Notes

International Tax Disputes And Fatca, Thorn Law Group
We submitted the application and received the IRS acknowledgement in a few months. Taxpayers who make payments of certain U.S.-source income to foreign persons must comply with the related withholding, deposit, and reporting requirements. This campaign addresses Withholding Agents who make such payments but do not meet all their compliance duties. The Internal Revenue Service will address noncompliance and errors through a variety of treatment streams, including examination. Form 1120-F must be filed on a timely basis and in a true and accurate manner for a foreign corporation to claim deductions and credits against its effectively connected income.

Under the revised procedures, the taxpayer can try to negotiate that penalty to a lesser penalty. A few nice benefits of reporting the income is that the United States allows depreciation of the structure – which many foreign countries do not allow.

The truth is that you shouldn’t spend a significant amount of time trying to understand your FATCA letter. Your bank’s explanation of FATCA regulations or the impact of their FATCA letter on your US tax reporting obligations is difficult to understand, if not impossible. FATCA – the Foreign Account Tax Compliance Act – is a US law that has made the world’s financial system the reporting and enforcement agent of the IRS.

LB&I Industry Guidance dated 2/1/2018 established procedures to ensure waiver requests are applied in a fair, consistent and timely manner under the regulations. Individuals who meet certain requirements may qualify for the foreign earned income exclusion and/or the foreign housing exclusion or deduction. This campaign addresses taxpayers who have claimed these benefits but do not meet the requirements. The Internal Revenue Service will address noncompliance through a variety of treatment streams, including examination. Examiners will compare the amount due under this offshore initiative to the tax, interest and applicable penalties for all open years that a taxpayer would owe in the absence of the OVDP penalty regime.

The campaign will address noncompliance through a variety of treatment streams including outreach/education and traditional examinations. Individuals who meet certain requirements may qualify for the foreign tax credit.

The voluntary disclosure submission must be sent in two separate parts. Taxpayers making both an offshore voluntary disclosure and a domestic voluntary disclosure should follow the process for offshore voluntary disclosures, but should indicate on the offshore voluntary disclosure letter that they are also making a domestic voluntary disclosure. Taxpayers must mail their offshore voluntary disclosure letter and attachments to the Internal Revenue Service Voluntary Disclosure Coordinator in Philadelphia, Pa. The “Quiet Disclosure,”“Quiet” as in not announced formally under the OVDP. The thing to remember here is that there has been a “parallel universe” of late disclosure revenue procedures in place since before the OVDP / OVDI was introduced in 2009.

What that means is that you can’t take a chance and sit back and hope your bank will keep your information quiet, because those days appear to be over thanks to FATCA. Also, the US government has thousands of other sources to call upon in their ways to crack down on overseas tax evaders.

If you have questions or concerns about the OVDP, we recommend that you get legal help today. To speak with an experienced OVDP attorney in the Philadelphia, Pennsylvania area, contact Joseph R. Viola. The Internal Revenue Service developed several voluntary offshore compliance procedures to get into compliance. Quiet Disclosures, Silent Disclosures & Qualified Quiet Disclosures are illegal — even if you are non-willful.

With the help of The Law Offices of Andrew L. Jones, you can discover whether you’ve committed a Foreign Bank Account Report (FBAR, also known as FinCEN Form 114, and formerly as Form TD F 90-22.1) reporting violation or other US tax reporting violation. If you have, we can solve address your FBAR violation quickly and for the least possible cost. The rules governing OVDP are complex, and once you enter OVDP, you will become subject to increased scrutiny by the IRS. Some people who have tried to take advantage of the program have even been subject to criminal prosecution, even though they entered the program in good faith. If you wish to take part in OVDP, you should consult with an experienced tax / OVDP attorney as soon as possible.

Under the revised procedures, the taxpayer can also try to negotiate the FBAR penalty to a lesser penalty. And, instead of an annual 20% penalty, the taxpayer pays a single 75% on the highest year’s amount of tax liability.

The IRS has a list of individuals that reside in the US that have offshore bank accounts. Under the IRM, a person is subject to a 50% penalty on the highest year’s unreported balance.

If you received this letter from your foreign bank asking you to confirm your USA relationship, it is important you cooperate with your foreign bank as they will be reporting you to the US government. It is against the law to have an offshore bank account and NOT report it. Essentially, a person must have legally earned the money that was not previously disclosed. This is to avoid the taxpayer from using IRS voluntary disclosure to launder money.

