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proficiencytaxca · 11 days

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Mastering US Tax Compliance with Proficiency Tax in Riverside South, Ottawa

Welcome to the Proficiency Tax blog! Our mission is to help individuals and businesses in Riverside South, Ottawa, navigate the complexities of US tax compliance with ease and confidence. Whether you're a US expatriate, a dual citizen, or a business operating across borders, our team is here to provide expert advice and tailored solutions. Let's explore some key topics to keep you informed and compliant.

Understanding US Tax Obligations for Expats

Living abroad doesn’t exempt US citizens and Green Card holders from filing US taxes. Here are the basics you need to know:

Filing Requirements: US citizens and resident aliens must report their worldwide income annually if it exceeds certain thresholds.

Foreign Earned Income Exclusion (FEIE): You may exclude up to a specific amount of foreign earned income if you meet certain requirements.

Foreign Tax Credit (FTC): This allows you to offset taxes paid to foreign governments against your US tax liability.

FBAR and FATCA: Reporting requirements for foreign financial accounts and assets.

Streamlined Filing Compliance Procedures

For those who have missed filing their US tax returns while living abroad, the IRS offers Streamlined Filing Compliance Procedures. This program helps delinquent taxpayers get back on track without severe penalties. Proficiency Tax can guide you through this process seamlessly.

Corporate Tax Considerations

Businesses with operations in the US must navigate a complex landscape of tax obligations. Key considerations include:

Corporate Income Tax: Understanding the rates and regulations for corporate tax filings.

Transfer Pricing: Ensuring compliance with rules governing transactions between related entities in different countries.

State Taxes: Navigating the tax requirements of individual states, which can vary significantly.

Tax Planning Strategies

Effective tax planning can save you money and prevent future issues. Proficiency Tax offers comprehensive tax planning services, including:

Tax-Deferred Accounts: Leveraging accounts such as IRAs and 401(k)s to defer taxes.

Charitable Contributions: Maximizing deductions through strategic charitable giving.

Estate Planning: Ensuring your assets are managed and transferred according to your wishes while minimizing tax liabilities.

Recent Tax Law Changes

Staying updated with the latest changes in tax laws is crucial. Recent reforms, such as the Tax Cuts and Jobs Act (TCJA), have brought significant changes that may affect your filings. Our team stays abreast of these changes to provide you with accurate advice and strategies.

Common Pitfalls and How to Avoid Them

Missing Deadlines: Ensure timely filing to avoid penalties and interest.

Incorrect Forms: Using the wrong forms can lead to errors and delays.

Overlooking Deductions: Not taking advantage of all available deductions can result in higher tax bills.

Why Choose Proficiency Tax?

At Proficiency Tax, we pride ourselves on our deep understanding of both US and Canadian tax systems. Our Riverside South, Advice US Tax Riverside South Ottawa based team offers personalized service, ensuring that every client receives the attention and expertise they deserve. Here’s what sets us apart:

Expertise: Our team is well-versed in US tax laws and their application to expats and cross-border entities.

Personalized Service: We tailor our services to meet your unique needs, providing customized solutions.

Compliance and Accuracy: We prioritize accuracy and compliance to help you avoid audits and penalties.

Connect with Proficiency Tax Today

If you’re in Riverside South, Ottawa, and need assistance with US tax matters, Proficiency Tax is here to help. Contact us to schedule a consultation and let our experts guide you through the complexities of US tax compliance.

Stay tuned to our blog for regular updates, tips, and insights on navigating the world of US taxation from abroad. With Proficiency Tax, you’re in capable hands.

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citizenshipsolutions · 1 month

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Why Treasury Should Exempt U.S. Citizens Living In Other Countries From FBAR Filing

OMB Control No: 1506-0009 / ICR Reference No: 202403-1506-001 / Federal Register: 2024-06697 Reports of Foreign Financial Accounts Regulations and FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR) Outline: Part I – Introduction and Context- Understanding The April 29, 2024 Deadline For FBAR Commentary Submissions Part II – Comment: Statement Of Purpose Part III – Looking For…

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#FBAR #Fincen 114 #OMB Control No: 1506-0009 / ICR Reference No: 202403-1506-001 / Federal Register: 2024-06697

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accelero25 · 3 months

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7 Things Expats in India MUST Know About Filing US Taxes

Introduction:

Living as an expatriate in India comes with its personal set of demanding situations, and one essential element that frequently requires careful attention is the submitting of USA taxes. The complicated tax laws of both the USA and India can be overwhelming, but expertise the key concerns can make the manner smoother for expats. In this blog publish, we will delve into crucial things that expats in India should realize approximately filing Foreign Tax Credit in India.

