Seminar Agenda

• Background information on old Foreign Sales Corporation (FSC) legislation.
  
  

• Discussion of World Trade Organization’s successful challenge to FSCs as an illegal export subsidy, and need for replacement legislation.
  
  

• FSC Repeal and Extraterritorial Income Exclusion Act of 2000 (H.R. 4986, which became P.L. 106-519, 106th Cong., 2d Session (11/15/00), bears an 10/01/00 effective date and therefore affects 2000 income tax returns of eligible taxpayers).
  
  

• Probable WTO response.
  
  

• Transitional rules for existing FSCs.
  
  

• Expanded Benefits from new Extraterritorial Income (ETI) Exclusion provisions: Transactions and taxpayers eligible for ETI benefits; S Corporations and their shareholders, sole proprietors, and partners of partnerships may now benefit; Some foreign manufactures may now qualify; Architectural and engineering services for foreign projects qualify; Relaxation of foreign economic process requirements for those with $5 million or less of annual foreign trading gross receipts.
  
  

• Structural elements of new ETI exclusion.
  
  

• New Form 8873 used to compute ETI benefits.
  
  

• Simplified ownership structures to receive new ETI benefits mean less transaction costs.

EDWARD K. DWYER is a CPA in New Orleans, where he specializes in international taxation matters and in representing clients before the Internal Revenue Service.

Mr. Dwyer began his professional career in 1969 with the New Orleans office of the international accounting firm now known as KPMG Peat Marwick. In 1973, he became tax manager and later Director of Taxes for Ocean Drilling & Exploration Company (ODECO), where he was employed for 11 years.

In 1984, Mr. Dwyer rejoined the New Orleans office of Peat Marwick as international tax partner, where for six years he served a variety of Gulf South-based clients engaged in international operations involving oil and gas exploration and production, offshore services, exporting and other multinational pursuits, as well as foreign companies and individuals with U.S. investments.

In 1990, Mr. Dwyer opened his own international tax and business consulting practice in New Orleans. Among other civic affiliations, he serves as a member and treasurer of the Louisiana District Export Council and on the international business advisory board of Loyola University’s College of Business Administration.

Mr. Dwyer has a B.S. degree in Accounting and an M.S. degree in Taxation from the University of New Orleans. He has authored articles on such topics as foreign sales corporations, expatriate taxation, NAFTA, the U.S./Mexico double tax treaty, and the extraterritorial income exclusion provisions of the FSC replacement legislation.

A Brief FSC History

Facing the possibility of $4 billion in tariff retaliations on U.S. products by the European Union (EU), Congress and the White House have created legislation that repeals the Foreign Sales Corporation (FSC) provisions of the Internal Revenue Code. The new legislation replaces the FSC provisions with incentives similar in scope and effect, but designed to comply with World Trade Organization (WTO) rules. For U.S. companies the proposed changes are a win-win situation -- the statute provides equal treatment for all foreign sales whether the goods are manufactured in the U.S. or abroad, as long as 50 percent of the fair market value of the goods is produced within the U.S. This is a significant change from the FSC provisions, which apply only to goods made in the U.S. exported by American companies and not to goods made and sold overseas by U.S. firms. The changes to the FSC provisions aim to bring the U.S. into compliance with WTO requirements and to benefit U.S. companies.

Sponsoring Organizations

International Law Committee of the New Orleans Bar Association
International Law Section of the Louisiana State Bar Association
Louisiana Department of Economic Development
Louisiana District Export Council
Bank One International Corporation
Fowler Rodriguez
Transoceanic Shipping Company, Inc.
World Trade Center of New Orleans

Advance registration required by February 13, 10:00 a.m. 
Registration Fee: $25 for members of the sponsoring organizations and $30 for non-members. If you are a WTC member, the registration fee can be charged to your account number noted on the registration form.