Frequently Encountered Taxation Issues to Consider

Size: px
Start display at page:

Download "Frequently Encountered Taxation Issues to Consider"

Transcription

1 AMERICAN IMMIGRATION LAWYERS ASSOCIATION 21 May 2015 Frequently Encountered Taxation Issues to Consider Patrick W. Martin Procopio, Cory, Hargreaves & Savitch LLP 525 B Street, Suite 2200 San Diego, CA direct dial: direct fax: Patrick.Martin@procopio.com

2 Patrick W. Martin Practice Areas International Tax Private Client & Tax Controversy Admissions California District of Columbia Texas Distinctions Best Lawyers of America (Tax) 2015 The State Bar of California V. Judson Klein Award November 2010 The University of San Diego School of Law Distinguished Alumni Patrick W. Martin is the leader of the firm s tax team. Mr. Martin s practice emphasizes international tax planning and related international law matters. Mr. Martin represents a range of foreign individuals, multi national families, companies, international athletes, entertainers, developing worldwide investment and financing structures, international tax treaty planning strategies, planning worldwide income, and estate and inheritance taxes. He helps resolve and plan for international tax audits, tax controversies and represents clients in tax litigation and refund cases in U.S. Tax Court, the Court of Federal Claims and U.S. District Courts. He develops wealth preservation structures to compliment the clients international investments and business transactions. 2

3 TABLE OF CONTENTS - AGENDA I. Key Immigration Considerations II. Overview of Different Tax Systems III. Pre-Immigration Planning IV. Tax Residency Under U.S. Law V. Offshore Voluntary Disclosure Program 3

4 TABLE OF CONTENTS - AGENDA VI. Losing Residency VII. Effects of Losing Residency VIII. Ethical Issues for Consideration IX. Statute of Limitations X. Problem of False Tax Documents 4

5 International Tax Issues Not Just for International Tax Lawyers I. Key Immigration Considerations 5

6 I. Key Immigration Considerations Who is a U.S. Citizen How? 14 th Amendment: Anyone born in the U.S. (excluding certain children of diplomats) becomes a U.S. citizen by virtue of their birth in the United States pursuant to the 14th Amendment (Section 1) of the U.S. Constitution. All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside. 14 th Amendment to the U.S. Constitution See, expatriation.com/ for various articles and resources regarding U.S. taxation and immigration issues. 6

7 I. Key Immigration Considerations Who is a U.S. Citizen How? Derivative Citizenship : Every individual, such as Winston Churchill who was born to a parent who was a U.S. citizen must consider whether they too are also a U.S. citizen by the concept known as derivative citizenship ; i.e., derived from a U.S. citizen parent. The U.S. Citizenship and Immigration Services (USCIS) has a Nationality Chart 1, for Children Born Outside U.S. to help determine if the individual was a U.S. citizen at birth. Having derivative citizenship means the individual became a citizen at birth, even if no (i) Application for Certificate of Citizenship (Form N 600) or (ii) U.S. passport (Form DS 11: Application For A U.S. Passport) is ever applied for by the individual. See, expatriation.com/ for various articles and resources regarding U.S. taxation and immigration 7

8 I. Key Immigration Considerations Who is a U.S. Citizen How? Derivative Citizenship for Children of U.S. citizens depending on: The terms of the citizenship statute in place at the child s birth Which parent is a U.S. citizen How long that parent resided in the U.S. Those who acquire Citizenship through the formal Naturalization process U.S. Territories Those born in Puerto Rico are U.S. citizens; those born in Guam are not U.S. citizens 8

9 Source: USCIS uscis.gov/pol icymanual/p DF/Nationali tychart3.pdf 9

10 I. Key Immigration Considerations Who are Lawful Permanent Residents? ( Green Card Test ) - Immigration Law vs. Tax Law Pathways to Permanent Residency, through: Family Employment Investment Refugee & Asylum Diversity Lottery 10

11 I. Key Immigration Considerations Other Resident Nonimmigrants Non Immigrant Visa Holders Allowed to Work in U.S. Most Common Nonimmigrant Visa Categories E 1/E 2 Treaty Trader/Investor L 1 Intra company Transferees H 1B Specialty Occupation O 1A Extraordinary Ability Trade NAFTA ( TN ) 11

12 I. Key Immigration Considerations Other Resident Nonimmigrants Non Immigrant Visa Holders Allowed to Work in U.S. Students, Exchange Visitors and Interns: F 1 Students generally evolve into a work authorized category J 1 Exchange Visitors and Interns generally do not transition into work authorized categories, other than physicians Miscellaneous Visa Classifications: B 1 Visitors H 2A Agricultural workers, H 3 Trainees, M 1 Vocational students 12

13 I. Key Immigration Considerations Federal Tax Residency Residents Aliens Generally subject to tax same manner as a U.S. Citizen (world wide income). I.R.C. 61. Includes green card holders residing abroad even if immigration statusisnotvalid Treas. Reg. Section (b) 1(b) Non Resident Aliens Subject to taxation on income with U.S. source FDAP income (I.R.C. 871(a)) or taxable income effectively connected with a trade of business in the U.S. (I.R.C. 871(b)).

14 I. Key Immigration Considerations Federal Tax Residency What is a US Person? US citizen Resident alien Substantial presence test Lawfully admitted for permanent residence (green card) First year election Required to report and pay US federal income tax on worldwide income

15 I. Key Immigration Considerations Federal Tax Residency Resident Alien Substantial presence test Must be in the US for at least 31 days in current year; and Sum of physical days present in the US during last 3 years equals or exceeds 183 days using multiplier fraction: Current year 1 x number of days Prior year 1/3 x number of days 2 nd prior year 1/6 x number of days. Residency start date begins on first day during in current calendar year present in US.

16 I. Key Immigration Considerations Federal Tax Residency Resident Alien Substantial presence test Example: Juan is in the US for 120 days currently, and 100 days during each of the previous 2 years: Current year 1 x 120 days = Prior year 1/3 x 100 days = nd prior year 1/6 x 100 days = 16.6 (rounded) = 170 days Juan may remain in US for another 12 days without becoming a US person under substantial presence test. If 182 days exceeded, residency start date begins first day present in US during current year.

17 I. Key Immigration Considerations Federal Tax Residency Resident Alien Lawfully admitted for permanent residency in US (green card) Residency start date begins on first day present in US as a lawful permanent resident if substantial presence test not met. If substantial presence test met, residency start date begins on first day present in the US during calendar year.

18 I. Key Immigration Considerations Federal Tax Residency Resident Alien First year election (all must apply): Not a resident alien under substantial presence test or lawfully admitted for permanent residency in election year; Not a resident alien in last prior year; Will be resident alien under substantial presence test in year after making the election; and Present in US 31 or more consecutive days in election year Also a 75% calculation of continuous presence in US begins on 1 st day of such 31 day testing period.

19 I. Key Immigration Considerations Federal Tax Residency Non Resident Alien Exceptions to days of presence in US under Substantial Presence Test Closer connection exception Exempt individuals Unable to leave US due to illness while present Treaty tie breaker position In transit between 2 non US points Employment in US but commuting regularly from residence in Canada or Mexico.

20 I. Key Immigration Considerations Federal Tax Residency An Alien Individual seeking to avoid a Tax Home in the US (if qualified under 7701(b)), may establish a closer connection to a foreign country based upon the facts and circumstances. A Closer Connection may be established: Location of permanent home and family Location of personal belongings Location of social, political, cultural or religious organizations Location of where business activities are conducted Location of a driver s license Location of voting Location of residence indicated on forms and documents, e.g. bank accounts Official Forms: such as a W 8

21 I. Key Immigration Considerations Federal Tax Residency Non Resident Alien (cont.) Closer Connection Less than 183 days in US during current year. Tax home in foreign country during current year. Closer connection to tax home country than in US Permanent home, Family, Personal property, Affiliations (church, political, cultural, etc.) in tax home, Business activities, banking, drivers, license, voting.

22 I. Key Immigration Considerations Federal Tax Residency Non Resident Alien (cont.) Closer Connection For 1 year, may claim closer connection in 2 foreign countries if: Tax home in 1 foreign country, Changes tax home to second foreign country; Maintains tax home in 2 nd country, and Closer connection in 2 nd foreign country than in US.

23

24

25 I. Key Immigration Considerations Federal Tax Residency Non Resident Alien (cont.) Exempt Individuals Days of presence not counted if: Diplomat/consular visa A visa (full time service) Teacher or Trainee J visa (if 872(b)(3) compensation, limitations apply) Student F visa (5 year limitation unless certain conditions apply) Professional athlete/entertainer (only charitable event days excludable)

26 I. Key Immigration Considerations Federal Tax Residency Non Resident Alien (cont.) Medical Condition Days of presence exempt only if: Condition occurs during time in US Only days unable to leave will be exempt Exemption will not apply if pre existing medical condition known before traveling to US and get ill while in US. Facts and circumstances test

27 I. Key Immigration Considerations Federal Tax Residency Income Tax Treaties Effect of tax treaties Dual Status Aliens Overriding Article 4 (Including Green Card Holders) Portuguese Citizen Green Card Holders Residing in Portugal PLR

28 I. Key Immigration Considerations Federal Tax Residency Treaty Tie Breaker Rule Dual resident taxpayer of US and treaty country. Permanent home country takes precedence for taxation. If permanent homes in both countries: Country where personal/economic relations are closer ( center of vital interests ). If center of vital interests available in both countries, country where individual generally spends most time ( habitual abode ).

29 I. Key Immigration Considerations Federal Tax Residency Treaty Tie Breaker Rule (Cont.) Resident alien for all purposes of the Internal Revenue Code other than computing US income tax liability. Nonresident alien: 30% Withholding required on US fixed, determinable, annual or periodic income ( FDAP income). US Person: Residency time periods apply. US person: Controlled foreign corporation status applies.

