Overview of New Immigrant U.S. Tax Rules When foreigners first move to the United States or otherwise become U.S. persons for tax purposes, learning how to file their U.S. tax returns is not usually their main concern – especially since filing taxes in most foreign […]
IRS To Reverse Course on Form 3520 Penalty Enforcement Finally, after many years of Tax Practitioner challenges to the IRS enforcement protocols for international information reporting penalties – with a focus on Forms 3520/3520-A — the Internal Revenue Service has taken notice. The NTA blog (National […]
A Beginner’s Guide to Resident Alien Taxation by Visa Type When a U.S. Taxpayer is either a U.S. Citizen or a Lawful Permanent Resident, they are required to report their worldwide income on their U.S. tax return. This differs from most countries that only tax individuals […]
Do I Owe an Exit Tax when I Leave the U.S. One of the most common questions our international tax lawyers receive each year when U.S. Taxpayers get ready to renounce their U.S. citizenship or terminate their Lawful Permanent Resident status is whether or not they […]
Is Unreported Foreign Income or Assets Criminal? International tax law can be difficult — especially when it involves international information reporting of foreign assets and the U.S. tax implications of disclosing foreign income. Due to the complexities of the IRS tax forms, it is not uncommon […]
Disclosure of Foreign Assets by U.S. Taxpayers Each year, U.S. Taxpayers across the globe who have ownership of foreign assets, investments, accounts, trusts, entities, etc. (‘Foreign Assets’) are required to disclose their information to the IRS on various international information reporting forms. The different tax forms […]
Ending Your U.S. Status Has Tax Complications Each year, our international tax attorneys are contacted by U.S. Taxpayers across the globe who find themselves in the same tax predicament when it comes to expatriation. Oftentimes, the situation is the same: the Taxpayer retained a firm that […]
Navigating the Challenges of Foreign Asset Offshore Disclosures The Internal Revenue Service has significantly increased enforcement for offshore disclosure and foreign account filing non-compliance penalties. In years past, the IRS did not routinely penalize U.S. Taxpayers for failing to report their foreign accounts — and oftentimes, […]
Don’t Settle for an Inexperienced Local Foreign Account Lawyer Due to the complexity of offshore disclosure, when a Taxpayer is out of compliance or failing to report foreign accounts, assets, investments, equities, trusts, entities, etc. and they want to get into compliance, it is very important […]
Can I Talk to a CPA About My Undisclosed Offshore Assets? When U.S. Taxpayers across the globe learn that they are out of compliance with the IRS and FinCEN for failing to report their foreign accounts, assets, investments, trusts, or entities, oftentimes their immediate knee-jerk reaction […]
IRS Targets Foreign Accounts, Assets, Trusts, and Gifts Over the past several years, the Internal Revenue Service has significantly increased enforcement of international-related tax and reporting compliance matters. There are many different international information reporting forms that a U.S. Taxpayer may have to file when they […]
Film Producer Indicted for Offshore Tax Violations Recently, an international film producer was indicted for a decades-long conspiracy involving unreported income, undisclosed foreign accounts, and a fraudulently filed streamlined domestic offshore procedure submission. As our international tax layers have written about many times, taxpayers must be […]
Form 3520 and Penalties A U.S. taxpayer may have to file many different international information reporting forms each year to disclose their foreign accounts, assets, investments, businesses, gifts, and trusts to the IRS. One of the most common types of international information reporting forms that Taxpayers […]
The Pitfalls of Undeclared Foreign Financial Accounts In recent years, the Internal Revenue Service has significantly increased the enforcement of foreign accounts compliance for U.S. Taxpayers with undisclosed foreign accounts, assets, investments, and income. Typically, when Taxpayers have unreported foreign money, they have several opportunities to […]
> A Primer on Tax Fraud Violations Most IRS tax violations are civil and not criminal. And, while a civil tax violation may result in additional taxes, fines, penalties, and interest — it does not result in incarceration (although violating civil orders can result in jail […]
