added Tax (VAT) levied on goods and services and a Selective Tax (IS). Main features of VAT Dual:  Selective Tax  Cash back  Special Tax Regimes  Manaus Free Zone   Simples Nacional (SN)  Particularities regarding ICMS  Validated ICMS Benefits   Credit balances  Transition to the new model   Taxation of Income and Assets  Drummond Advisors is available to assist in the assessment of potential impacts arising from the consumption tax reform in Brazil. 

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