First National Bank advises Country A, a boycotting country, on various U.S. investments. Country A instructs First National Bank not to recommend for investment any shares of certain blacklisted companies. First National Bank follows this instruction. Has First National Bank participated or cooperated in an international boycott under the IRS regulations by this action?
By following Country A's instruction not to recommend investments in certain blacklisted companies due to a boycott, First National Bank has participated or cooperated in an international boycott. U.S. regulations, including those enforced by the IRS, require entities to report and, in many cases, prohibit participation in foreign boycotts not sanctioned by the United States. Therefore, First National Bank has indeed participated or cooperated in an international boycott under the IRS regulations.
The correct answer is A. Yes. The companies are the subject of a boycott. By following Country A's instruction not to recommend investments in certain blacklisted companies due to a boycott, First National Bank has participated or cooperated in an international boycott. U.S. regulations, including those enforced by the IRS, require entities to report and, in many cases, prohibit participation in foreign boycotts not sanctioned by the United States.