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On Aug. 10, 1999, the IRS issued Final and Temporary Regulations dealing with foreign gifts and with inbound grantor trusts (Treasury Division 8831).
The new regulations simplify the prior proposal and provide new exceptions for reporting purported gifts from a foreign corporation or partnership. Transfers from foreign corporations and partnerships to U.S. charities, and transfers reflecting gifts to individuals which do not exceed $10,000, are still excluded, while other exceptions have been added.
The reporting rules for "intermediaries" were intended to prevent taxpayer abuses such as the following example, taken from the regulations:
Assume a …