An Interest Charge Domestic International Sales Corporation, or IC-DISC, provides a permanent tax savings opportunity for qualifying U.S. exporters. An IC-DISC is not a tax shelter. It’s an incentive specifically provided by the tax code that allows U.S. exporters to increase their ability to compete globally by reducing U.S. tax liabilities. It is a statutory entity designed solely for the purpose of realizing export tax savings.
How DOes an IC-Disc Work?
An IC-DISC creates permanent tax savings by transferring income from the exporter to the tax exempt IC-DISC through an export sales commission. The IC-DISC commission payment reduces the exporter’s taxable income, thus reducing tax liability by the marginal tax rate of the commission amount. An IC-DISC commission is taxed at the qualified dividends rate only when distributed to shareholders as dividends. The transfer of income to the IC-DISC creates a permanent tax rate arbitrage on the export sales commission of 15 to 18 percent.
for shareholders or businesses.
Create management and employee incentives
for IC-DISC shareholders.
Eliminate double taxation
for C-Corporations and defer taxes.
Supply ongoing financing to reduce cost of capital.
An IC-DISC is not required to distribute all commission income to shareholders. In some cases, income can be loaned back to the exporter creating tax deferment and working capital.
Create a tax-advantaged vehicle for succession or estate planning.
Income can be transferred to the IC-DISC tax free and then distributed in a tax-advantaged manner to shareholders.The distribution can provide funding for buyouts, or create a vehicle to transfer wealth at reduced effective tax rates.
Incorporation and entity creation services,
including the dissolution of prior IC-DISC entities
Corporate management and governance oversight,
including the management and hosting of shareholder, board and management committee meetings whenever required
Preparation of compliance reports,
other tax filings and/or tax returns as needed
General ledger accounting
preparation of trial balances, and workpaper maintenance
Maintenance and storage of all corporate records,
including original incorporation documentation, supplier agreements, corporate minute books, loan documentation, and all other corporate documentation
Bank account management,
commission and distribution processing, and similar treasury related oversight
If desired, additional services can be provided including subleased office space for our IC-DISC clients to have a secure, exclusive business office address. The subleased office space is accompanied by the use of conference room facilities as may be required. Telephone service and answering service are also arranged, as well as mail forwarding services.
Tedder Schwarz, CPA
Tedder Schwarz, CPA
As a Certified Public Accountant, Schwarz uses his knowledge in different disciplines to reduce clients’ overall tax burdens and manage all aspects of the IC-DISC compliance process. Working with a variety of industries, he is able to recognize opportunities and find ways to reduce exporter’s taxable income. Schwarz partners with clients to form new IC-DISC entities, run commission calculations, and increase the overall export tax savings opportunity.
Mark O’Dell has a wealth of skill and knowledge in the areas of international corporate taxation and mergers and acquisitions. He brings more than thirty years of experience to the table as a corporate tax director and/or corporate tax manager for several publicly-traded multi-national companies, both U.S. and foreign-owned.
O’Dell has been involved in numerous mergers and acquisitions transactions, both as the company being taken over and the absorbing entity. Having spent years working throughout Europe, he is now eager to translate his multi-national corporate experience to assist smaller U.S. firms that could benefit from his
Joseph G. Englert, JR.Founding Partner
Founder of Export Assist Inc., Mr. Englert became well known as the leader in export tax and finance management services where he focused on assisting U.S. exporters to improve the financial return on their export portfolios.
He achieved this by financing export transactions, maximizing export tax benefits on a corporate and shareholder level, and performing turnkey implementation and management services for export finance corporations and Interest Charge Domestic International Sales Corporations (IC-DISC).