A Taxing Problem for Expatriate Employees Purpose: The purpose of this exercise is to give you practice

Question:

A Taxing Problem for Expatriate Employees Purpose: The purpose of this exercise is to give you practice identifying and analyzing some of the factors that influence expatriates pay.

Required Understanding: You should be thoroughly familiar with this chapter and with the Web site www.irs.gov.

How to Set Up the Exercise/Instructions:

Divide the class into teams of four or five students. Each team member should read the following:One of the trickiest aspects of calculating expatriates pay relates to the question of the expatriate s U.S. federal income tax liabilities. Go to the Internal Revenue Service s Web site, www.irs.gov. Scroll down to Individuals, and go to Overseas Taxpayers. Your team is the expatriate-employee compensation task force for your company, and your firm is about to send several managers and engineers to Japan, England, and Hong Kong.What information did you find on the site that will help your team formulate expat tax and compensation policies? Based on that, what are the three most important things your firm should keep in mind in formulating a compensation policy for the employees you re about to send to Japan, England, and Hong Kong?

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