Important Insights on forms K2 and K3

Mr. Andreozzi’s legal career has focused on resolution of complex tax controversy matters, large case (corporate) tax matters, tax shelter litigation, employee welfare benefit litigation, and international/territorial tax issues.

For 16 years, Mr. Andreozzi worked for the IRS Office of Chief Counsel, where he served as Industry Counsel for the Commissioner’s Industry Specialization Program (ISP). He evaluated and litigated tax cases presenting Welfare Benefit Plan issues. Mr. Andreozzi litigated many seminal cases in this area, including General Signal Corp. v. Commissioner, Booth v. Commissioner, Parker Hannifin Corporation v. Commissioner, Square D Co. v. Commissioner and Neonatology Associates v. Commissioner. He also assisted and counseled other IRS attorneys and revenue agents in their development of cases under the ISP program, offering valuable expertise in areas involving tax shelters and the corporate income tax consequences of VEBAs and Welfare Benefit Plans.

During his years with the IRS Chief Counsel’s office, Mr. Andreozzi cultivated a strong reputation with attorneys and agents throughout IRS, as well as with outside tax practitioners nationwide. His extensive trial experience extends to other complex tax areas as well. Mr. Andreozzi tried a variety of complex precedential cases that have established important precedent in the areas of abusive tax shelters, corporate acquisitions (INDOPCO v. Commissioner), international taxation, United States Virgin Islands territorial taxation, and TEFRA partnerships.

Now in private practice with the firm of Andreozzi Bluestein LLP, Mr. Andreozzi continues to focus his practice on complex tax litigation and tax controversy resolution. His practice areas include international taxation and foreign bank account reporting, criminal tax and financial crime defense, employee benefit taxation, tax shelter litigation, and a variety emerging areas of federal and state tax law.

Mr. Andreozzi has published numerous articles on taxation, and frequently lectures on a variety of current and developing tax issues. He is an Adjunct Professor at the State University of New York (SUNY) at Buffalo School of Management, where he teaches Business Law at both the graduate and undergraduate levels. While he was with the IRS Office of Chief Counsel, he trained Chief Counsel trial attorneys at national litigation schools.

Richard Blumenthal has extensive experience in international and domestic taxes, having spent a 35+ year career with the IRS.  His background includes positions throughout many areas of the IRS including Large Business & International (LB&I), Small Business Self Employment, and the IRS Abusive Transactions group. Richard has extensive experience in resolving domestic and foreign corporate, partnership, individual tax and penalty cases at the field, manager and territory manager levels.

During his career, Richard was responsible for developing the IRS’s international foreign owned business compliance strategy, which included implementation of international inbound campaigns, field technical support and compliance with the 2017 Tax Reform Job Act (TCJA).  Richard developed various IRS enforcement campaigns by data analysis to identify compliance issues on forms 1120F, 1120, 1040NR and partnership Form 1065.  The campaigns included 1120F Non-Filer & Protective return, 1120F Delinquent Return, and Financial Entities involved in Lending Activities.  Richard lead the classification and audit guides for these campaigns, which included procedures on handling delinquent Form 1120-F and requests for waiver of disallowance of expenses on delinquent F 1120-F.

Richard’s TCJA compliance included development of forms and instructions for the base erosion, sale of partnership interest by foreign partners, and business interest expenses limitation. The form development included the foreign partner sections of the new Form 1065 K-2, K-3 Partner’s share of Income, Deductions, Credits.  Richard also modified the Form 1099S and 1099 Dividend to increase the identification of foreign investors selling U.S. real property subject to FIRPTA.

Richard’s experience also included the resolution of multiple transfer pricing issues in the areas of cost sharing, Subpart F, multinational corporations, and high wealth individuals. He recently led the LB&I field examination team in a precedent-setting case involving the assessment of § 956 income on a controlled foreign corporation ‘s guarantee of a US shareholder loan on its earning and profits, with the Tax Court and the Third Circuit sustaining the IRS assessment on the complex investment firm.  (SIH Partners LLP v. Comm. 150 TC NO 3, 3d Cir 2019).

Richard also participated as a member of the faculty cadre in various offshore abusive tax avoidance transaction training courses.  He has extensive experience with penalty and tax resolution in the area of  international information returns on Forms 5471, 5472, and 8833 as well as the significant issue of management approval for examination penalties.  He was a successful expert witness on a FIRPTA and treaty shopping case in Bota NV v. Comm. NO 1842 -88, and assisted the U.S. Department of Justice in the conviction of an offshore treasury bill shelter.