30 I. Key Immigration Considerations Federal Tax Residency Treaty Tie Breaker Rule (Cont.) Temporally Visiting Alien Form 8833 (Treaty Based Return Position Disclosure under Section 6114 or 7701(b)) Attach to 1040NR by due date (including extensions). Must report worldwide income even if not taxable in US on such income. Must file a tax return (1040NR) even if not otherwise required. Must file information forms reporing foreign interests

31

32 Residency Status for U.S. Income Tax Purposes Who is a Foreign Person? Individual Non Resident Aliens Substantial Presence Test I.R.C. 7701(b)(7)(B) Exception depending on Immigration status Visa Holders J, Q, F, and M visas (Students, trainees, Non academic students, exchange visitors, and their spouses or dependants). Certain diplomatic or consular visas/status. Professional athletes to compete in charitable sports events. Filling of Form 8843 to exclude days of presence (even if no income was obtained). Limitation I.R.C. 7701(b)(5)(e). Maintenance and compliance of visa requirements (IRS rather than INS). Commuters from Canada or Mexico Exception of closer connection to a foreign country.

33 I. Key Immigration Considerations Federal Tax Residency Who is a Foreign Person? Individual Non Resident Aliens Not Green Card Holders Treas. Reg. Section (b) 1(b) Not U.S. Citizens. Non Residency is presumed. Treas. Reg. Section (b)

34 I. Key Immigration Considerations State Tax Residency Every State is Different. California Tax Residency Differs from Federal Rules No Tax Treaty Protection Possible California tax residency (worldwide taxation) and no Federal tax residency

35 I. Key Immigration Considerations Summary of Visa Status and Tax Residency

36 I. Key Immigration Considerations Summary of Visa Status and Tax Residency

37 I. Key Immigration Considerations Summary of Visa Status and Tax Residency

38 I. Key Immigration Considerations Summary of Visa Status and Tax Residency

39 I. Key Immigration Considerations Summary of Visa Status and Tax Residency

40 International Tax Issues Not Just for International Tax Lawyers II. Overview of Different Tax Systems 40

41 II. Overview of Different Tax Systems: A Global Perspective People of different countries, different laws, different cultures have very different views, understanding (lack of understanding) and perceptions of what is a taxation system. 41

42 II. Overview of Different Tax Systems: A Global Perspective The United States imposes taxation on worldwide income for individuals who are citizens living throughout the world (and some LPRs). There are approximately 320 million residents in the United States which only represents about 4% of the total approximate 7.2 billion world population. FATCA imposes its rules throughout the world, in the countries where the rest of the 6.9 billion of the world population resides. 42

43 II. Overview of Different Tax Systems A Global Perspective No one has precise statistics of the number of United States citizens living outside of the United States, which is estimated to be between 5 to 7M according to the state department and the Taxpayers Advocate office. Also, there are currently in excess of 13 million lawful permanent residents, and no one knows exactly how many of those live outside the U.S. See, Martin, P. 'Accidental Americans' Rush to Renounce U.S. Citizenship to Avoid the Ugly U.S. Tax Web, CCH International Tax Journal, Nov./Dec. 2012, Vol. 38 Issue 6. 43

44 II. Overview of Different Tax Systems A Global Perspective Individual residence based income taxation. The vast majority of countries impose taxation on worldwide income, if the individual is resident in that country. E.g., France, Canada, Brazil, China, Germany, Australia, Mexico, Spain, Bulgaria, Denmark, Israel, Liechtenstein, Netherlands, Japan, Switzerland, Taiwan, etc. Territorial Sourced based income taxation. Some impose on only the income from sources within that country. E.g., Singapore, Hong Kong, Costa Rica, Panama, Paraguay, etc. No income tax. Some countries have no income tax, such as Qatar, United Arab Emirates, Bermuda, Kuwait, BVI, etc. Individual citizenship based income taxation. The U.S. for all practical purposes, is the only country in the world that imposes worldwide income taxation on citizens regardless of where they might reside (and some lawful permanent residents if not in a treaty country). 44

45 II. Overview of Different Tax Systems for Individuals Global

46 II. Overview of Different Tax Systems A Global Perspective Current United States passports currently has a page reference in paragraph D to taxation obligations of citizenship which is just inside the back page cover on newer passports See Co-author. Tax Simplification: The Need for Consistent Tax Treatment of All Individuals (Citizens, Lawful Permanent Residents and Non-Citizens Regardless of Immigration Status) Residing Overseas, Including the Repeal of U.S. Citizenship Based Taxation, by Patrick W. Martin and Professor Reuven Avi-Yonah, September

47 International Tax Issues Not Just for International Tax Lawyers III. Pre-Immigration Planning 47

48 III. Pre-Immigration Planning: Check the Box Issues planning (corporate liquidations prior to immigration, etc.) When is it relevant under the regulations? Closely Held Companies and Partnerships USRPHCs CFC Trigger Schedule O PFIC Analysis 48

49 III. Pre-Immigration Planning: Pre Immigration Gifts to Immigrant Acceleration of Foreign income gains (limit exposure to U.S. income by increasing basis) Trusts Gifting and Transfers Careful of IRC Section 679(a)(4) Creates Defective Grantor Trust Coming to America: The Throwback Tax s Ugly Head The Non Resident Alien Cum Resident as Beneficiary of Accumulated Income California conformity (?) to IRC Section 679(a)(4) 49

50 III. Pre-Immigration Planning: Controlled Foreign Corporation CFCs CFCs are closely held foreign corporations First, must determine if the entity is a corporation or a trust; e.g., see IRS 2009 memorandum Entity Classification of Liechtenstein Anstalts and Stiftungs) Greater than 50% of the shares (vote or value) are owned by U.S. persons Subpart F income of the CFC is generally deemed to be distributed to the U.S. shareholders 50

51 III. Pre-Immigration Planning: Controlled Foreign Corporation? Greater than 50% of the shares (vote or value) are owned by U.S. persons? 51

52 III. Pre-Immigration Planning: PFIC or Controlled Foreign Corporation? PFICs have no minimum ownership requirements; Asset or Income Test is the Key 52

53 International Tax Issues Not Just for International Tax Lawyers IV. Tax Residency Under U.S. Law 53

54 IV. Tax Residency Under U.S. Law (The Basics Fundamentally Important) NRAs for Income Tax Purposes USCs Tax Treaties Impact Savings Clauses Domiciled for Transfer Tax Purposes 54

55 IV. Tax Residency Under U.S. Law Focus is often on U.S. resident taxpayers U.S. citizens residing in the U.S. Non U.S. citizens residing in the U.S. Lawful permanent residents (LPRs) residing in the U.S. Visa holders residing in the U.S. (may be nonresident alien) Different tax treatment for F, J, M, or Q visas, etc. Persons residing outside the U.S. U.S. citizens LPRs Section 7701(b)(6) tax treaty countries See, Countries with U.S. Income Tax Treaties & Lawful Permanent Residents ( Oops Did I Expatriate?) Substantial Presence Test versus Closer Connection 55

56 IV. Tax Residency Under U.S. Law: Nonresident aliens Consequences of Failing to Timely File U.S. Tax Returns Generally, the same rule that applies to foreign corporations applies to nonresident aliens (i.e., a true and accurate tax return must be timely filed or lose deductions). Similar to the foreign corporation rule, the statute (IRC Section 874) does not explicitly provide that the nonresident alien s tax return must be timely filed. Unlike the deadline for foreign corporations, the return must be filed with 16 months of the due date, not 18 months as allowed for foreign corporations. IRC Section 874(a); Treas. Reg. Section (b)(1). 56

57 IV. Tax Residency Under U.S. Law: Nonresident aliens Consequences of Failing to Timely File U.S. Tax Returns Exception: Taxpayer acted reasonably and in good faith by not filing a U.S. tax return (or protective tax return) within the 16 month time limit. Treas. Reg. Section (b)(4). The due date for filing an income tax return (Form 1040NR) is generally June 15th unless U.S. wages were earned. IRC Section 6072(c); Treas. Reg. Section (c). Generally, a nonresident alien individual must file a Form 1040NR if either: 1) they earned U.S. source income; or 2) if engaged in a U.S. trade or business (personally or deemed to be so through a partnership engaged in a U.S. trade or business). IRC Sections 6012(a) and

58 IV. Taxing Residency under U.S. Law Worldwide Taxation of Income Estate and Gift Taxation of Residents? Information Return Requirements FBAR, FATCA, Section 6038 et. seq., etc. CFC/5471 PFIC IRS Form 8621 Lots of Reporting Requirements 58

59 IV. Taxing Residency under U.S. Law : U.S. Estate and Gift Taxes US system of estate, gift and generation skipping transfer taxation on a worldwide basis of US citizens US system of estate, gift and generation skipping transfer taxation on a worldwide basis of lawful permanent residents; but only for those who are domiciled in the United States. A person acquires a domicile in a place by living there, for even a brief period of time, with no definite present intention of later removing therefrom. Residence without the requisite intention to remain indefinitely will not suffice to constitute domicile, nor will intention to change domicile effect such a change unless accompanied by actual removal.[1]. [1] See,Treas. Reg

60 IV. Taxing Residency under U.S. Law : U.S. Estate and Gift Taxes Revenue Ruling Person will be presumed domiciled in the U.S. if he/she: has the legal capacity to form intent necessary to establish domicile; Must have expressed and displayed intent to make U.S. his/her home without intent to leave; and Person must be physically present in the United States. Presumption of domicile can be rebutted in the U.S. Revenue Ruling applied to a decedent who entered the U.S. illegally without a visa Revenue Ruling deals with persons who are temporary visitors present in the U.S. at the time of death (found not domiciled) 60

61 IV. Taxing Residency under U.S. Law : Reporting International Assets IRS reiterated earlier this year in IR IRS Reminds Those with Foreign Assets of U.S. Tax Obligations: The Internal Revenue Service reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2013, that they may have a U.S. tax liability and a filing requirement in

62 IV. Taxing Residency under U.S. Law : Reporting International Assets IR (Cont.) IRS Reminds Those with Foreign Assets of U.S. Tax Obligations: The filing deadline is Monday, June 16, 2014, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Eligible taxpayers get one additional day because the normal June 15 extended due date falls on Sunday this year. To use this automatic two month extension, taxpayers must attach a statement to their return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for details. 62