What is an Offshore Tax Law Specialist? Ever since the Internal Revenue Service increased its enforcement of offshore disclosure and compliance matters, many less-experienced attorneys have jumped in the mix, making false representations about their experience — and leading taxpayers astray. And, when these attorneys take […]
How False Statements Increase Criminal Tax Audit Risks Oftentimes, when U.S. taxpayers are audited by the IRS, it is for civil-related matters. For example, a taxpayer may be under examination for certain deductions that they claimed on their tax return, or possibly the Internal Revenue Service […]
What are IRS Foreign High-Risk Tax Audits When it comes to dealing with Internal Revenue Service tax audits or examinations, most of the time they are nowhere near as bad as other tax attorneys want to make it seem. Other than taxpayers who find themselves in […]
What Does Being Board-Certified in Tax Law Mean? While both CPAs and attorneys may handle tax matters, a Certified Public Accountant (CPA) or Enrolled Agent (EA) is not the same as a tax attorney. The roles of non-legal tax professionals (CPA and EA) are different than the […]
Supreme Court Rules in Favor of the Transition Tax Recently, the Supreme Court ruled in favor of the U.S. government on the legality of the Internal Revenue Code, Section 965 Repatriation Tax (aka Mandatory Repatriation Tax, MRT). Otherwise known as the Transition Tax, Section 965 was […]
Taxpayers Advocate Service (TAS) Foreign Penalty Update For many years, our international tax law team has written numerous articles on the absolute absurdity of how the Internal Revenue Service penalizes taxpayers for the failure to report certain international information reporting forms, such as Form 3520 and […]
A Guide to Legally Moving Money Offshore Especially for taxpayers who may be new to the United States tax system, it can come as a shock and a surprise to learn that not only does the United States tax individuals on their worldwide income, but they […]
The Top 7 Criminal Tax Questions About Foreign Reporting Answered Oftentimes, when U.S. taxpayers make a mistake involving international tax and reporting, their knee-jerk reaction is to assume that they may have done something criminal and that the IRS Special Agents will be banging down their […]
PFIC Tax Implications Over the past several years, there has been a significant increase in the number of U.S. Taxpayers who have elected to invest in pooled funds such as U.S. mutual funds, ETFs, and other passive investments (instead of individual stocks and bonds) — and […]
Was Your IRS Offshore Disclosure Denied? (2024 Update) When it comes to the Internal Revenue Service and offshore disclosure, many U.S. taxpayers can qualify to safely get into international tax and reporting compliance for previously undisclosed foreign accounts, assets, investments, and income – and regain their […]
Common Streamlined Filing Compliance Mistakes to Avoid The IRS Streamlined Offshore Procedures (stand-alone procedures) is in its eleventh year and has been one of the most successful IRS Programs used to bring non-willful taxpayers safely into compliance for undisclosed foreign accounts, assets, investments, and income. […]
The IRS Scrutinizes Foreign Account Reporting U.S. taxpayers who have ownership or interests in (or signature authority over) foreign accounts, assets, or investments may have an annual international information reporting requirement – or several requirements – depending on which category of accounts they own and the […]
An IRS Expatriate Audit Case Study Expatriation is the process in which a U.S. Citizen (USC) or a Long-Term Lawful Permanent Resident (LTR) formally renounces their U.S. citizenship or terminates their Lawful Permanent Resident status. For some taxpayers, the expatriation process is relatively painless. Even though […]
Bad Tax Preparer Advice Gets Clients in Trouble While most tax preparers and CPAs are ethical, sometimes a tax preparer may push a client into a tax position that only benefits the preparer. In this type of situation, the CPA goads a U.S. taxpayer client into […]
The IRS Warns About Offshore Bank and International Schemes In recent months, the Internal Revenue Service has issued various warnings to U.S. Taxpayers worldwide involved in potentially abusive and unscrupulous tax schemes. Some of the current focuses of the IRS include: Sham Trust Arrangements, Improper […]
