In the classic children’s movie The Princess Bride, Billy Crystal plays a miracle-performing medicine man. When the hero of the story is brought to him, Crystal’s character says that he is “mostly dead.” That is an apt description of fundamental tax reform’s current state. 

The presidential campaign is in full swing, and with it comes tax policy proposals from each candidate. Both candidates have said they will help middle class families by raising taxes on the wealthy. So what are they talking about? Who is the wealthy? How would they do that? Is it true?

International tax structuring and cross border planning has always been a complex and evolving process. The massive leak at Mossack Fonseca, the Panamanian law firm responsible for setting up countless offshore companies, along with the U.S. Treasury Department’s challenge to the corporate inversion “loophole” have brought forth issues that will again challenge the status of tax havens in the global marketplace.

Under our current federal tax structure, private foundations pay a 2% excise tax on their net investment income when filing Form 990-PF.  In certain years, the 2% rate can be reduced to 1% when the foundation’s charitable distributions exceed the average distributions during a five-year averaging process. This is determined on Part V of Form 990-PF.