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How to understand IRS Form 5471 better than the IRS does

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.

Federal IRS Tax Amnesty Programs

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.

Streamlined Offshore Disclosure Eligibility

When trying to determine if you are eligible for the IRS Streamlined Offshore Disclosure Program, the first thing to ask yourself is, "Do I have criminal exposure?” If the answer is yes, it's likely in your best interest to avoid the Streamlined program altogether; instead, you would probably ...

Updated! Streamlined disclosure program continues; 2018 OVDP announced

The IRS ended the 2014 Offshore Voluntary Disclosure Program (OVDP) in September of 2018. leaving the Streamlined and Delinquent Informational Reporting Form (DIRF) programs open. And on November 20, 2018, the IRS announced new Offshore Voluntary Disclosure Practice rules for taxpayers seeking protection from criminal prosecution.

2018 Tax Resolution Programs

Tax resolution programs are extremely important to helping those that are struggling with tax debts. Many people are surprised to find out that you can actually negotiate with the IRS. There are a number of tax resolution programs provided by the IRS that can be monumental in dissolving your tax problem.

2017 IRS OVDP Opt-out updates, successes, and frustrations

The trickle of IRS Offshore Voluntary Disclosure Program (OVDP) Opt-outs has now developed into a steady stream for us. We have had some incredible successes, but we have also run into frustrations. In this article, I’ll discuss the benefits and drawbacks for those who are considering whether or not to Opt-out of the Standard OVDP 27.5% or 50% penalty.

Should I file a Streamlined Submission or use the Full OVDP?

Too many people, realizing they have a problem with issing FBARs, Form 8938 and income overseas panic. They go to and become convinced that they need to enter into the full Offshore Voluntary Disclosure Program (OVDP) --- or else. The problem is that once you go full OVDP, you can't go back, even if the Streamlined program was the most appropriate choice. In this article we will add some perspective on who should use the full OVDP and those who should use the Streamlined program.

Canada collects $120,000 in Form 5471 penalties for the IRS

Today we want to talk about the Dewees v US Claim for refund suit against the US government. It seems that when someone find out they have FBAR reporting requirements and decide to "come clean"'s not always enough. If not done correctly, that decision can open a can of worms. 

What to do with Offshore Voluntary Disclosure Program regrets

If you were a reasonable person, and weren’t an expert on IRS criminal and civil process, but rather, relied upon what the IRS claimed on their website, you would likely be convinced, that no matter what your criminal intent was, you must enter in Offshore Voluntary Disclosure Program (OVDP) or else. This article is about what to do if you realized you were scared into something you should not have done.

How Federal Tax Amnesty Programs work

IRS problems can sneak up on anyone. But not everyone's circumstances are the same. When solving a tax problem, the best option for your neighbor might not be the best option for you. In this article, we are going to go over some of the tights spots Americans get themselves into each year and the best federal tax amnesty programs for each situation.

US Expats with unfiled returns

In IRS Publication 54, the IRS gives advice to US expats with unfiled tax returns. In this article we will discuss that advice and why it is often incorrect.

The Maze Streamlined Litigation case --- our take

Three retired taxpayers had undisclosed offshore accounts. All three of them made innocent mistakes. They were frightened into entering into the 2012 IRS Offshore Voluntary Disclosure Program (OVDP) where they would have to pay a 27.5% penalty on account value. The IRS then changed the rules to allow for a lower penalty. These elderly tapaxayers attempted to have this 5% penalty applied to them, but were frustrated.

OVDP for your foreign corporation or other entity?

The IRS Offshore Voluntary Disclosure Program (OVDP) is not just for individuals. Thanks to a harsh and extensive international tax form penalty regime, there can be a great incentive to enter into an offshore program to cure any of these unfiled or substantially incomplete forms:

Willful FBAR Penalties

No doubt, the threat of being assessed willful FBAR penalties is a terror that many US persons are attempting to cope with. Some have entered into a Voluntary Disclosure program, some have created their own "soft - disclosure," and some ...

What to do about a frozen Swiss and other bank accounts

Certain financial institutions --- not just in Switzerland --- are threatening and actually freezing bank accounts for lack of US tax and bank reporting compliance. In this article, we will explain why bank accounts are usually frozen and the action you may be able to take to regain access to your funds once again. 

Was your IRS Offshore Voluntary Disclosure submission declined?

If you have made what you thought was a timely and complete Pre-Clearance or Offshore Voluntary Disclosure Program (OVDP) submission, you may be wondering why you were denied or rejected. The good news is there are alternatives available to...

2016 IRS OVDP FAQ updates...not a lot

International tax reporting requirement are constantly evolving, and it's our job to stay on top of changes that affect our clients. We had been told there were changes made to the Offshore Voluntary Disclosure ...

International taxation Principles: understanding the fundimentals

No matter if you are a US-based investor, a US expatriate, or an "other" US person living abroad, I am going to share three basic international taxation principles to you so you can get working outline how international taxation really works....

The Treasury Inspector General takes on OVDP. (Don't get too excited)

Finally, the Treasury Inspector General for Tax Administration (TIGTA) was riding in to give a blistering report on the unfair, onerous slog that is the IRS Offshore Voluntary Disclosure...

FBAR filing tips

Many people assume that only bank accounts need to be reported on the FBAR. This is incorrect. Some things you might not realize need to be included on your FBAR form: 1) Fixed deposits 2)Life insurance policies 3) Mutual funds 4) Some pensions...

Streamlined Offshore Procedure due dates

Under the rules of the Streamlined Offshore Procedures, taxpayers must amend three years of U.S. tax returns, starting with the most recent year that has passed its due date, and then going backwards.

Taxation on Foreign Inheritances and IRS Form 3520

Is there taxation on foreign inheritances? Not really, but that doesn't mean you don't have some IRS form to file. Form 3520 is officially the 'Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts'.

FATCA, OVDP, and Streamlined case studies

Offshore disclosures and FBAR penalties are a focus of the IRS. The law, procedures and actual outcomes are constantly evolving --- and sometimes the IRS operates inconsistently. To...

State offshore voluntary disclosure traps

It is our policy not to have a client enter into a state voluntary disclosure program or file amended state tax returns until after their federal standard full offshore voluntary disclosure (OVD) has concluded, whether with a Form 906 and close - out letter or ...

OVDP v. Streamlined: When 27.5% can actually be less than 5%

The standard Offshore Voluntary Disclosure Program (OVDP) "offshore penalty" on unreported foreign account is 27.5% of account values. Meanwhile, the Streamlined Domestic Offshore Procedures (SDOP) is 5% of the penalty base. So, it follows that the SDOP penalty should always be a better deal ...

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