Taxpayer Identification Number as part of the financial institution’s due diligence requirements, typically on a self-certification. A self-certification (similar to IRS Form W-9) includes the customer’s name, address, and U.S. The bottom line is thatI care about helping you with your undisclosed foreign assets. If I am unable to take the call, I guarantee to return your call within 24 business hours. The consequences of failing to file and comply can be harsh and expensive.

In this letter it states that your foreign bank account information will be turned over to the USA they may even be asking you to fill out an IRS form W-9. The IRS plans on getting your foreign bank balances and interest received. We are a small firm that primarily services individuals in regard to their overseas assets and income.

When you receive a request to complete a form, you need to determine if it is the appropriate form for you to complete based your status for that year. For instance, when you receive a Form W-8BEN from a Canadian financial institution, you may complete the form if it corresponds with your current status as a non-US person. However, if you are a US person for that year, you will need to complete and return a Form W-9;instead.

Determining your US tax or citizenship status may be a complex matter and I would recommend that you check with your personal tax and/or immigration advisor before supplying any information to the requestor of the form. In addition, in the Government Accountability Office’s report from March 2013, the GAO strongly criticized the IRS’ failure to identify quiet disclosures and recommended that the IRS implement substantial measures that will allow it to quickly identify and deal with such disclosures.

At least 50% of the average percentage of assets (determined under section 1297) held by the foreign corporation during the taxable year are assets that produce passive income or that are held for the production of passive income. The preliminary acceptance letter from Criminal Investigation will instruct the taxpayer to submit the full voluntary disclosure submission to the IRS Austin Campus within 90 days of the date of the letter.

Call us for a free consultation in resolving your delinquent FBAR filings. The IRS is giving you an opportunity to declare your bank accounts without criminal prosecution through the OVDP.

Where a person willfully fails to file an FBAR, the IRS may impose a penalty equal to the greater of $100,000 or 50 percent of the account’s highest balance. Simply put, it may be advantageous to opt out of OVDP if the total nonwillful FBAR penalties you face are lower than OVDP penalties. However, if you do opt out, you still remain subject to the Criminal Investigations unit and you must fully disclose all requested information and pay the tax you owe. The 2012 Offshore Voluntary Disclosure Program is open-ended, but the IRS has the power to change its terms or terminate the program at any time.

Hearing these stories, by no means, should be translated as a stamp of approval by the IRS. Keep in mind that the IRS gets millions of returns every year and it can take some time for them to get to yours. At this point, the only thing working in your favor is time, since the statute of limitations on your tax returns is three years from the date it was filed. Andrew has guided dozens of clients through the collective disclosure of over $27 million in previously-unreported foreign assets; the median disclosure was $360,000 (numbers as of 1/29/2015).

As with OVDP, the IRS has said it may end the Streamlined Filing Compliance Procedures at some point. Clients with signature authority over in hidden foreign bank accounts or with interest in foreign corporations, trusts or partnerships that controlled undisclosed foreign bank accounts. Finally, in narrow circumstances that an FBAR tax attorney is best equipped to analyze and review, a taxpayer may obtain a no-penalty result if he/she shows there was reasonable cause for the failure to file. As will also be seen, the programs not only differentiate between the willful and non-willful taxpayers. They also distinguish between the non-willful U.S. taxpayer who is a tax resident of a foreign country and U.S. taxpayers who are residents of the United States.

IRS can criminally prosecute you and you could even face prison time and pay a fine up to 100% of your foreign assets. Simply skipping out on not filing your FBARs could be worse as the US government has tools to put you in jail. You don’t want them finding you…Think about getting compliant, so we don’t need to go thru these fines in detail with you. You are required to report your foreign Financial Accounts on a FBAR, if you don’t comply you may face steep penalties.

We fix problems in regard to our clients' unreported foreign assets. Well don’t wait…The IRS have several amnesty programs that are offered and we can get you back in compliant. On the surface the majority would qualify for the streamlined offshore amnesty program, the parameters are specific, but the IRS has been more and more lenient as they’ve realized that processing a full OVDP is extremely onerous and time consuming. We have filed over 300 clients back into complaint thru the IRS amnesty programs. You need to be aware that most foreign institutions and foreign banks are complying with the IRS.