63 IV. Taxing Residency under U.S. Law : Reporting International Assets U.S. citizens and Lawful permanent residents living outside the U.S. generally have additional tax and financial account (from the Bank Secrecy Act BSA ) reporting requirements. These filings are typically unique for persons who reside in their home country compared to those who reside in the U.S. Title FBAR Regulations expanded definition of persons subject to FBARS to include LPRs with reference to Title 26. For more details on these reporting obligations see Blog: expatriation.com/ 63

64 IV. Taxing Residency under U.S. Law : Reporting International Assets USCs and LPRs, including those residing outside the U.S. will typically have unique tax reporting requirements due to assets and income from outside the U.S. Some of these include the following: Foreign Earned Income Exclusion IRS Form 2555, Foreign Earned Income Foreign Tax Credits The calculation is complex and is ultimately reported on IRS Form 1116 and must be attached to the income tax return, which will always be IRS Form Form 1040 for U.S. citizens and LPRs who reside in a country with no U.S. income tax treaty; and could be IRS Form 1040NR for certain LPRs residing in a country with a U.S. income tax treaty. Passive Foreign Investment Companies (PFICs) IRS Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund. 64

65 IV. Taxing Residency under U.S. Law : Reporting International Assets Various Information Reporting of Transactions Gifts, Inheritances, Ownership in Foreign Corporations, etc. Ownership or signature authority over a foreign bank account Form 114 (Formerly TD F ) Report of Foreign Bank and Financial Accounts ( FBAR ) Receipt of large gifts from foreign persons (including inheritances from foreign estates) IRS Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts Ownership interest in a foreign corporation IRS Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations Ownership interest in a foreign partnership IRS Form 8865 Return of U.S. Persons With Respect to Certain Foreign Partnerships 65

66 IV. Taxing Residency under U.S. Law : Reporting International Assets Transfers of certain interests in a foreign partnership IRS Form 8865 Return of U.S. Persons With Respect to Certain Foreign Partnerships Transfers to a foreign trust IRS Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts Distributions from a foreign trust IRS Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts Transfers of assets to a foreign corporation IRS Form 926 Return by a U.S. Transferor of Property to a Foreign Corporation Officers and directors of certain foreign corporations IRS Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations 66

67 IV. Taxing Residency under U.S. Law : Reporting International Assets Ownership interest in and transfer of certain foreign disregarded entities IRS Form 8858 Information Return of U.S. Persons With Respect To Foreign Disregarded Entities U.S. citizens who renounce their citizenship and certain lawful permanent residents who abandon immigration status; IRS Form 8854 Initial and Annual Expatriation Statement Annual return of activities of a foreign trust with a U.S. owner IRS Form 3520 A Annual Information Return of Foreign Trusts with a U.S. Owner U.S. resident aliens who have specified foreign financial assets in a foreign country IRS Form 8938 Statement of Specified Foreign Financial Assets 67

68 IV. Taxing Residency under U.S. Law : Reporting International Assets A summary of potential penalties are set out below: IRS/TREASURY FORM Form 114 Electronically Filed (Formerly TD F ) Report of Foreign Bank and Financial Accounts ( FBAR ) POTENTIAL PENALTY EXPOSURE FOR FAILURE TO FILE AND REPORT INTERNATIONAL TRANSACTION US$10,000 for each failure to file 50% of the account balance for failure to file or US$100,000; civil penalty Up to $500,000 and up to 10 years in prison; criminal penalty IRS Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts IRS Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations IRS Form 8865 Return of U.S. Persons With Respect to Certain Foreign Partnerships Up to 25% of the value of the tax free gift or inheritance received from the foreign person US$10,000 for each failure to file; up to US$50,000 in total penalties US$10,000 for each failure to file 68

69 IV. Taxing Residency under U.S. Law : Reporting International Assets IRS/TREASURY FORM IRS Form 8865 Return of U.S. Persons With Respect to Certain Foreign Partnerships IRS Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts IRS Form 3520 Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts IRS Form 926 Return by a U.S. Transferor of Property to a Foreign Corporation IRS Form 5471 Information Return of U.S. Persons With Respect to Certain Foreign Corporations POTENTIAL PENALTY EXPOSURE FOR FAILURE TO FILE AND REPORT INTERNATIONAL TRANSACTION US$10,000 for each failure to file Up to 35% of the value of the transfer of properties to the foreign trust (even if the transfers are income taxfree) Up to 35% of the value of the distributions of properties received from the foreign trust (even if the distribution is not subject to income tax) 10% of the value of the property transferred up to US$100,000 maximum US$10,000 for each failure to file 69

70 IV. Taxing Residency under U.S. Law : Reporting International Assets IRS/TREASURY FORM POTENTIAL PENALTY EXPOSURE FOR FAILURE TO FILE AND REPORT INTERNATIONAL TRANSACTION IRS Form 8858 Information Return of U.S. Persons With Respect To Foreign Disregarded Entities US$10,000 for each failure to file IRS Form 8854 Initial and Annual Expatriation Statement Various IRS Form 3520 A Annual Information Return of Foreign Trusts with a U.S. Owner 5% of the gross value of the trust assets (even if there is no taxable income) IRS Form 8938 Statement of Specified Foreign Financial Assets US$10,000 for each failure to file 70

71 IV. Taxing Residency under U.S. Law : Reporting International Assets Fake FATCA passed legislation IRC Section 6038D that created IRS Form 8938 Statement of Specified Foreign Financial Assets and became part of the law for 2011 tax year filings in Temporary regulations D 1T(b) through D 8T(g). The Real FATCA (Chapter 4) reporting of U.S. account information to the IRS by foreign financial institutions (FFIs) and non financial foreign entities (NFFEs e.g., private companies); account number, name, income information on worldwide income and sources (both of individual accounts and for various company, trust or other entity held accounts with substantial U.S. owners ) 71

72 IV. Taxing Residency under U.S. Law : W-8s, W-7s, and W-9s Purpose: Identify residence, type of income and withhold accordingly. Forms W 7 form or Social security Number? W 9: U.S. Persons W 8 s: Non U.S. Persons W 8 BEN Foreign Beneficial Owner W 8 ECI Effectively Connected Income W 8 IMY Intermediary Doc. # v3 72

73 IV. Taxing Residency under U.S. Law : W-8s, W-7s, and W-9s How to file a W 8? When should it be filed? Expiration. IRS Form 1042 Foreign Person s Source Income Subject to Withholding Reporting that flows from W 8 s and W 9 s Presumably now also from W 8 BENE Doc. # v3 73

74 International Tax Issues Not Just for International Tax Lawyers V. 2014Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures 74

75 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures Steps in Process: 1) Pre Clearance; 2) Disclosure Letter & Attachments; and 3) Submission. Taxpayer applying to the program is now required to provide additional information and the form and substance of nearly all of the documents associated with the OVDP, including the preclearance request, the Intake Letter, the Attachment(s) and other material are now different. Reduced penalties for certain taxpayers under 2012 OVDP FAQ 52 & 53 are now eliminated in light of expanded SFCP for non willful taxpayers. 75

76 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) OVDP participants will now be required to pay the offshore penalty at the time of the OVDP submission. As of August 4, 2014, the IRS is also increasing the offshore penalty for certain taxpayers from 27.5% to 50%. Such increase will generally apply to taxpayers who submit their request for pre clearance only after it becomes publicly known that one of the financial institutions where the taxpayer maintained (or continues to do so) an account or another party facilitating taxpayer s offshore arrangement is under investigation by the IRS or the Department of Justice. 76

77 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) Source IRS 2009 OVDP 2011 OVDI 2012 OVDP 2014 OVDP CI protection Yes Yes Yes Yes Information required for preclearance by CI Name, address, date of birth, and TIN Name, address, date of birth, and TIN Name, address, date of birth, and TIN Name, address, date of birth, TIN, telephone number, identifying information of all financial institutions at which undisclosed accounts were held, and identifying information of all foreign and domestic entities (e.g., corporations, partnerships, LLCs, trusts, foundations) through which undisclosed accounts were held Penalty terms Miscellaneous Title 26 offshore penalty of 20% in lieu of other applicable penalties Miscellaneous Title 26 offshore penalty of 25% in lieu of other applicable penalties Reduced penalty of 5% offered to taxpayers meeting certain criteria deemed to be non willful conduct Reduced penalty of 12.5% for taxpayers with accounts with balances below $75,000 Miscellaneous Title 26 offshore penalty of 27.5% in lieu of other applicable penalties Reduced penalty of 5% offered to taxpayers meeting certain criteria deemed to be non willful conduct Reduced penalty of 12.5% for taxpayers with accounts with balances below $75,000 Covered period 6 years 8 years 8 years 8 years Closing agreement Yes Yes Yes Yes Relief for taxpayers who did not timely elect to defer U.S. income tax on undistributed income earned by certain registered Canadian retirement and savings plans No No Yes Yes Miscellaneous Title 26 offshore penalty of 27.5% in lieu of other applicable penalties After August 4, 2014, the miscellaneous offshore penalty increases to 50% if the taxpayer has or had an undisclosed foreign financial account held at a foreign financial institution or if the account was established with the help of a facilitator where the institution or facilitator has been publicly identified as being under investigation or cooperating with a government investigation.

