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Current Affairs

How the IRS Treats International Taxpayers and Returns

2019-12-09

The IRS requires all U.S. citizens, resident aliens, and other U.S taxpayers to file a tax return each year, no matter where they are located in the world. This means international taxpayers who were born, have lived, or are living in the U.S. must file with the IRS. This article applies to you if: You have lived in the U.S. You have paid tax in the U.S. in any way. • You are a U.S. citizen or resident, even if you are not living there now. • You have ever filed a U.S. tax return. • You have relocated to a country outside the U.S.

What are IRS Form 5471 penalty triggers?

2019-09-12

Obviously, not filing a Form 5471 at all when required to do so can trigger a Form 5471 penalty. But also, any Form 5471 that is filed but that the IRS considers not “substantially complete" may result in Form 5471 penalties. In this article we will discuss what types of mistakes on a Form 5471 could lead to "substantially incomplete" penalties and what you can do to protect yourself from an IRS international audit team that admits it is hyper-aggressive when it comes to assessing Form 5471 penalties.

What Tax Reform Means to Foreign Tax Credit Rules

2019-08-07

The Tax Cuts and Jobs Act of 2017 (TCJA) made many changes to how the U.S. taxes earnings or dividends from overseas. One of the areas impacted was foreign tax credits, which changes how taxpayers in the U.S. calculate and pay taxes on certain foreign income. Like many other parts of tax law, this can be complicated, so we’ve broken things down to explain what these changes could mean to you, whether you’re a U.S. expatriate, a corporation, or you receive income from overseas.

Does your child need to file an FBAR?

2019-08-02

The Report of Foreign Bank accounts, also known as the FBAR was a tool invented by congress in 1970 to make it difficult for criminal masterminds around the world to use the international banking system to facilitate their criminal mastermind plans. And because of that, any US person regardless of age or mental abilities must file an FBAR should their foreign bank accounts exceed $10,000 in the aggregate. Again, believe it or not this requirement extends to someone who is disabled or is a child - even a baby. Read more to find out why

The IRS is improperly and automatically assessing $10,000 Form 3520-A penalties - what to do now

2019-07-16

The IRS has assessed many of our clients and others taxpayers around the globe who might have even correctly filed Form 3520-A and Form 3520 with substantial penalties - often $10,000. What gives? What can be done about this? In this article we will explain many situations in which a Form 3520-A is required so that you can have a good idea if the IRS's penalty assessments are something you should push back on.

Thinking of Getting Your LLC Taxed as an S Corporation? Here’s How to Stay Legal and Compliant

2019-06-27

Business owners who run a Limited Liability Company (LLC) can reduce the tax they pay to the IRS by choosing to be treated as an S Corporation. Known as an “S Corporation Election,” this changes the tax status of your business. It makes you a different type of “tax entity” meaning you need to report on, file, and pay your taxes in a different way. We’ll explain the changes you need to make to stay compliant with IRS rules and the tax code, so you can avoid unpleasant penalties.

Here’s the best way to deal with certified mail from the IRS

2019-06-21

Chances are, you weren’t home when the post office attempted to deliver a certified or letter from the IRS. Chances are, a pink slip was left for you in your mailbox. You might be holding that pink slip in your hand right now. It might be a little sweaty. You might be wondering — Is this bad? Is this good? Is this no big deal? You might question - Am I going to be arrested? Should I pick up the letter? What happens if I do? What happens if I don’t? You probably are very concerned - so read on as we answer as many great questions we can.

For better or worse: Tips on breaking the news of a tax problem to your spouse

2019-04-18

There are two very common fact patterns we come across: A business owner that has run up a large tax problem. Someone with foreign accounts and assets who hasn't been reporting them correctly. They too, have a large tax problem. In both cases we often find that they have not been forthcoming about the true nature of the issue with their significant others. In this article I am going to discuss three steps to take to break the news of an IRS problem to a spouse.

13 things tax preparers get wrong when preparing IRS returns for US expats

2019-01-28

For the last ten years, our firm has been the leading offshore disclosure firm. We have reviewed thousands of expat tax returns prepared by hundreds of different tax preparation companies, CPAs, and accountants. We reviewed thousands of returns taxpayers prepared themselves using software such as TurboTax. While we have encountered some truly incredible tax preparers and taxpayers alike. However, on the whole, we are not impressed by what has been filed.

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