The IRS Scrutinizes Abusive Trusts In recent years, the Internal Revenue Service has significantly increased enforcement of trust compliance for taxpayers residing in the United States and abroad, who are owners or beneficiaries of domestic and foreign trusts. Oftentimes, trust owners and trust beneficiaries misconstrue their […]
What You Must Know About Penalties for Form 3520-A When it comes to IRS international information reporting, one of the most complicated forms that some U.S. taxpayers may have to file on an annual basis is Internal Revenue Service Form 3520-A. Specifically, Form 3520-A is required […]
Malta Pension Plans are Being Targeted for IRS Non-Compliance Back in 2021, the United States and Malta issued a CAA (Competent Authority Arrangement) acknowledging that U.S. Taxpayers’ attempts to utilize certain Malta personal pension and retirement schemes as Roth IRA alternatives were not kosher. In other […]
The IRS Cracks Down on Promoters of Abusive Sham Trusts In recent years, the Internal Revenue Service has been aggressively cracking down on abusive trusts and other tax shelter arrangements. Recently, an indictment (and then a superseding indictment) came down in a complex tax shelter trust […]
Taxpayers with Overseas Accounts For many U.S. taxpayers who have overseas investments such as: Stock accounts Mutual fund accounts Business Entities Trusts Life insurance policies, and/or Checking and Savings accounts they may have certain international information reporting requirements each year to disclose this information to the […]
Overview of Form 8938 Reporting Out of all the different international information return filing requirements, Form 8938 is a relative newcomer to the world of foreign account and asset reporting. The Form 8938 is the Statement of Specified Foreign Financial Assets under 26 U.S.C. 6038D and […]
Form 3520 While there are many different international information reporting forms that a U.S. taxpayer must be aware of when it comes to tax filing season, IRS Form 3520 might be one of the most important foreign IRS tax forms to file timely. Form 3520 is […]
How Much Did the IRS Really Ease Foreign Trust Reporting In early May of 2024, the Treasury Department and Internal Revenue Service issued proposed regulations for foreign trusts and large foreign gifts. While there are some bright spots in the proposed regulations, in general, U.S. taxpayers […]
IRS Foreign Account Penalty Relief For U.S. taxpayers who did not previously report all of their foreign accounts, assets, investments, and income on their tax returns and other international information reporting forms, the Internal Revenue Service offers many different offshore disclosure programs and procedures they […]
Avoiding IRS Abusive Schemes, Transactions and Arrangements While the Internal Revenue Service has a reputation for perpetually being the bad guy and going after U.S. taxpayers for every mistake they make on their taxes, there is another aspect of the IRS — which is to protect […]
Tax-Favored Foreign Retirement Account One of the biggest headaches for U.S. Taxpayers across the globe who have retirement accounts in foreign countries is having to report them accurately on their U.S. tax return. While reporting these ‘accounts’ on the FBAR and Form 8938 is usually […]
Understanding Foreign Gift Anti-Avoidance Rules One of the biggest concerns that the IRS has when it comes to the reporting of foreign gifts and trusts, is making sure that taxpayers report the information accurately. An issue that has arisen over the years is that taxpayers […]
The New Proposed Foreign Trust Regulations The reporting of foreign trusts and large gifts and inheritances is a very complex aspect of international tax law. That is in part because many aspects of foreign trust laws have not been properly updated to coincide with COLA […]
For U.S. Resident Owners/Beneficiaries of Foreign Trusts It is very common for U.S. taxpayers to form trusts — both domestic and foreign. And, trusts can be used for many different purposes. Some of the more common reasons to create a trust are: a basic Revocable Trust […]
D.C. App. Reverses Farhy, Rules Foreign Information Penalties Valid Unfortunately, U.S. taxpayers across the globe who are required to report their foreign assets to the IRS on various international information reporting forms were dealt a heavy blow by the DC Court of Appeals, when the Appellate […]
Form 3520-A Filing Requirements & Reporting Rules While the U.S. tax and reporting of foreign accounts, assets, and investments in general can be very complicated, the rules involving the filing and reporting of foreign trusts can be overwhelmingly complex for many tax filers. Foreign trusts are […]
