PFIC: Revisiting Passive Foreign Investments: PFIC is an IRS acronym that refers to Passive Foreign Investment Companies. The acronym can be misleading to U.S. taxpayers, because it gives the impression that PFIC only refers to companies. While technically this may be true, it does not put people on proper notice that their ownership or interest…
FATCA Reporting (IRS Summary 2020)
FATCA Reporting: FATCA Reporting is a key enforcement priority, and penalties for not disclosing foreign financial assets is on the rise. In 2020, the IRS will continue aggressive enforcement of FATCA reporting. FATCA (Foreign Account Tax Compliance Act) for U.S. taxpayers commenced in 2011, on the 1040 tax return — Form 8938. With more than 110…
FBAR vs 8938 (IRS Summary 2020)
FBAR vs 8938: Comparing IRS Offshore Account Filing Rules: The FBAR vs FATCA Form 8938 is (unnecessarily) complex. The IRS provides some resources, but oftentimes these instructions and publications are unclear. The FBAR is the FinCEN Form 114, and the 8938 is the FATCA Form 8938. The FBAR is filed electronically with FinCEN and is…
FBAR Insurance Policy & How to Report to IRS (Summary 2020)
FBAR Insurance Policy and how to report foreign life insurance to the IRS: The IRS FBAR Insurance rules for reporting life insurance for foreign policies are very complex. The IRS requires U.S. person owners of a foreign life insurance policy to report the policy annually, on an FBAR. In recent years, the Internal Revenue Service has…
Eggshell Audit (IRS Summary 2020)
Eggshell Audit: IRS High Risk Examination & Criminal Exposure: With an eggshell audit, the taxpayer is at a high risk for a potential IRS willful violation, tax fraud, and even a criminal investigation by the IRS. An eggshell audit is a situation in which the Taxpayer may have incriminating evidence that the agent is not…