You may also be required to submit Form W-8BEN to claim an exemption from certain US information reporting and withholding from certain types of income. Such income may include broker proceeds from the sale of US stock, bank deposit interest or proceeds from certain gambling winnings. foreign investment trust In my opinion, this is even riskier than the quiet disclosure approach. First, you’re continuing to ignore the IRS’ recommendations and second, you’re leaving your prior years still open since the statute of limitation will not begin to run until you file those returns.

For these purposes, Form 1120-F is generally considered to be timely filed if it is filed no later than 18 months after the due date of the current year’s return. The filing deadline may be waived, in situations based on the facts and circumstances, where the foreign corporation establishes to the satisfaction of the commissioner that the foreign corporation acted reasonably and in good faith in failing to file Form 1120-F per Treas.

US taxpayers who received a FATCA compliance letter must understand that the banks are following the FATCA agreement between the US and the relevant country in which the bank is located or does business. At this point, the bank has no interest in protecting you – they want to protect themselves. Their FATCA compliance letter, asking you to give them private, US-tax-related information, proves that. Less frequently, and sometimes additionally, the bank will instead include its own self-created form essentially obtaining the same information as those two Forms. If you count yourself among those individuals discovering your error for the first time through a FATCA compliance letter from your foreign bank, there is still time to act – not much time, but time enough to put together a compliance plan that protects your assets and your personal freedom.

This campaign addresses taxpayers who have claimed the credit but do not meet the requirements. The IRS will address noncompliance through a variety of treatment streams, including examination. Our attorneys also serve as adjunct professors in law schools and graduate tax programs. Complying with the reporting requirements may be difficult and time-consuming. PwC’s Canadian tax group can provide advice and support for those impacted by the program.

Taxpayers who file a quiet disclosure are risking significantly high IRS fines and penalties. Teig founded mytaxlaw.com in the year 2000 to serve as a boutique tax law firm. For more than 20 years, our firm has been entirely dedicated to helping our clients resolve tax issues with the Internal Revenue Service.

You are among the many Americans who have a bank account in a foreign country. This is why you received this letter and if you haven’t received this letter you probably will in the near future.

We concentrate on IRS Cryptocurrency Disclosures, IRS Whistleblower Claims, Non-Compliant Foreign Accounts, FATCA, IRS Offshore Voluntary Disclosures, IRS Streamlined Submissions, Tax Collection Procedure, Penalty Relief, and, IRS Examinations. Information referenced herein is provided for educational purposes only. For legal advice applicable to the facts of your particular situation, you should obtain the services of a qualified attorney licensed to practice law in your state. WASHINGTON – The Internal Revenue Service today reminded taxpayers they have until Sept. 28 to apply for the Offshore Voluntary Disclosure Program .

Your FATCA tax attorney will also outline for you the options for making a voluntary disclosure – either through the Streamlined Foreign Offshore Procedures – or, in rare instances, a non-program disclosure arguing reasonable cause as a defense to all penalties. A separate program, the Streamlined Filing Compliance Procedures, for taxpayers who might not have been aware of their filing obligations, has helped about 65,000 additional taxpayers come into compliance. The Streamlined Filing Compliance Procedures will remain in place and available to eligible taxpayers.

Whether or not this approach works is still a mystery to most practitioners. This doesn’t mean, though, that you won’t read or hear about the heroics of those who took this approach and never heard a word from the IRS.

A quiet disclosure is all bad, because you are setting yourself up for major reporting issues going forward. Maybe your CPA or accountant finds himself or herself in trouble and wants to use your file as leverage to try to reduce penalties against their practice. But, if you get caught in a quiet disclosure, which can be criminal, then you could be subject to much harsher fines and penalties, which may impact your ability to renew or change your immigration status. That is not to say you’re going to be prosecuted, but the civil penalties alone can reach 100% value of the unreported accounts.

In contrast, a taxpayer who waits for the IRS to schedule an audit could easily end up owing far more than the value of the account, and be facing a criminal charge, trial and even imprisonment. In other words, the IRS is working with many foreign countries to facilitate the reduction of offshore tax crime – so your foreign assets are not safe. Filing original or amended tax returns, and international information returns without amnesty.

Moreover, you can take the same types of deductions and expenses that you otherwise take the property was located in the United States. Even if you are earning rental income from property that is located outside of the United States, you still must report the income on your U.S. taxes . Remember, United States taxes individuals on their worldwide income.

