Winter 2016 | Partnering Perspectives
About the Author: With a career that spans both government and
private practice, Eversheds Sutherland Partner Carol Tello helps
multinational companies and individuals navigate the complex
and rigorous realm of international taxation. Her practice includes
a broad range of cross-border tax planning and Internal Revenue
Service (IRS) controversy matters, including compliance with the
Foreign Account Tax Compliance Act (FATCA). Carol brings
experience in cross-border restructuring transactions, inbound
corporate transactions, withholding matters and treaty
interpretation issues, as well as cross-border taxation of corporate
executives and the US taxation of non-US citizens. She also
advises clients on tax issues involving intellectual property
transactions. She can be reached at caroltello@eversheds-
In addition to tax disclosures, many jurisdictions require
collecting beneficial ownership information for corporations.
A beneficial owner is an individual who enjoys the economic
benefit of the legal ownership of an asset such as a security,
stock, or other type of ownership interest in an entity. Without
beneficial ownership information, an individual can hide behind
an entity through various means.
The United States lags behind other jurisdictions in requiring
such information and is frequently cited as a “tax haven” because
information about owners of US corporations and other entities
is not collected. The IRS recently finalized regulations that
require reporting on the owner of a foreign-owned US entity
that under US tax law is treated as “disregarded” because the US
entity has only one owner. An example would be a single
member limited liability company.
In addition to the new US foreign owner disclosure for tax
purposes, the US finalized regulations in the Spring of 2016
that imposed on financial institutions the collection of beneficial
owner information for use by law enforcement.
Compliance with these disclosure and reporting requirements
is important because of the penalties that may be imposed in
cases of non-compliance. As a result, compliance has become
a very important aspect of the tax department of corporations
and has become a risk management exercise.
Increased disclosure and reporting for tax and other purposes
is only going to increase in future years. Pressure from nongovernmental organizations (NGOs) for even more public
disclosure is intense in Europe and is starting to be felt in the