Defenses to Late-Filed IRS Form 3520 Penalties While there are many different international information reporting forms that a U.S. person taxpayer may have to file each year to disclose their unreported foreign accounts, assets, investments, and income — Form 3520 is one of the most dangerous. […]
Reporting Foreign Pension Income to the IRS It is very common for U.S. taxpayers who are considered U.S. persons for tax purposes to have worked or been employed in a foreign country and accumulated foreign retirement/pension over their lifetime — or possibly invested in a personal […]
Are In-Person Interviews Required for Failure to File International Reporting Forms For many U.S. taxpayers who are out of compliance for failing to report foreign accounts, assets, investments, and/or income, at some point, they realize that they want to get back into compliance and into the good graces […]
Fraudulent Tax Deduction Promoters Get Hefty Prison Sentences In recent years, the Internal Revenue Service and the Department of Justice have been actively pursuing financial crime cases. This is to both protect the public, reduce the tax gap, and send a stern message to would-be tax […]
Moore vs. United States (Sup Ct.) Recently, in the case of Bittner, the Supreme Court decided against the Internal Revenue Service on the issue of whether they can issue foreign bank and financial account (aka FBAR) penalties based on the number of accounts a taxpayer failed […]
Reasonable Cause International Penalty Relief When a Taxpayer has failed to report their foreign accounts, assets, investments, and income to the IRS in previous years, they may become subject to IRS fines and penalties for their non-compliance. Oftentimes, the penalties for international information reporting non-compliance can […]
The Penalty Relief Programs for Late International Return Filing *A new update to our prior article about penalty relief procedures. For the past several years, the Internal Revenue Service has significantly increased enforcement of international tax reporting and compliance. There are many different international information […]
A New Expat Tax Planning Guide for U.S. Taxes For expats who are considered to be U.S. persons for tax purposes, such as United States Citizens, Lawful Permanent Residents, and foreign nationals who meet the substantial presence test, they may have an annual tax and […]
I Reside Overseas and Owe U.S. Taxes U.S. tax law can be very onerous and complicated. As a result, when a U.S. Taxpayer is an expat who resides overseas, they may stop filing U.S. tax returns — either because they do not believe they are still […]
Are You at Risk of Committing Tax Fraud While there are many different types of tax rules, laws, and statutes a person can violate, tax fraud is one of the most common types of violations. That is because tax fraud can involve many different types of […]
Considerations Before Expatriating from the United States Expatriation is the process of formally renouncing U.S. citizenship or relinquishing Lawful Permanent Resident status when the U.S. Person is deemed a Long-Term Lawful Permanent Resident (LTR). Once a person formally expatriates, it is very difficult if not impossible […]
Can Expats Amend Prior Tax Returns or File Late Taxes Safely? Most countries (aside from the United States) only require taxpayers who are residents of their country to file annual tax returns to report their worldwide income. This is referred to as Residency-Based Taxation. Unfortunately, the […]
International Information Returns For most U.S. Taxpayers, their tax return filings are relatively straightforward and usually just include the filing of Form 1040 along with a few schedules. But, when a taxpayer has foreign assets, accounts, investments, or income then their tax return becomes much more […]
Unrealized Income from a Foreign Corporation and U.S. Taxes Currently, there is a very important international tax case before the Supreme Court, Moore v. U.S., which (rightfully so) challenges the U.S. government’s ability to implement the ‘mandatory’ repatriation tax act. The Repatriation Tax Act requires U.S. […]
How to Report Foreign Retirement on U.S. Tax Forms It is very common for U.S. Taxpayers who are considered U.S. Persons for tax purposes to have been employed in a foreign country and accumulated foreign retirement/pension over their lifetime. In addition, some U.S. Persons may also […]