78 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) Source IRS Expanded Streamlined Filing Compliance Procedures 2012 Streamlined Filing Compliance Procedures U.S. Persons Living Outside the United States U.S. Persons Living Inside the United States Eligibility Non Resident U.S. taxpayers who have resided outside of the U.S. since January 1, 2009 who have not filed a U.S. tax return during the same period Individuals who are U.S. citizens or lawful permanent residents (i.e. green card holders ): Individual U.S. citizens or lawful permanent residents (or estates of U.S. citizens or lawful permanent residents filing income tax returns on behalf of the decedent) may be eligible for the Streamlined Procedures if, in any one or more of the most recent three years for which the U.S. tax return due date (or properly applied for extended due date) is past, the individual did not have a U.S. abode and the individual was physically outside the United States for at least 330 full days. Individuals who are not U.S. citizens or lawful permanent residents (i.e. green card holders ): Individuals (or estates of individuals) who are not U.S. citizens or lawful permanent residents may be eligible for his procedure if, in any one or more of the last three years for which the U.S. tax return due date (or properly applied for extended due date) is past, the individual did not meet the substantial presence test of IRC section 7701(b)(3) Individual U.S. taxpayers (or estates of individual U.S. taxpayers,) may be eligible for these Streamlined Procedures if: (1) they are not eligible for treatment as a U.S. person living outside the United States; (2) they have previously filed a U.S. tax return for each of the most recent 3 years for which the U.S. tax return due date (or properly applied for extended due date) is past; and (3) they have failed to report the income from a foreign financial asset and pay tax as required by U.S. law and may have failed to file an FBAR and such failures resulted from non willful conduct. Taxpayer certification Taxpayer required to complete a questionnaire designed to allow IRS to risk assess submissions Taxpayer required to certify that failure to report offshore accounts was due to non willful conduct Taxpayer required to certify that failure to report offshore accounts was due to non willful conduct Risk assessment Penalty terms Submissions classified as high or low risk depending on the taxpayer s responses on a questionnaire; high risk submissions were sent to the field for examination Delinquency, accuracy related, and FBAR penalties waived No high/low risk assessment; all submissions are subject to existing audit selection criteria Delinquency, accuracy related, and FBAR penalties waived No high/low risk assessment; all submissions are subject to existing audit selection criteria 5% miscellaneous Title 26 offshore penalty imposed; all other penalties waived 78

79 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) Streamlined Filing Compliance Program Summary of Modifications to Streamlined Filing Compliance Procedures Expansion of the Streamlined Filing Compliance Procedures General Eligibility for SFCP Streamlined Foreign Offshore Procedures: SFOP Eligibility Streamlined Foreign Offshore Procedures: SFOP Submission Requirements 79

80 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) Streamlined Domestic Offshore Procedures: SDOP Eligibility Streamlined Domestic Offshore Procedures: SDOP Submission Requirements Streamlined Domestic Offshore Procedures: SDOP 5% Penalty IRS Comments on SFCP 80

81 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) 2014 Offshore Voluntary Disclosure Program Evolution of OVDP Summary of Significant Modifications to the 2012 Offshore Voluntary Disclosure Program 2014 Offshore Voluntary Disclosure Program 2014 OVDP: Preclearance Request 81

82 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) 2014 Offshore Voluntary Disclosure Program 2014 OVDP: Intake Letter and Attachments 2014 OVDP: Domestic Voluntary Disclosure 2014 OVDP: Penalties 2014 OVDP: Assets Subject to Offshore Penalty 2014 OVDP: FAQ 50 Penalty Relief 2014 FAQ 25 Submission Requirements 82

83 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) Transitional Rules for 2102 OVDP Participants Transitional Rules for OVDP Participants Qualifying for Expanded SFCP Transitional Rules: Eligibility Transitional Rules: Obtaining Transitional Relief Transitional Rules: Transitional Relief 83

84 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures (con t) Delinquent FBAR Submission Procedures Delinquent International Information Return Submission Procedures Summary of All Offshore Compliance Options 84

85 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) Non Willful Certification Under of Penalty of Perjury for new Streamlined Procedure. Still not entirely clear what willfulness means in the context of the 50% Civil Penalty. It is well established that willfulness can be established by circumstantial evidence. 85

86 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) Where to find the meaning of Willfulness in the Context of the 50% Civil FBAR Penalty: CCA , IRM, new stream lined procedure FAQs, and trilogy of FBAR cases Williams, McBride, and Zwerner. 86

87 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) IRM ( ) The test [well established in the criminal context] is whether there was a voluntary, intentional violation of a known legal duty. Examples are provided in the IRM. Willfulness is shown by the person's knowledge of the reporting requirements and the person's conscious choice not to comply with the requirements 87

88 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) IRM ( ) "Willful blindness" may be attributed to a person who has made a conscious effort to avoid learning about the FBAR reporting and recordkeeping requirements. (See IRM for documents used by the IRS to establish "willfulness. ) 88

89 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) New Streamlined Procedures FAQ Non willful conduct is conduct due to negligence, inadvertence, mistake, or conduct that is the result of a good faith misunderstanding of the requirements of the law. Burden of Proof: In CCA (2006), counsel for the IRS concluded that the government must prove "willfulness" in the context of FBAR civil penalties under the "clear and convincing standard (the same as with 75% civil fraud penalty). But see the trilogy of FBAR cases. 89

90 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) The trilogy of cases address the following: the government's burden of proof in FBAR cases is the lesser evidentiary standard, preponderance of the evidence, and not clear and convincing evidence standard; the government's ability to establish willfulness by demonstrating willful blindness ; the government's ability to establish willfulness by proving recklessness. In each of the trilogy of cases, the government did not have to prove the taxpayer had actual knowledge of the obligation to file the FBAR; willful blindness or recklessness was enough. 90

91 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) United States v. Williams (4th Cir. 2012) In an unpublished decision, Williams was found liable for the 50% FBAR penalty as to his Swiss accounts. Failed to disclose foreign accounts (checked no on Schedule B, line 7a). Bad fact: Previously, plead guilty to tax evasion as to the foreign accounts. Bad fact: Provided false answers on the tax organizer. The court found that the signature on the tax return is "prima facie evidence that the signer knew the contents of the tax return. The court found that William's undisputed actions established a minimum reckless conduct satisfying the willfulness requirement. 91

92 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) United States v. McBride (D. Utah 2012) Found liable for the 50% FBAR penalty. Preponderance of the evidence is the correct standard to apply. Bad fact: Engaged in a financial scheme to avoid reporting corporate income through offshore shell entities. Court found that "constructive knowledge" of the reporting requirement is imputed to taxpayers who sign their federal tax return." The court stated that "it is reasonable to assume that that a person who has foreign bank accounts would read the information specified in the government forms." The court noted that it is only in criminal cases in which ignorance of the law is a defense to willfulness. Very instructive 30 page opinion. 92

93 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) United States v. Zwerner (SD Florida 2013) Foreign accounts opened in 1960's through nominees (foundations) (before the FBAR filing requirements. Bad fact: Expressly represented to his tax return preparer that he had no financial interest in foreign accounts (accounts held in the names of certain foundations) Bad fact: Zwerner may have admitted in a signed letter that he was aware that he should have reported both the existence of the account and the income earned from it. 93

94 V Offshore Voluntary Disclosure Program and Streamlined Compliance Filing Procedures FBARs and the Meaning of Willfulness (con t) In a jury verdict, the IRS was successful in three (3) separate 50% FBAR penalties. $2.2 million penalty representing 145% of the accounts highest value of approximately $1.5 million. The 8th amendment argument was raised, but the case settled for Zwerner agreeing to pay penalties and interest for 2 out of 3 years. 94

95 International Tax Issues Not Just for International Tax Lawyers VI. Losing Residency 95

96 VI. Losing Residency Losing Residency is not the technical term. The technical tax terms in this area of the law are crucial; covered expatriate ; expatriation date ; long term resident ; covered bequest, covered gift, etc. 96

97 VI. Losing Residency Affirmative Act (All) Different Definition INA/Title 26 Process Administrative Inadvertent by Operation of Law Which law? Immigration or tax law? See for LPRs Topsnick v. Comm r, 143 T.C. 12 (September 23, 2014) and IRC Section 7701(b)(6) 97

98 VI. Losing Residency Immigration Perspective Formal Abandonment Proactively submit Form I 407 application at U.S. Embassy Abroad Relinquish green card to DHS or consular officer Determination of Abandonment Extended Periods of Travel Abroad U.S. Port of Entry is area of greatest risk for determination of abandonment Absence from the U.S. for one year or more should result in determination of abandonment of Permanent Residency

99 VI. Losing Residency Immigration Perspective (cont d) Determined to be Subject to a Ground of Inadmissibility or Removability listed in INA: Criminal Offenses, typically felonies but include minor crimes of moral turpitude Alcoholism resulting in multiple DUI s Family Violence National Security Grounds Communicable Diseases

100 VI. Losing Residency Immigration Perspective (cont d) Two Step Process to reenter the country Renounce Citizenship at U.S. Consulate Abroad Apply for a B 1/B 2 Visitor or Work Authorization Visa Considerations Renunciation is an irrevocable act Lose rights and privileges of U.S. citizenship Theoretical Possibility of being excluded from the U.S. (Yet Never Has Happened) May have no effect on U.S. tax or military service obligations

101 VI. Losing Residency Tax Perspective Lots of Technical Considerations Lots of Traps for the Unwary expatriation.com/ 101

102

103 VI. Losing Residency Tax Perspective Published Names of Former U.S. Citizens Quarterly Publication of Individuals, Who Have Chosen To Expatriate, as Required by Section 6039G A Notice by the Internal Revenue Service This notice is provided in accordance with IRC section 6039G of the Health Insurance Portability and Accountability Act (HIPPA) of 1996, as amended. This listing contains the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary received information during the quarter ending September 30, For purposes of this listing, long term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United States who lost citizenship. 103

104 VI. Losing Residency Source U.S. Treasury Data (Compiled by Patrick W. Martin, Esq. of Procopio) 104

105 VI. Losing Residency Politically Charged Topic: Losing LPR or USC Status Legislative Proposals House (H.R. 6263) The bill, known as the "Commission on Americans Living Abroad Act" is cosponsored by Reps. Michael M. Honda (D CA) and Charles B. Rangel (D NY). US system of income taxation on a worldwide basis of lawful permanent residents. Key override for residents in a country with a US income tax treaty. The tiebreaker rules.