Residency and Tax Obligations:

Expats want to realise the idea of tax residency in each countries. The United States taxes its citizens on worldwide profits, whilst India follows a comparable approach for citizens. Understanding your residency fame is fundamental in figuring out your tax responsibilities.

Foreign Earned Income Exclusion (FEIE):

The FEIE lets in US expats to exclude a sure amount of their overseas-earned earnings from US taxation. Expats in India can leverage this provision, but they need to meet precise criteria to qualify. Explaining the eligibility necessities and the ability tax savings can be beneficial for expats.

Foreign Tax Credit (FTC):

The US offers a Foreign Tax Credit for taxes paid to foreign governments, which includes India. Expats can use this credit score to offset their US tax legal responsibility. Detailing how the FTC works and the documentation required will help expats navigate this thing of tax submitting.

Tax Treaties Between the US and India:

Understanding the bilateral tax treaties between the USA and India is essential for expats. These treaties can affect various factors of taxation, consisting of earnings, capital profits, and social safety. Explaining the provisions of the tax treaty and the way it impacts expats' tax liabilities is vital.

Filing Deadlines and Extensions:

Expats regularly face precise challenges related to filing deadlines. Discussing the automatic extension for US residents dwelling overseas and the importance of timely submitting can assist expats avoid penalties and make certain compliance with both tax systems.

Reporting Foreign Assets:

Both america and India require expats to document foreign economic bills and assets. Providing a top level view of the Foreign Bank Account Report (FBAR) and the Foreign Account Tax Compliance Act (FATCA) requirements will assist expats in pleasing their reporting responsibilities.

Social Security and Other Benefits:

US expats may additionally have worries approximately social security contributions and other advantages even as dwelling in India. Clarifying how those elements impact their US tax duties and future blessings is critical for comprehensive tax planning.

Conclusion:

Filing US taxes as an expatriate in India needs a thorough know-how of the intricacies concerned. This weblog put up targets to equip expats with crucial data to navigate the complexities, making sure compliance with both US and Indian tax laws. By staying informed and looking for professional steerage while needed, expats can manage their tax duties correctly and experience a seamless monetary revel in even as residing overseas.

#USA INDIA Taxes #USA Citizen Tax Services #Green Card Holder Taxes #India Foreign Tax Credit

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davidkblanton-cpa-pllc · 1 year

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Reminder for U.S. citizens, resident aliens, and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is April 15. This requirement is applicable for anyone who has financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account in a foreign country. http://dkbcpa.com/ http://dkbcpa.com/monthly-newsletter

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ifindtaxpro · 2 years

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#deadline #fbar due date

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clockmetal5 · 2 years

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Fbar Voluntary Disclosure Penalty Calculations Explained