Did You Receive a Foreign Form Penalty Notice from the IRS? *A 2023 update to our prior article. In recent years, the Internal Revenue Service has significantly increased enforcement for non-compliance with foreign accounts, assets, and investment reporting. Each year, US taxpayers are required to report […]
Avoiding Double Taxation When Living Abroad Taxpayers who live abroad but are still considered US persons — and are therefore subject to U.S. tax on their worldwide income — are understandably concerned that they will be double taxed on the same income. For example, if a […]
Validity of Section 965 Repatriation Taxes Goes to Supreme Court Recently, in the case of Bittner, the Supreme Court decided against the Internal Revenue Service on the issue of whether they can issue foreign bank and financial account (aka FBAR) penalties based on the number of […]
Reporting Foreign Real Estate to the IRS It is very common for U.S. Persons who are foreign citizens or otherwise have foreign investments to have foreign real estate as part of their investment portfolio. Unfortunately, many foreign countries have different, and more complex rules and regulations […]
International Tax Filing Mistakes With the globalization of the U.S. economy, it is very common for U.S. person individuals such as citizens and residents to have international components to their U.S. tax returns. This may include: reporting income from overseas, claiming foreign tax credits for taxes […]
Are Overseas Money Transfers to the U.S. Taxable? Michelle is a U.S. person who lives in the United States. She has rental income and bank interest income generated from a foreign country. Each month, she receives rental income from her tenant, which is then transferred into […]
Foreign Inheritance Tax When a U.S. Person receives an inheritance from a Foreign Person, it is referred to as a Foreign Inheritance — and this ignites the foreign reporting requirements under the Internal Revenue Code, specifically 26 USC 6039F. The concept of Foreign Inheritance Tax has […]
Foreign Inheritance Taxation and Reporting to IRS When a U.S. person receives an inheritance from a non-resident alien (aka non-U.S. Person), the U.S. tax rules are different than when a person receives an inheritance from a U.S. person. That is because when the decedent/estate is a […]
Foreign Assessable Penalties When it comes to international information reporting penalties, the Internal Revenue Service does not play fairly. That is because international information reporting penalties such as Form 3520, Form 5471, and Form 5472 are not subject to typical deficiency procedures. Rather, when it comes […]
International Tax Evasion While there are many different types of international tax crimes, the crime of tax evasion is one of the most well-known types of criminal tax violations. This is because tax evasion crimes tend to end up in the news — and especially when […]
U.S. Taxation Rules for Residents or Citizens The United States tax system is very complicated, especially for Taxpayers who were not born in the United States or are new to the U.S. The United States’ taxation rules for individuals operate much differently than most other tax […]
Foreign Account and Tax Reporting Over the past several years, the United States government has made foreign tax and reporting compliance key enforcement priorities. To best understand how the Internal Revenue Service reached the point of aggressively enforcing missed international reporting forms with high fines and […]
When does the IRS Consider Income to be Taxable? The United States tax system is much different than many other tax systems across the globe. In general, the US tax system is very complex and even tax matters that seem relatively simple on the surface can […]
Tax Evasion and Fraud In recent years, there has been a significant uptick in the U.S. government’s enforcement of international criminal tax violations. New technological advances — coupled with the globalization of the U.S. economy — have made it significantly easier for US Taxpayers to move […]
Streamlined Domestic vs Streamlined Foreign When a Taxpayer has failed to properly report their foreign accounts, assets, investments, and income to the U.S. Government — and they are non-willful — they may qualify for the Streamlined Filing Compliance Procedures. The Streamlined Filing Compliance Procedures are designed […]
Is it Tax Planning, Avoidance, or Tax Fraud? When a US Taxpayer wants to reduce their tax liability, the general terms that are used are phrases such as ‘Tax Planning,” ‘Tax Avoidance,” and/or ‘Tax Minimization.’ From a baseline perspective, the term tax avoidance does not mean […]