106 International Tax Issues Not Just for International Tax Lawyers VII. Effects of Losing Residency 106

107 VII. Effects of Losing Residency Losing LPR or USC Status No statute of limitations for persons who filed no U.S. tax returns. Statute commences upon filing of a return. Special income tax consequences for those who renounced US citizenship. The law has changed significantly over the last 20 years, beginning in 1996, 2004, and most recently in

108 VII. Effects of Losing Residency Taxation Perspective Different Definitions 108

109 VII. Effects of Losing Residency Losing LPR or USC Status Various Traps and Technical Requirements: Why a "long term" LPR can NEVER avoid "Covered Expatriate" status under IRC Section 877A(g)(1)(B) if Asset or Tax Liability Test is Satisfied! Certification Requirement of Section 877(a)(2)(C) (5 Years of Tax Compliance) and Important Timing Considerations per the Statute Why the FBAR (late filed or never filed) is not a requirement for the Certification Requirement of Section 877(a)(2)(C) (5 Years of Tax Compliance) 109

110 VII. Effects of Losing Residency Losing LPR or USC Status Special rule for certain lawful permanent residents. Timing Issues: IRC Section 7701(b)(6) Special estate, gift and generation skipping transfer tax consequences for those who renounced US citizenship. Section 2801: covered gifts and covered bequests The Tax that Keeps on Giving (Taking) the Forever Taint 110

111 VII. Effects of Losing Residency Losing LPR or USC Status One of the greatest traps for the unwarry is how Section 877(a)(2)(C) can cause even the most economically modest person to become a "covered expatriate" with the adverse tax and reporting requirements that follow. The "Hidden Tax" of Expatriation Section 2801 and its "Forever Taint." 111

112 VII. Effects of Losing Residency Losing LPR or USC Status IRS Form 8854 Planning the tax consequences of expatriation along with the immigration consequences. How to get back into the United States. 112

113 VII. Effects of Losing Residency Losing LPR or USC Status Myths about the tax consequences of expatriation. You will be barred from reentry. The law in 1996 versus the law from No future U.S. Tax if U.S. Citizenship is abandoned. An affirmative act is required: versus by Operation of Law. 113

114 VII. Effects of Losing Residency Losing LPR or USC Status Myths about the tax consequences of expatriation. There is a 10 year period of U.S. income taxation after renouncing citizenship U.S. citizens do not need to renounce their U.S. citizenship if they want to cease being U.S. income tax residents if they live in a country with an income tax treaty with the U.S.; since the tie breaker rules of residency will keep them from being U.S. income tax residents. Must show no tax motivation when renouncing U.S. citizenship 114

The I.R.S. Amnesty Program & The New Streamlined Filing Compliance Procedures

The I.R.S. Amnesty Program & The New Streamlined Filing Compliance Procedures TOPICS IN THE SEMINAR INCLUDE: The I.R.S. Amnesty Program & The New Streamlined Filing Compliance Procedures By Richard S. Lehman, Esq. TAX ATTORNEY www.lehmantaxlaw.com SEMINAR INTRODUCTION by Richard

More information

What s News in Tax Analysis That Matters from Washington National Tax

What s News in Tax Analysis That Matters from Washington National Tax What s News in Tax Analysis That Matters from Washington National Tax Have Undisclosed Foreign Assets? IRS Offers Options There is good news for individuals who inadvertently failed to fulfill tax and

More information

Panel. U.S. and Mexican Taxation of Individuals Residing Abroad

Panel. U.S. and Mexican Taxation of Individuals Residing Abroad Panel U.S. and Mexican Taxation of Individuals Residing Abroad Diana S. Davis, Esq., Of Counsel, Greenberg Traurig, LLP Kenneth Guilfoyle, CPA, Expatriate Services Practice Leader, BDO Seidman, LLP U.S.

More information

Corrective U.S. Tax Compliance for Dual Status and Foreign Taxpayers Andrew Bernknopf, Esq., Member:

Corrective U.S. Tax Compliance for Dual Status and Foreign Taxpayers Andrew Bernknopf, Esq., Member: Corrective U.S. Tax Compliance for Dual Status and Foreign Taxpayers Andrew Bernknopf, Esq., Member: This article provides an overview of corrective United States tax compliance measures for individuals

More information

US Tax Issues for Canadian Residents

US Tax Issues for Canadian Residents US Tax Issues for Canadian Residents SPECIAL REPORT US Tax Issues for Canadian Residents The IRS has recently declared new catch up filing procedures for non-resident US taxpayers who are considered innocent

More information

Tax and Legal Issues for Canadian Snowbirds: What you need to know

Tax and Legal Issues for Canadian Snowbirds: What you need to know Tax and Legal Issues for Canadian Snowbirds: What you need to know Steven Sitcoff T: 514 875-3561 ssitcoff@spiegelsohmer.com October, 2014 Disclaimer What follows is for general informational purposes

More information

Ellen Harrison. Philadelphia Estate Planning Council ( PEPC ) October 21, 2014

Ellen Harrison. Philadelphia Estate Planning Council ( PEPC ) October 21, 2014 Ellen Harrison Philadelphia Estate Planning Council ( PEPC ) October 21, 2014 Topics to be covered Who and what is foreign under the Code and treaties US taxation of citizens regardless of residency Limited

More information

TAX CONSEQUENCES FOR U.S. CITIZENS AND OTHER U.S. PERSONS LIVING IN CANADA

TAX CONSEQUENCES FOR U.S. CITIZENS AND OTHER U.S. PERSONS LIVING IN CANADA March 2015 CONTENTS U.S. income tax filing requirements Non-filers U.S. foreign reporting requirements Foreign trusts Foreign corporations Foreign partnerships U.S. Social Security U.S. estate tax U.S.

More information

US Citizens Living in Canada

US Citizens Living in Canada US Citizens Living in Canada Income Tax Considerations 1) I am a US citizen living in Canada. What are my income tax filing and reporting requirements? US Income Tax Returns A US citizen residing in Canada

More information

Residency for U.S. Income Tax Purposes by Jo Anne C. Adlerstein

Residency for U.S. Income Tax Purposes by Jo Anne C. Adlerstein Copyright 2014, American Immigration Lawyers Association. Reprinted, with permission, from AILA s Immigration Practice Pointers (2014 15 Ed.), AILA Publications, http://agora.aila.org. Residency for U.S.

More information

Top 10 Tax Considerations for U.S. Citizens Living in Canada

Top 10 Tax Considerations for U.S. Citizens Living in Canada Top 10 Tax Considerations for U.S. Citizens Living in Canada Recent Canadian media reports have estimated that there are approximately one million U.S. citizens living in Canada and that a relatively low

More information

international tax issues and reporting requirements

international tax issues and reporting requirements international tax issues and reporting requirements Foreign income exclusions and foreign tax credits can significantly reduce the taxes you pay on foreign sourced income and help you avoid double taxation.

More information

Estate Planning for the International Client

Estate Planning for the International Client Estate Planning for the International Client Brenda Jackson-Cooper Doug Andre March 24, 2015 I. Rules and Definitions Agenda II. Estate Planning Case Studies III. Questions 2 Effects of U.S. transfer tax

More information

Handling IRS Targeted Audits, Voluntary Disclosures and Reporting Foreign Assets. Presentation Roadmap

Handling IRS Targeted Audits, Voluntary Disclosures and Reporting Foreign Assets. Presentation Roadmap Handling IRS Targeted Audits, Voluntary Disclosures and Reporting Foreign Assets Elizabeth Copeland 210.250.6121 elizabeth.copeland@strasburger.com Farley Katz 210.250.6007 farley.katz@strasburger.com

More information

International Tax. Las Vegas, Nevada December 4-5, 2012

International Tax. Las Vegas, Nevada December 4-5, 2012 International Tax 4 th Annual Southwest Tax Conference Las Vegas, Nevada December 4-5, 2012 Brian Phillip Lau Cindy Hsieh br@rowbotham.com plau@rowbotham.com chsieh@rowbotham.com 101 2 nd Street, Suite

More information

Overview of 2011 IRS Offshore Voluntary Disclosure Initiative

Overview of 2011 IRS Offshore Voluntary Disclosure Initiative Overview of 2011 IRS Offshore Voluntary Disclosure Initiative Attorney Morris N. Robinson, CPA, LLM M. Robinson & Company MassTaxLawyers.com 160 Federal Street Boston, MA 02110 617/ 428-6900 1 M. Robinson

More information

Foreign Financial Account & Asset Reporting: FinCen (FBAR) v. FATCA

Foreign Financial Account & Asset Reporting: FinCen (FBAR) v. FATCA Foreign Financial Account & Asset Reporting: FinCen (FBAR) v. FATCA Presented by David J Lewis, Attorney, of Krugliak, Wilkins, Griffiths & Dougherty Co. LPA and Patricia L Gibbs, CPA, of CBIZ MHM September

More information

Immigrating to the USA: effective wealth planning Charles P LeBeau, Attorney, San Diego, California, USA

Immigrating to the USA: effective wealth planning Charles P LeBeau, Attorney, San Diego, California, USA Immigrating to the USA: effective wealth planning Charles P LeBeau, Attorney, San Diego, California, USA Although considerations will vary widely depending on the circumstances of the specific non-resident

More information

Immigration and Taxation

Immigration and Taxation Immigration and Taxation Immigration, Employment and Tax Laws Why do immigrants without status pay taxes? Obligated by law Opportunity to contribute Document compliance and residency Immigration, Employment

More information

New York Law School April 24, 2015. Professor Alan I. Appel New York Law School

New York Law School April 24, 2015. Professor Alan I. Appel New York Law School Undisclosed Foreign Accounts: IRS Investigations, Audits, OVDP and Streamlined Disclosures The Lawyer s Role in Guiding the Taxpayer through Perilous Waters New York Law School April 24, 2015 Professor

More information

Foreign Account Tax Compliance Act ( FATCA ) How Does It Affect NFFEs and Individuals

Foreign Account Tax Compliance Act ( FATCA ) How Does It Affect NFFEs and Individuals Foreign Account Tax Compliance Act ( FATCA ) How Does It Affect NFFEs and Individuals May, 2012 2008 Venable LLP 1 agenda Overview FATCA and NFFEs FATCA and Individuals US Information Reporting for US

More information

Your Taxes: IRS grants 3-week extension for its tax-amnesty program

Your Taxes: IRS grants 3-week extension for its tax-amnesty program Your Taxes: IRS grants 3-week extension for its tax-amnesty program Sep. 22, 2009 KEVIN E. PACKMAN and LEON HARRIS, THE JERUSALEM POST This article is an urgent update for US taxpayers... and it comes

More information

Pre-Immigration Income Tax Planning

Pre-Immigration Income Tax Planning PART OF THE LEHMAN TAX LAW KNOWLEDGE BASE SERIES United States Taxation Of Investors Pre-Immigration Income Tax Planning By Richard S. Lehman Esq. TAX ATTORNEY www.lehmantaxlaw.com Richard S. Lehman Esq.

