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.
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.
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 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.
Are you being fitted out with a tax time bomb? This is a question you must ask yourself if are a US person who lives overseas. What we've learned about the tax industry the past ten years is sobering. Whether you are retired overseas, working abroad, or have business opportunities around the world, this is the information you need to know about filing your US taxes so that you can breathe easier this tax season --- and well beyond.
IRS Form 5472 is the information return of a 25% Foreign-owned U.S. Corporation or a Foreign Corporation Engaged a U.S. Trade of Business. The form is both difficult to file and consequential if not done correctly. The IRS has kept up its enforcement campaign and additionally, the Tax Cuts and Jobs Act of 2017 (TCJA) made some rather significant changes to both the penalties and who is required to file a Form 5472. In this article, we will discuss what hasn’t changed, and what we consider the most important things that have changed.
Maybe --- if your foreign retirement plan is located in a tax treaty country like Germany, Canada (RRSP & RRIF), the Netherlands, UK, or Belgium, your foreign retirement plan may not be taxable until distribution (although there are likely reporting requirements). But if your foreign retirement plan is not in one of these countries --- read on.
GILTI was created in Section 951A of the US tax code by the 2017 Tax Cuts and Jobs Act, aka, Tax Reform. GILTI involves incredibly complicated calculations and huge additional compliance burdens starting for tax year 2018, and for certain types of shareholders in foreign corporations, can dramatically increase taxes. In this article, we debunk six myths surrounding GILTI, so you can lower your tax bill, or the tax bill of your clients'.
The new GILTI tax regime is quite a complicated mess. US shareholders of foreign corporations could be in for a very nasty surprise as GILTI really made a mess of things. In this article we will discuss six possible way to eliminate or reduce GILTI tax surprises.
The US is the world’s largest economy by far. And currently, the economy of the US is outperforming nearly every major country. So for many around the world looking to get to the next level, they look at being in the US as essential to their growth.
The IRS rules by fear and intimidation. Because of this, tens of thousands of US expatriates who learned they were in non-compliance and took the steps to rectify the situation. However, there are countless US expats who would love to be in tax compliance, but simply can’t afford the cost of hiring a firm like ours to help them submit their Streamlined “Foreign” Submission. Once such person is our latest podcast guest, "Julio." Julio has decided to definitely NOT be in compliance. His reasons are well-known to many US expats, perhaps not so well-known to Congress.
It is that time of the year again, when the early tax filing season is upon us and interest not he IRS is at a yearly high. In response, you will see article published claiming to give you the “secret sauce” on how to avoid an IRS tax audit, by warning you of “red flags.” There articles are all fine, I suppose, if this was 2008. However, the IRS has changed drastically since then. In this article, we will discuss what the real audit red flags are, and what is just sort of things are outdated.
When the IRS introduced Subpart F, it completely changed the the rules of international tax planning. Things have never been the same. Yet Congress was not done. The Tax Cuts and Jobs act of 2017, aka Tax Reform, change Subpart F and not for the best. So what are the Subpart F rules? Why are they so awful? What can be done to avoid Subpart F? This article answers these questions.
An unfortunate discovery for many passionate advocates is that many other advocates do not share the same passion for their clients. This is true in the tax industry. It in an uncomfortable truth that many tax professionals like that the overly complicated US tax code. It compels people to have to hire them. But not all advocates are like this. We found a kindred-spirit in Canada. John Richardson, both a brilliant tax attorney and a thoughtful advocate who too wants to see the law reformed to more just system of taxation. In this episode of the IRSMedic podcast, we finally got the chance to speak to Attorney Richardson.
We are joined today by guest Keith Redmond, an American overseas global advocate to talk about updates on the Repeal FATCA movement, Territorial Taxation for Individuals, and some tax traps for people who are, or are thinking about becoming a US person.
We have been working very closely with the team in Washington that has been trying to repeal the Foreign Account Tax Compliance Act (FATCA). But FATCA is only part of the problem. The problem is that US imposes universal tax jurisdiction, a relic of the US Civil War. Universal tax jurisdiction, otherwise known as Citizenship Based Taxation, is something no other civilized country does. The Republicans Overseas group an others are hard to eliminate this 19th century relic. In this article we will sow you what you can do to help
Our work as Offshore Voluntary Disclosure Program (OVDP) attorneys is rewarding. Working with our dynamic clients, getting to know them, their families, while doing our best to mitigate the risk and damage the IRS intend to cause --- we feel great because the work we do is incredibly consequential.
While there is a US-Indian tax treaty that claims to offer benefits, the issue is that the "Savings Clause" of the treaty negates the double-taxation prohibition. Meaning, anything earned in India is subject to US taxation.
It has now been over a year since the FAST Act was passed. The FAST Act included a provision that amended the US tax code to give the power to the IRS to have your passport revoked for unpaid federal income tax taxes of $50,000 or more.
The FBAR form is a reporting requirement for certain foreign financial accounts. The penalties for failing to file an FBAR are no joke. The IRS can apply a $10,000 penalty for each non-willful violation of the filing requirement.
IRS Form 5471 is a form required to be filed by US owners of foreign corporations. People often contact us asking what to do if they realize that they have unfiled or misfiled Forms 5471. Here are the answers to that, and other common questions we get.
Note: Some of this information is likely obsolete and was written pre-Tax Reform and is left up as an explanation of the old rules. Be sure to check back as we update our website.
IRS Form 5471 was created by a law that required domestic corporations to provide their asset and balance sheets on their foreign corporations. The hope was to stop them from hiding money overseas. Things have "evolved" since the inception of the law. Now: IRS Form 5471 requirements just aren't for large multi-nationals anymore; US taxpayers are often surprised to learn that they are not in compliance.
In this article, I share my insight and hard lessons I learned as a tax attorney over the last 15 years. Whether you need to settle tax debts or get into compliance with unfiled tax returns, unreported income, or missing informational reports (such as foreign bank accounts), or have concerns about criminal charges, there are a variety of federal programs to help you end the uncomfortable uncertainty of a tax problem.