1. On November 1st a second set of proposed US estate tax legislation was introduced. This latest one would increase the "applicable exclusion amount" (exemption) to $3.5 million for deaths after December 31, 2007. (The other proposed legislation we mentioned in September would increase the "applicable exclusion amount" to $5 million for deaths after December 31, 2009). Nonresident aliens who are resident in Canada are entitled to a proportion of this exemption. The latest proposal was introduced jointly by a Democrat and a Republican.
   
   
2. The IRS has issued new regulations with regard to corporate estimated (installment) tax payments that are required during the fiscal year. Among other rules, non-US corporations that file a US income tax return (including one in respect of the rental or sale of US real estate) must make estimated tax payments during the fiscal year if there is a tax liability. An exception may apply for a taxable year of less than 4 calendar months, or when the tax is less than $500. (Reg. 1.6655-5). These tax payments must be made even when a tax return was not required for the prior year, and also when a tax return was filed for the prior year but there was no tax liability. (TD 9347, REG-107722-00).
   
   
3. The IRS has issued proposed regulations with respect to the cross-order allocation of "services" income. Examples are provided for the following taxpayers performing temporarily in the US: musical groups, members of professional sports teams playing both within and without the US, individuals making presentations in the US, and individuals performing at a specific athletic event n the US (NPRM REG-114125-07; Proposed Reg. 1.861-4(b)(2(ii)(g)).