More information

FOREIGN INCOME, ASSETS, AND IRS AMNESTY PROGRAMS

FOREIGN INCOME, ASSETS, AND IRS AMNESTY PROGRAMS FOREIGN INCOME, ASSETS, AND IRS AMNESTY PROGRAMS Ahuja & Clark, PLLC By: Madhu Ahuja, CPA, CVA, CFE Ravi Modi, CPA www.ahujaclark.com WHO IS SUBJECT TO TAX FILING REQUIREMENTS? U.S. Citizen and Green Card

More information

Presentation by Jennifer Coates for the American Immigration Lawyers Association

Presentation by Jennifer Coates for the American Immigration Lawyers Association Tax Issues for Non- Citizens What Immigration Lawyers Need to Know Presentation by Jennifer Coates for the American Immigration Lawyers Association Principal, Jenny Coates Law, PLLC Seattle and Bainbridge,

More information

Nuts & Bolts of Cross Border Tax Issues

Nuts & Bolts of Cross Border Tax Issues Nuts & Bolts of Cross Border Tax Issues Central Arizona Estate Planning Council November 2, 2015 Presented by: Certified Public Accountant Attorney at Law 1 Overview What is an International Tax Practice?

More information

DISCLAIMER. The information contained in this presentation is current as of the date it was presented. It should not be considered official guidance.

DISCLAIMER. The information contained in this presentation is current as of the date it was presented. It should not be considered official guidance. DISCLAIMER The information contained in this presentation is current as of the date it was presented. It should not be considered official guidance. 1 INTRODUCTION This webinar is intended to provide basic

More information

Estate & Gift Tax Treatment for Non-Citizens

Estate & Gift Tax Treatment for Non-Citizens ADVANCED MARKETS Estate & Gift Tax Treatment for Non-Citizens It goes without saying that the laws governing the U.S. estate and gift tax system are complex. When you then consider the additional complexities

More information

57 th UIA CONGRESS Macau / China October 31 November 4, 2013 IMMIGRATION AND NATIONALITY LAW GLOBAL TRENDS ON CITIZENSHIP AND NATIONALITY

57 th UIA CONGRESS Macau / China October 31 November 4, 2013 IMMIGRATION AND NATIONALITY LAW GLOBAL TRENDS ON CITIZENSHIP AND NATIONALITY 57 th UIA CONGRESS Macau / China October 31 November 4, 2013 IMMIGRATION AND NATIONALITY LAW Saturday, November 2, 2013 GLOBAL TRENDS ON CITIZENSHIP AND NATIONALITY UIA 2013 THE TAX ISSUES PROMOTING, AND

More information

In February of 2011 the IRS announced a partial

In February of 2011 the IRS announced a partial Offshore Voluntary Disclosure The Next Generation By Dennis Brager Dennis Brager examines the next generation of partial tax amnesty for taxpayers who have failed to meet the myriad of disclosure requirements

More information

Tax Implications for US Citizens/Residents Moving to & Living in Canada

Tax Implications for US Citizens/Residents Moving to & Living in Canada Tax Implications for US Citizens/Residents Moving to & Living in Canada TAX Julia Klann & Domeny Wu March 20, 2014 Topics to Discuss Moving to Canada & Overview of Canadian & US Tax Systems US Filing Requirements

More information

Certification of Non-Willfulness Streamlined Filing Compliance Procedure

Certification of Non-Willfulness Streamlined Filing Compliance Procedure Certification of Non-Willfulness Streamlined Filing Compliance Procedure Article by: Mishkin Santa, LL.M, J.D. - Director of International Advisory & Legal Services The eligibility requirements for expanded

More information

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: Dean C. Berry, Partner, Cadwalader Wickersham & Taft, New York

Presenting a live 90-minute webinar with interactive Q&A. Today s faculty features: Dean C. Berry, Partner, Cadwalader Wickersham & Taft, New York Presenting a live 90-minute webinar with interactive Q&A Estate Planning Involving Resident and Non-Resident Aliens Navigating Estate, Gift and GST Tax Rules, and Leveraging Estate and Lifetime Gifting

More information

US Taxpayers Participating in Non US Retirement Plans: When is There an FBAR or FATCA Reporting Obligation?

US Taxpayers Participating in Non US Retirement Plans: When is There an FBAR or FATCA Reporting Obligation? February 29, 2012 Authors: Anubhav Gogna and David W. Powell If you have questions, please contact your regular Groom attorney or any of the attorneys listed below: Anubhav Gogna agogna@groom.com (202)

More information

Tax Issues For Non-Citizens (and some Citizens): Ten Myths, and Some Reality. Stephen McDonald, Seattle, WA Margaret Stock, Anchorage, AK

Tax Issues For Non-Citizens (and some Citizens): Ten Myths, and Some Reality. Stephen McDonald, Seattle, WA Margaret Stock, Anchorage, AK Tax Issues For Non-Citizens (and some Citizens): Ten Myths, and Some Reality Stephen McDonald, Seattle, WA Margaret Stock, Anchorage, AK Outline Myths About US Taxes Tax Implications for Foreign Investors

More information

Pre-Immigration Tax Planning and Post-Immigration Tax Compliance for EB-5 Investors

Pre-Immigration Tax Planning and Post-Immigration Tax Compliance for EB-5 Investors Pre-Immigration Tax Planning and Post-Immigration Tax Compliance for EB-5 Investors Alan Winston Granwell DLA Piper Steve Trow Trow & Rahal, PC This presentation is offered for informational purposes only

More information

TAX PRESENTATION. By Ronald R. Fieldstone, Esq. and Rebecca Abrams Sarelson, Esq. Arnstein & Lehr LLP

TAX PRESENTATION. By Ronald R. Fieldstone, Esq. and Rebecca Abrams Sarelson, Esq. Arnstein & Lehr LLP TAX PRESENTATION By Ronald R. Fieldstone, Esq. and Rebecca Abrams Sarelson, Esq. Arnstein & Lehr LLP 1 Table of Contents 1. Immigration Tax and EB-5 5 Planning (a) (b) (c) (d) (e) (f) Pre-departure planning

More information

Offshore Tax Evasion: US Initiatives

Offshore Tax Evasion: US Initiatives Scott D. Michel, Caplin & Drysdale This Article discusses the US reporting rules for US taxpayers with foreign accounts and assets (including FBAR and FATCA), the civil penalties for non-compliance with

More information

Income Tax and Social Insurance

Income Tax and Social Insurance The Global Employer: Focus on Global Immigration & Mobility Income Tax and Social Insurance An employee who works abroad is always concerned about the possibility of increased income taxation and social

More information

US Voluntary Disclosure

US Voluntary Disclosure what you need to know, and how we can help US Voluntary Disclosure what you need to know, and how we can help www.withersworldwide.com www.withersworldwide.com Introduction Countries throughout the world

More information

8 THINGS YOU MUST KNOW BEFORE THE IRS CALLS YOU

8 THINGS YOU MUST KNOW BEFORE THE IRS CALLS YOU 8 THINGS YOU MUST KNOW BEFORE THE IRS CALLS YOU Contact Us Today to Schedule a Free Consultation. Call 866-784-0023 or visit www.mlhorwitzlaw.com 8 Things You Must Know Before the IRS Calls You What is

More information

PRE-IMMIGRATION INCOME TAX PLANNING, PART I: U.S. TAX RESIDENCE

PRE-IMMIGRATION INCOME TAX PLANNING, PART I: U.S. TAX RESIDENCE PRE-IMMIGRATION INCOME TAX PLANNING, PART I: U.S. TAX RESIDENCE Author Stanley C. Ruchelman Tags Closer Connection Test Green Card Test Pre-Immigration Planning Substantial Presence Test Residency Starting

More information

INTERNATIONAL TAX CONTROVERSY

INTERNATIONAL TAX CONTROVERSY INTERNATIONAL TAX CONTROVERSY BY MISHKIN SANTA PETER MITCHELL About Us Who we are What we do Why we re here Part I: International Tax Controversy Voluntary Disclosure Attorney-client privilege IRM 9.5.11.9

More information

DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND

DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND THE FRENCH REPUBLIC SIGNED AT WASHINGTON ON DECEMBER 8, 2004 AMENDING THE CONVENTION BETWEEN THE

More information

Increased IRS Tax Compliance Involving U.S. Citizens/Green Card Holders in Israel

Increased IRS Tax Compliance Involving U.S. Citizens/Green Card Holders in Israel Increased IRS Tax Compliance Involving U.S. Citizens/Green Card Holders in Israel October 2012 Tax Seminar Stuart M. Schabes, Esquire Ober, Kaler, Grimes & Shriver smschabes@ober.com 410-347-7696 (U.S.)

More information

March 28, 2012 India Tax Update

March 28, 2012 India Tax Update Silicon Valley March 28, 2012 India Tax Update Brian br@rowbotham.com (415) 433-1177 www.rowbotham.com U.S. Tax Reporting Challenges IRS Forms Penalties 5471 Foreign Corporation $10k per year per omission

More information

Original Frequently Asked Questions Posted May 6, 2009. 1. Why did the IRS issue internal guidance regarding offshore activities now?