If the taxpayer disagrees with the result, the taxpayer may request the case to be referred for an examination of all relevant years and issues. After submission of the foregoing, the taxpayer may be contacted by an IRS examiner with a request for specific additional information. The examiner will certify that the voluntary disclosure is correct and accurate. The examiner will also verify the tax, interest and civil penalties owed. You may be also be touched by FATCA if you have not stayed on top of your annual reporting requirements regarding foreign assets.

In this LIVE Webcast, tax attorneys Shannon Retzke Smith and Matthew Lee will provide the audience with an in-depth discussion of the significant trends and updates in FATCA. As experts, they will dig deeper as they analyze critical issues and offer best compliance strategies to avoid pitfalls.

Finding out about your international financial affairs “the hard way” just got a lot easier. In January of this year the IRS released an “Datat Exchange” that looks an awful lot like Google for undisclosed assets. More and more countries are getting on board with the United States’ initiative to increase international transparency and compliance in tracking down tax evaders.

We have successfully represented clients in more than 1,000 streamlined and voluntary disclosure submissions nationwide and in over 70-different countries. Kunal helped us with a successful streamlined filing disclosure of foreign assets. He came across as very knowledgeable and answered all our questions…He was efficient and quick in completing the process after we had put together all our documentation. It was fairly complicated and my accountant did not know how to report them.

Treasury have also worked to revise tax treaties and tax information exchange agreements to make it more difficult for taxpayers to evade taxes by sending their assets overseas. If you have not complied with your tax and “offshore” filing obligations, you are legally obliged to bring your filing obligations up to date. Currently, there are two amnesty programs available to Americans abroad who are required to file. In September 2018, the IRS closed the Offshore Voluntary Disclosure Program , leaving only one way back into the US tax system. We are a small firm that focuses on servicing individuals with their overseas assets and income.

Clients who are US permanent residents and are anticipating or are already in the process of acquiring US citizenship when they discover the issue of undisclosed foreign accounts. Clients who survived the Holocaust or who have other non-tax avoidance reasons for holding hidden foreign accounts. He has guided dozens of clients through the collective disclosure of over $27 million in previously-unreported foreign assets; the median disclosure was $360,000 (numbers as of 1/29/2015).

You need a trustworthy expert to guide you through this stressful process. If you choose to make a voluntary disclosure to the IRS , your tax attorney will be your guide through this complex process and ensure that every one of the dozens of necessary documents is prepared correctly and on-time. We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.

Under those procedures auditors have the authority to impose harsh penalties on late-filers but have traditionally imposed none at all . Under FATCA, foreign financial institutions are required to determine whether their customers are U.S. citizens.

I called a few attorneys and some of them tried to scare me about my situation. I wanted someone to take their time with my case and do it properly instead of rushing.

Therefore, the income you are earning from your rental property must also be included on your US tax return. In other words, a person will aggregate the total value of their accounts and assets on December 31 for each year individually. Then, the person will pick the highest December 31 annual aggregate total, and use that total only as the penalty base. Under the Streamlined Domestic Offshore Procedures, a person cannot file original returns through the program.

Our attorneys have worked with thousands of clients on offshore disclosure matters, including FATCA & FBAR. For US tax residents, the determination of your US tax status should be made each year and it may change depending on your personal facts and circumstances .

Don’t wait for the IRS to find you; coming forward before you are contacted by the IRS allows you to manage the timeline and consequences of your prior errors. Where the facts and the law support the assertion of a civil fraud or willful FBAR penalty, a taxpayer must present convincing evidence to justify why the civil fraud penalty should not be imposed. , the FBAR penalty was 27.5% on the maximum aggregate value of applicable unreported accounts. The IRS encourages taxpayers to consult with professional tax or legal advisors in determining which option is the most appropriate for them. Every foreign account or asset disclosure is unique and you will get personalized service directly with me, with access evenings and weekends to meet your schedule.

The Foreign Account Tax Compliance Act landscape has been evolving in recent years. Treasury Department’s continuous efforts to clamp down tax evasion and other criminal activities, complex reporting requirements have been instituted and several FATCA guidance have been released. I was worried of the potential penalties resulting from failure to report my foreign investments. I approached Kunal to help becoming compliant and he took time to explain about the streamlined domestic procedure.
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