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 […]
Is Your Hourly CPA Ripping You Off on International Tax Prep? Each year, we get approached by taxpayers worldwide (especially during tax season) who were duped by their CPA regarding the filing of international tax and expat-related tax preparation. Oftentimes, the situation arises when the CPA […]
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 Return (IIR) Tax Penalties 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 […]
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. […]
Is Foreign Pension Reported on FBAR, Form 8938, 8621 & 3520-A? When it comes to the US tax and reporting requirements for foreign income, accounts, assets, and investments — foreign pension plans are some of the most complicated — and they are required to be disclosed […]
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 Form 3520 Reporting When a US Person receives an inheritance from a foreign person, a non-resident alien who has no US tax nor reporting requirement — the main requirement for the US person (not decedent) is to file a Form 3520 to disclose the […]
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 […]
Form 3520 and Penalties While the FBAR is the most common type of international information reporting form that US persons with foreign accounts may have to file, there are several other types of IRS foreign tax forms that US persons may have to file as well […]
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 […]
Did IRS Reject Your Form 3520 CDP Claims? The Collection Due Process Hearing (aka CDP Hearing) is an opportunity in which some Taxpayers may have the chance to challenge certain outcomes and penalties issued by the IRS. Over the past few years, using CDP to challenge […]
IRS Files Notice of Appeal in Farhy The case of Farhy was one of the most taxpayer-friendly case rulings in an international information reporting case ever issued by the Tax Court. That was because, in the case of Farhy, the Tax Court ruled in favor of the […]
Wealthy Non-Filers are Being Aggressively Targeted Recently, the Internal Revenue Service issued a press release identifying categories of tax filers or non-filers they intend to go after in the upcoming years for civil and criminal investigations. One of the key areas of interest of the IRS […]
Residents of Puerto Rico and IRS Tax Audits Recently, the Internal Revenue Service issued a press release detailing various types of investigations they intend to target for both civil and criminal enforcement. In continuing our recent summary on issues involving criminal investigations in general, and specifically […]
What is a John Doe Summons? The Internal Revenue Service will issue a Summons when it wants a person to produce certain documentation relevant to an IRS (or related) tax investigation. The IRS can ask for items such as books, papers, records, and other data in […]
PFIC Tax Implications Over the past several years, there has been a significant increase in the number of US 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 this […]
Flat-Fee Streamlined Filing Lawyers Flat-Fee Streamlined Filing Lawyer Fees: With the IRS having both closed OVDP (2018) and ended DIIRSP (2020), the big question is whether Streamlined may be next up on the chopping block. If you are considering attorney representation for the streamlined offshore procedures, […]
Streamlined Filing Compliance Procedures The IRS Streamlined Filing Compliance Procedures have been a stand-alone Internal Revenue Service offshore disclosure option since mid-2014. The current version of the Streamlined Filing Compliance Procedures is available to individual taxpayers, trusts, and estates who are non-willful — and have failed […]
IRS Voluntary Disclosure Program Updated Practice When a US Taxpayer is out of compliance with the Internal Revenue Service, they have different tax amnesty options available in order to voluntarily disclose their unreported money — and get into compliance. The IRS Voluntary Disclosure Program is a […]
Are You Under Criminal Tax Investigation? While the majority of the time, violations of international tax laws are typically going to be civil in nature and not criminal — sometimes depending on the level of intent or willfulness, a violation may become a tax crime. In […]
A Resident Alien Guide to Income Taxation The United States tax system can be very complicated for anyone to understand and especially for taxpayers who may not be born in the United States or otherwise familiar with the US tax system. The taxation rules in the […]
Streamlined Domestic Offshore Procedures In 2014, the Internal Revenue Service developed a stand-alone International Tax Amnesty Program for non-willful US Taxpayers who have not timely disclosed offshore assets, investments, accounts, and income. The program is referred to as the Streamlined Domestic Offshore Procedures — or SDOP […]
Streamlined Foreign Offshore Procedures For non-willful Taxpayers who are considered ‘foreign residents’ and have not timely reported their foreign accounts, assets, investments, or income to the US Government in prior years, the Internal Revenue Service developed the Streamlined Foreign Offshore Procedures (SFOP) in order to […]
Gifts from Foreign Persons When people think of the Internal Revenue Service, most of the time the focus is on tax-related issues. And, when it comes to international matters, most taxpayers are concerned about issues involving international reporting of foreign accounts, assets, investments, and income. […]