Original Frequently Asked Questions Posted May 6, 2009. 1. Why did the IRS issue internal guidance regarding offshore activities now? Original Frequently Asked Questions Posted May 6, 2009 1. Why did the IRS issue internal guidance regarding offshore activities now? The IRS has had a voluntary disclosure practice in its Criminal Manual

More information

Radio X June 19 Broadcast Foreign Asset Reporting Questions & Answers

Radio X June 19 Broadcast Foreign Asset Reporting Questions & Answers Radio X June 19 Broadcast Foreign Asset Reporting Questions & Answers 1. What is the FBAR filing? FBAR is the acronym for the Foreign Bank Account Report that must be filed annually with the IRS to report

More information

Going to Combat for Your International Client: Avoiding Landmines and Other Hot Topics in 2012/2013

Going to Combat for Your International Client: Avoiding Landmines and Other Hot Topics in 2012/2013 Going to Combat for Your International Client: Avoiding Landmines and Other Hot Topics in 2012/2013 Presented to the Washington DC Estate Planning Council November 27, 2012 The City Club of Washington

More information

Expatriation - A Comparison of Tax Issues in the US & UK in an Increasingly Mobile World

Expatriation - A Comparison of Tax Issues in the US & UK in an Increasingly Mobile World Expatriation - A Comparison of Tax Issues in the US & UK in an Increasingly Mobile World Henry Christensen III Jay E. Rivlin www.mwe.com Boston Brussels Chicago Düsseldorf Frankfurt Houston London Los

More information

United States. A-Z of U.S. Estate Planning Concepts

United States. A-Z of U.S. Estate Planning Concepts United States A-Z of U.S. Estate Planning Concepts This glossary is directed mainly at the solicitor whose clients are American, have assets in America, or U.S. family members who are beneficiaries of

More information

Dispelling Fear! What are your fears?! - Criminal implications! - Cost of penalties! - Cost of getting compliant with advisors!

Dispelling Fear! What are your fears?! - Criminal implications! - Cost of penalties! - Cost of getting compliant with advisors! Dispelling Fear! What are your fears?! - Criminal implications! - Cost of penalties! - Cost of getting compliant with advisors! Do not fear the consequences, get the facts:! Each Individual is unique!

More information

New Challenges for Cross Border Travellers

New Challenges for Cross Border Travellers New Challenges for Cross Border Travellers 1 Presenters Bruce Harwood Immigration Individual Immigration & Family Reunification Saba Naqvi Individual Immigration & Family Reunification Bill Cooper Tax

More information

The IRS Is Looking For Non-Compliant Taxpayers With Foreign Interests: Is Your Taxpayer One Of Them?

The IRS Is Looking For Non-Compliant Taxpayers With Foreign Interests: Is Your Taxpayer One Of Them? The IRS Is Looking For Non-Compliant Taxpayers With Foreign Interests: Is Your Taxpayer One Of Them? Josh O. Ungerman and Anthony P. Daddino Each year, in the United States alone, offshore tax evasion

More information

U.S. TAX ISSUES FOR CANADIANS

U.S. TAX ISSUES FOR CANADIANS March 2015 CONTENTS Snowbirds Canadians owning U.S. rental properties Summary U.S. TAX ISSUES FOR CANADIANS If you own rental property in the United States or spend extended periods of time there, you

More information

Tax Management International Journal

Tax Management International Journal Tax Management International Journal Reproduced with permission from Tax Management International Journal, 43 TMIJ 604, 10/10/2014. Copyright 2014 by The Bureau of National Affairs, Inc. (800-372- 1033)

More information

FBAR Foreign Bank Account Reporting

FBAR Foreign Bank Account Reporting FBAR Foreign Bank Account Reporting ------------------------------------------------------------------------------------------------------------ Form TD F 90-22.1 is required when a U.S. Person has a financial

More information

Cross Border Issues Affecting Canadians Living in the USA

Cross Border Issues Affecting Canadians Living in the USA A Discussion of the Financial and Tax Aspects (Canadian and US) for Former Residents of Canada Living in the USA 1. What is your Current Status? a. Residency Status- Canada or US i. Canada- domicile (NR73

More information

ESTATE PLANNING FOR NON U.S. CITIZENS, By Yahne Miorini, LL.M.

ESTATE PLANNING FOR NON U.S. CITIZENS, By Yahne Miorini, LL.M. The term U.S. person includes U.S. individuals as well as domestic corporations and U.S. Trusts. An individual is a U.S. person if he or she is either: A U.S. citizen, regardless of residence (including

More information

Representing U.S.-Swiss Dual Passport Holders in IRS Voluntary Disclosure Cases

Representing U.S.-Swiss Dual Passport Holders in IRS Voluntary Disclosure Cases Volume 55, Number 9 August 31, 2009 Representing U.S.-Swiss Dual Passport Holders in IRS Voluntary Disclosure Cases by William M. Sharp Sr. and Natalie Peter Reprinted from Tax Notes Int l, August 31,

More information

EB-5 Immigrant Investor Program

EB-5 Immigrant Investor Program ` EB-5 Immigrant Investor Program The article documents the U.S. tax implications for foreign nationals participating in the EB-5 Immigrant Investor Program. EB-5 Program The EB-5 Immigrant Investor Program

More information

ADVISING THE FOREIGN PRIVATE CLIENT ON U.S. INCOME AND TRANSFER TAX PLANNING

ADVISING THE FOREIGN PRIVATE CLIENT ON U.S. INCOME AND TRANSFER TAX PLANNING ADVISING THE FOREIGN PRIVATE CLIENT ON U.S. INCOME AND TRANSFER TAX PLANNING The 2011 Annual Meeting of the California Tax Bar and the California Tax Policy Conference State Bar of California Taxation

More information

US Voluntary Disclosure

US Voluntary Disclosure what you need to know, and how we can help www.withersworldwide.com Introduction Countries throughout the world have committed to redefining banking secrecy laws so as to no longer protect any form of

More information

INTERNATIONAL TIDBIT: Reporting Foreign Investments New Requirements for the 2013 Tax Year

INTERNATIONAL TIDBIT: Reporting Foreign Investments New Requirements for the 2013 Tax Year INTERNATIONAL TIDBIT: Reporting Foreign Investments New Requirements for the 2013 Tax Year The last few years have seen increased emphasis on individuals reporting about their foreign investments and penalizing

More information

Tax Aspects of Consulting The Exit Tax Roth IRA Conversions Other. Foreign Bank Account Reporting Update Social Security

Tax Aspects of Consulting The Exit Tax Roth IRA Conversions Other. Foreign Bank Account Reporting Update Social Security The Wolf Group, PC Tax Aspects of Consulting The Exit Tax Roth IRA Conversions Other Foreign Bank Account Reporting Update Social Security U.S. citizen Green card holder G-4 visa holder Based on common

More information

Instructions for Form 8938

Instructions for Form 8938 2015 Instructions for Form 8938 Statement of Specified Foreign Financial Assets Department of the Treasury Internal Revenue Service Section references are to the Internal Revenue Code unless otherwise

More information

Instructions for Form 8938 (Rev. December 2014)

Instructions for Form 8938 (Rev. December 2014) Instructions for Form 8938 (Rev. December 2014) Statement of Specified Foreign Financial Assets Department of the Treasury Internal Revenue Service Section references are to the Internal Revenue Code unless

More information

Tax and Estate Planning Issues for Canadian Citizens and Residents residing in the U.S. and Dual U.S.- Canadian Citizens

Tax and Estate Planning Issues for Canadian Citizens and Residents residing in the U.S. and Dual U.S.- Canadian Citizens September 23, 2008 Tax and Estate Planning Issues for Canadian Citizens and Residents residing in the U.S. and Dual U.S.- Canadian Citizens Natalia Yegorova is an associate at Black Helterline LLP. Her

More information

EB-5 Immigrant Investor Program Frequently Asked Questions (09/2013)

EB-5 Immigrant Investor Program Frequently Asked Questions (09/2013) EB-5 Immigrant Investor Program Frequently Asked Questions (09/2013) 1. EB-5 Visas Issued to the Top 5 Countries for FY-2009 to FY-2013: FY-2013* C5 T5 I5 R5 Total China Mainland born 154 139 5,771 4 6,008

More information

The Law Office of Linda M. Hoffman, P.C. Visa and Immigration Options

The Law Office of Linda M. Hoffman, P.C. Visa and Immigration Options The Law Office of Linda M. Hoffman, P.C. 919 18 th Street, N.W., Suite 250 Washington, D.C. 20006 Tel: (202) 331-9450 Fax: (202) 466-8151 www.hoffmanvisalaw.com Immigrant Visa Green Card Visa and Immigration

More information

Tax Information for Employees of the German Embassy & Consulates

Tax Information for Employees of the German Embassy & Consulates Tax Information for Employees of the German & Consulates Rick Ward February 27, 2014 Agenda Categories of employees Exemptions from US Tax Taxation of US Citizens and Residents Taxation of A-2 Visa Holders

More information

INTERNATIONAL TAX COMPLIANCE FOR GOVERNMENT CONTRACTORS

INTERNATIONAL TAX COMPLIANCE FOR GOVERNMENT CONTRACTORS INTERNATIONAL TAX COMPLIANCE FOR GOVERNMENT CONTRACTORS Mark T. Gossart Alison N. Dougherty September 26, 2012 2012 All Rights Reserved 805 King Farm Boulevard Suite 300 Rockville, Maryland 20850 301.231.6200

More information

STATE BAR OF CALIFORNIA TAXATION SECTION INTERNATIONAL TAX COMMITTEE 1

STATE BAR OF CALIFORNIA TAXATION SECTION INTERNATIONAL TAX COMMITTEE 1 SEPTEMBER 2010 STATE BAR OF CALIFORNIA TAXATION SECTION INTERNATIONAL TAX COMMITTEE 1 PROPOSED GUIDANCE ON FBARS & FOREIGN PERSONS By Patrick W. Martin, Esq. Procopio, Cory, Hargreaves & Savitch LL Patrick

More information

Foreign Investment in Real Property Tax Act 1980 Buyer AND Seller Beware. By R. Scott Jones, Esq.

Foreign Investment in Real Property Tax Act 1980 Buyer AND Seller Beware. By R. Scott Jones, Esq. Foreign Investment in Real Property Tax Act 1980 Buyer AND Seller Beware By R. Scott Jones, Esq. This article summarizes the tax withholding rules imposed on a buyer and his/her agent when purchasing U.S.

More information

Department of Homeland Security Breakdown

Department of Homeland Security Breakdown Department of Homeland Security Breakdown Department Of Homeland Security (DHS) Citizenship & Immigration Service (CIS) Good Branch naturalization, green cards, work authorization, Immigration & Customs

More information

THE IMPORTANCE OF INTERNATIONAL TAX AND ESTATE PLANNING By: Avi Z. Kestenbaum and K. Eli Akhavan

THE IMPORTANCE OF INTERNATIONAL TAX AND ESTATE PLANNING By: Avi Z. Kestenbaum and K. Eli Akhavan THE IMPORTANCE OF INTERNATIONAL TAX AND ESTATE PLANNING By: Avi Z. Kestenbaum and K. Eli Akhavan The current global economic environment demands that legal, accounting and financial professionals be well

More information

ESTATE PLANNING FOR U.S. NON-CITIZENS & RESIDENTS

ESTATE PLANNING FOR U.S. NON-CITIZENS & RESIDENTS ESTATE PLANNING FOR U.S. NON-CITIZENS & RESIDENTS This Advisory discusses the estate tax benefits for those individuals who are not citizens of the United States and/or spouses of United States citizens

More information

COMMON QUESTIONS ASKED BY FOREIGN PEOPLE ABOUT U.S. TAXES. September 2013 Edition

COMMON QUESTIONS ASKED BY FOREIGN PEOPLE ABOUT U.S. TAXES. September 2013 Edition COMMON QUESTIONS ASKED BY FOREIGN PEOPLE ABOUT U.S. TAXES September 2013 Edition COMMON QUESTIONS ASKED BY FOREIGN PEOPLE ABOUT U.S. TAXES September 2013 Edition Editor: Joseph B. Barnes, CPA Past Editor:

More information

Obtaining and Terminating U.S. Citizenship and Preserving and Terminating U.S. Green Cards. Steve Trow November 2012

Obtaining and Terminating U.S. Citizenship and Preserving and Terminating U.S. Green Cards. Steve Trow November 2012 Obtaining and Terminating U.S. Citizenship and Preserving and Terminating U.S. Green Cards Steve Trow November 2012 SURPRISE! Your Client May Be A U.S. Citizen And Not Know It Citizenship By Birth In U.S.

More information

MIT U.S. Income Tax Presentation Non US Resident Students

MIT U.S. Income Tax Presentation Non US Resident Students MIT U.S. Income Tax Presentation Non US Resident Students PwC Boston Nabih Daaboul Carol McNeil Rich Wagman 1 Basic U.S. Tax Overview for International Students A foreign national is a person born outside

More information

The Effect of Residency in International Estate Planning

The Effect of Residency in International Estate Planning The Tax Adviser September 2006 The Effect of Residency in International Estate Planning Clients are more likely than ever to have a financial interest subject to the tax laws of another county. This article

More information

I. Taxation of U.S. Citizens Living and/or Working in Canada*

I. Taxation of U.S. Citizens Living and/or Working in Canada* I. Taxation of U.S. Citizens Living and/or Working in Canada* 1 1.01 Introduction: 1 1.02 U.S. Income Taxation of Citizens 2 (a) Taxation of Individuals 2 (b) Taxes and Passports 2 (c) Americans Employed

More information

Estate Planning and Income Tax Issues for Nonresident Aliens Owning US Real Estate

Estate Planning and Income Tax Issues for Nonresident Aliens Owning US Real Estate Estate Planning and Income Tax Issues for Nonresident Aliens Owning US Real Estate 1. Introductory Matters. Presented by Paul McCawley Greenberg Traurig, P.A. mccawleyp@gtlaw.com 954.768.8269 October 24,

More information

TREASURY DEPARTMENT TECHNICAL EXPLANATION OF THE PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND

TREASURY DEPARTMENT TECHNICAL EXPLANATION OF THE PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND TREASURY DEPARTMENT TECHNICAL EXPLANATION OF THE PROTOCOL BETWEEN THE UNITED STATES OF AMERICA AND THE FEDERAL REPUBLIC OF GERMANY SIGNED AT WASHINGTON ON DECEMBER 14, 1998 AMENDING THE CONVENTION BETWEEN

More information

Preparation Is Key When A Non-U.S. Tax Resident Joins The Board Of Directors

Preparation Is Key When A Non-U.S. Tax Resident Joins The Board Of Directors Compensation & Fringe Benefits Preparation Is Key When A Non-U.S. Tax Resident Joins The Board Of Directors Preparation is Key When a Non-U.S. Tax Resident Joins the Board of Directors, Corporate Taxation

More information

Frequently Asked Questions (FAQ) FATCA

Frequently Asked Questions (FAQ) FATCA Frequently Asked Questions (FAQ) FATCA Table of Contents General... 3 What is FATCA?... 3 What is the purpose of FATCA?... 3 When does FATCA begin?... 3 Who is impacted by FATCA?... 3 What information

More information

A U.S. IMMIGRATION LAW FIRM. Immigration Law Overview

A U.S. IMMIGRATION LAW FIRM. Immigration Law Overview A U.S. IMMIGRATION LAW FIRM Immigration Law Overview Deportation and Removal Proceedings Immigrants face removal from the United States if they are charged with a crime or are caught living or working

More information

U.S. Taxation of Foreign Investors

U.S. Taxation of Foreign Investors U.S. Taxation of Foreign Investors By Richard S. Lehman & Associates Attorneys at Law Copyright 2004 Copyright by Richard S. Lehman Page 1 U.S. Taxation of Foreign Corporations And Nonresident Aliens General

More information

Overview of Common Civil Penalties Asserted by the IRS

Overview of Common Civil Penalties Asserted by the IRS Overview of Common Civil Penalties Asserted by the IRS December, 2008 Bob Kane Rob McCallum LeSourd & Patten, P.S. INTRODUCTION In 1989, Congress enacted legislation substantially revising the civil penalty

More information

A 5.5% solidarity surcharge is imposed on the income tax liability of all taxpayers.

A 5.5% solidarity surcharge is imposed on the income tax liability of all taxpayers. Worldwide personal tax guide 2013 2014 Germany Local information Tax Authority Website Tax Year Tax Return due date 31 May 2013 Is joint filing possible Are tax return extensions possible 2013 income tax

More information

Trust and Estate Planning Considerations When Advising Canadians Living in the United States

Trust and Estate Planning Considerations When Advising Canadians Living in the United States This article is reprinted with the publisher's permission from the Journal of Practical Estate Planning, a bimonthly journal published by CCH, INCORPORATED. Copying or distribution without the publisher's

More information

Withholding of Tax on Nonresident Aliens and Foreign Entities

Withholding of Tax on Nonresident Aliens and Foreign Entities Department of the Treasury Internal Revenue Service Publication 515 Cat. No. 15019L Withholding of Tax on Nonresident Aliens and Foreign Entities For use in 2013 Contents What's New... 1 Reminders... 2

More information

Section 83(b) Election Better Safe Than Sorry

Section 83(b) Election Better Safe Than Sorry Section 83(b) Election Better Safe Than Sorry by idan netser I. Introduction Founders, executives and other employees of fast growing companies if you received or are about to receive restricted stock

More information

New Exit Taxes for the U.S. Expatriate

New Exit Taxes for the U.S. Expatriate New Exit Taxes for the U.S. Expatriate By Tania S. Sebastian Troutman Sanders LLP U.S. citizens and permanent residents 1 are subject to U.S. income tax on their worldwide income, regardless of where they

More information

Tax planning for employees coming to work in the U.S. Up close

Tax planning for employees coming to work in the U.S. Up close Tax planning for employees coming to work in the U.S. Up close Tax > International tax > Expatriate taxes In U.S. tax law the term alien refers to a foreign national (an individual who is not a citizen

More information

Estate Planning for Foreign Nationals Using Life Insurance

Estate Planning for Foreign Nationals Using Life Insurance Estate Planning for Foreign Nationals Using Life Insurance PRESENTED BY: Joe Sample, [Designations per field stationery guidelines] [Company Approved Title] [Agency Name] [The Prudential Insurance Company

More information

GUIDE TO U.S. INCOME TAXATION FOR IDB-IIC FCU MEMBERS

GUIDE TO U.S. INCOME TAXATION FOR IDB-IIC FCU MEMBERS GUIDE TO U.S. INCOME TAXATION FOR IDB-IIC FCU MEMBERS Prepared Exclusively for IDB-IIC FCU Members by The Wolf Group, P.C. January, 2013 Copyright 2013 - The Wolf Group, P.C. January 2013 1 Copyright 2013

More information

Tax Information for Foreign National Students, Scholars and Staff

Tax Information for Foreign National Students, Scholars and Staff Information for Foreign National Students, Scholars and Staff I. Introduction For federal income tax purposes, foreign national students and scholars are categorized in one of two ways: Nonresident alien

More information

Top 10 Foreign Bank Account Reporting (FBAR) Mistakes (And How to Fix Them)

Top 10 Foreign Bank Account Reporting (FBAR) Mistakes (And How to Fix Them) Latham & Watkins Tax Controversy Practice June 2, 2015 Number 1839 Top 10 Foreign Bank Account Reporting (FBAR) Mistakes (And How to Fix Them) While FBAR reporting rules are frequently misunderstood, US

More information

Non-Citizen Resident Estate and Gift Planning Guide

Non-Citizen Resident Estate and Gift Planning Guide Non-Citizen Resident Estate and Gift Planning Guide Agent Estate Reference Planning Guide AAM2026N (11-15) For agent information and reference only. Not for use with the public. Estate and gift planning

More information