Our attorneys work directly with our clients to identify potential tax issues and develop plans to ensure that their foreign assets are in full compliance with FATCA and other offshore account reporting requirements. The Internal Revenue Service has had success encouraging taxpayers with offshore accounts to disclose their foreign accounts and pay back taxes. In 2009 and 2011, the IRS announced the Offshore Voluntary Disclosure Program which allowed taxpayers to come forward and report foreign income, bank accounts, and other assets. foreign tax credit corporations The IRS had 33,000 voluntary disclosures, resulting in $4.4 billion in taxes, interest and penalties. In 2012, the IRS reopened the OVDP and set no deadline for the program to end. Not a single one of Andrew’s clients’ Streamlined Domestic Offshore or Streamlined Foreign Offshore filings have ever been challenged or rejected by the IRS. 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 Form TD F 90-22.1) violation. if you reside in a country which has a tax treaty with the US, like Canada, you can claim a reduced rate of withholding tax to be deducted from a payment. You’re listening to another episode of PwC’s Tax Tracks at/ca/taxtracks. This series looks at the most pressing technical and management issues affecting today’s busiest tax directors. Through interviews with prominent PwC tax subject matter professionals, Tax Tracks is an audio podcast series that is designed to bring succinct commentary on tax technical, policy and administrative issues that provides busy tax directors information they require. The streamline disclosure program offers a chance for those who have committed non-willful violations of tax law by failing to report taxable foreign income-generating assets or bank / financial accounts, or other required foreign information reporting a chance to be brought back into compliance. However, the keyword regarding this program is “non-willful.” You must submit a certified statement that you did not willfully fail to disclose this information to avoid paying income taxes. If you are found to have falsely certified non-willfulness, severe criminal and civil penalties can occur. The IRS is now fully committed efforts to finding and prosecuting non-compliant U.S. taxpayers with undisclosed foreign source income and offshore accounts. The Bank Secrecy Act and the Foreign Account Tax Compliance Act require both foreign financial institutions and U.S. taxpayers to disclose the non-U.S. Compliance failures can result in both civil and criminal penalties and interest charges. The IRS reports that its programs have gathered approximately $11 billion in delinquent tax, penalties, and interest, and more than 1,500 indictments in recent years. Our FBAR and FATCA compliance team understands the complex challenges you face with foreign asset reporting regulations, the IRS voluntary disclosure program, and the disclosure and withholding requirements imposed on foreign financial institutions. If you are one of the many U.S. residents who own overseas assets and were not aware of the disclosure requirements for these accounts, you should consider disclosing your offshore assets and becoming tax compliant without delay. A person who is required to file Form 114 and fails to do so may be subject to a penalty not to exceed $10,000 per violation. A person who wilfully fails to file or report an account may be subject to a penalty equal to the greater of $100,000 or 50 percent of the balance in the account. Just because these assets are in a foreign country, however, this does not mean that they are not subject to taxation or foreign information reporting by the IRS. In fact, over the last decade, the IRS has cracked down on those who fail to report foreign accounts, fail to file required foreign information returns, and evade income tax from taxable offshore income-generating assets on their returns, which can lead to severe civil and criminal penalties. As if the very real possibility of penalty increases does not give taxpayers who have undisclosed foreign accounts, a reason to participate in the disclosure program as soon as possible, maybe the possibility that they will be disqualified tomorrow will. Though the provisions of agreements with foreign banks related to the FATCA legislation, an electronic data exchange protocol has been established and is now in full effect. It means that a foreign bank can send the IRS all of your foreign account information in a matter of a few seconds electronically. Understand your clients’ strategies and the most pressing issues they are facing. The United States has recently enacted legislation commonly referred to as FATCA for the specific purpose of finding U.S. taxpayers who have unreported foreign accounts and income. FATCA requires foreign banks and financial institutions to report accounts held by U.S. taxpayer clients. FATCA and increased enforcement of civil and criminal penalties for unfiled Foreign Bank and Financial Account Reports , have given the IRS powerful new weapons in their search for undisclosed foreign assets and accounts. The penalties is $10,000, per return with an additional $10,000 added for each month the failure continues beginning 90 days after the taxpayer is notified of the delinquency, up to a maximum of $50,000 per return. In the mid-2000s, the IRS began aggressively pursuing foreign financial institutions for information concerning deposits held by those institutions on behalf of U.S. taxpayers. That effort has resulted in an unprecedented period of world-wide intra-governmental cooperation to identify unreported accounts and untaxed income. If you have, we can solve it quickly and for the least possible cost. We are available by phone nationwide or by appointment at your choice of 6 different offices throughout California. We took over a case from a small firm that unsuccessfully submitted multiple clients to IRS Offshore Disclosure. Our lead attorney is one of less than 350 Attorneys to earn the Certified Tax Law Specialist credential. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. With very limited exceptions for individuals born with diplomatic agent level immunity, all persons born in the United States acquire U.S. citizenship at birth as a matter of U.S. law and without regard to intent. or other 3 letter government faction for criminal investigation and possible prosecution. If you are seeking FBAR Amnesty 2015 or prior year FBAR non-compliance, you can use this article to assist you with getting into compliance for 2019 and prior years. If you are seeking FBAR Amnesty 2016 for prior year FBAR non-compliance, you can use this article to assist you with getting into compliance for 2019 and prior years. If you are seeking FBAR Amnesty 2017 for prior year FBAR non-compliance, you can use this article to assist you with getting into compliance for 2019 and prior years. New information-sharing agreements between the United States, foreign governments, and foreign financial institutions are closing the door on bank secrecy and are exposing non-compliant taxpayers who hold undisclosed assets abroad. The IRS’s Offshore Voluntary Disclosure Program offers a path for U.S. tax residents to become compliant with their outstanding filing obligations while mitigating or minimizing the penalties associated with non-compliance — however, this program can close at any time. Alternatively, the IRS could choose to limit the types of taxpayers who may enter into the streamlined program, or increase the penalties offered within the framework. Once the program closes, taxpayers may once again face full audits and investigations, full FBAR penalties, and potential prosecution. Depending on the aggregate amount of a taxpayer’s offshore assets, penalties could reach as high as 50% of the value of each overseas account per year. Finally, with the implementation of the Foreign Account Tax Compliance Act and the IRS's increased focus on offshore tax evasion, U.S. taxpayers are increasingly unable to avoid their obligation to report their accounts and income worldwide. Each year, thousands of Americans utilize foreign bank or financial accounts and employ foreign income-generating assets. In order to avoid being disqualified from the program, it is in your best interest to contact an experienced tax attorney to find proper representation to your undisclosed foreign accounts as soon as possible. The legal team at Thorn Law Group is well positioned to advise clients on complex tax issues associated with their offshore accounts and other foreign financial assets. The below video explains the NEW streamlined Offshore Voluntary Program. I offer aFREEIRS OVDP check-up and aFREEin-depth financial consultation. I guarantee that after your consultation you will feel comfortable knowing how I, as an experienced professional in the industry, will resolve your case. Because of the changed amensty programs, many individuals now have an easier path to get compliant. The Offshore Voluntary Disclosure Program began in a slightly different form and with a slightly different name in 2009. It was on an offshoot of the traditional domestic voluntary disclosure program, which has been on the books for many years, focused on FBAR violations in particular. Under this program, taxpayers who had failed to report foreign bank and financial accounts or other foreign assets on their returns could be brought back into compliance and avoid criminal liability and the most severe civil penalties. The terms of the current 2012 voluntary disclosure program may be unappealing to many taxpayers. Our attorneys are very familiar with the reporting requirements individual taxpayers must meet under FATCA and other U.S. tax laws and regulations. We make certain that our clients understand their legal obligations and are taking appropriate steps to bring their offshore accounts and assets into full compliance with the law. Our tax law firm also assists foreign financial institutions with IRS reporting requirements and works with FFIs to design effective FATCA compliance strategies and programs. The Form 114 is an annual report that must be filed independent of a taxpayer’s tax return on or before June 30 of every year. The monetary penalty can lead to inequitable results for many taxpayers, especially given the market fluctuations since 2008. The IRS appears to recognize that the voluntary disclosure programs many not be appropriate for all taxpayers. how to fill form 3520 For example, certain non-resident taxpayers as well as dual citizens may be allowed to correct their prior income and reporting delinquencies without entering a voluntary disclosure program. We will happily offer you a FREE initial consultation to determine how we can best serve you. The two amnesty programs to come clean with the US government are the traditional OVDP or the Streamlined Offshore Program. If you are seeking FBAR Amnesty 2018 for prior year FBAR non-compliance, you can use this article to assist you with getting into compliance for 2019 and prior years. We're proud to celebrate over 30 years working with international expat communities around the world. Through all the changes we've seen as our world evolves, our core value to serve our clients wherever they are, remains the same. In addition to tax and interest, the IRS generally requires taxpayers to pay a monetary penalty equal to 27.5 percent of the highest aggregate balance of the taxpayers' foreign bank accounts/entities or value of foreign assets during the period covered by the voluntary disclosure. Despite the severity of the monetary penalty, taxpayers should consider the risk of criminal prosecution for non-compliance with the foreign account reporting rules and the potential for criminal penalties. The rationale seems to be that if a person resides outside of the United States for 11 out of 12 months in a year, the IRS will cut them a break as tax filing. You are entering the program “voluntarily,” which means you are not currently under audit or examination. People who are both Willful and Non-Willful may enter the program, but non-willful individuals typically only submit to OVDP under specific scenarios (MTM Elections, Opt-Out). Each week, the Treasury Department announces a new agreement with a foreign country on FATCA cooperation. Just last week, the Swiss government and the United States announced such an agreement. More than 30,000 voluntary disclosures have been made since the programs began in 2009, resulting in more than $5 billion in back taxes, interest and penalties paid to the IRS. The voluntary disclosure program provides many benefits for certain taxpayers. Most importantly, taxpayers can avoid potential criminal prosecution for failure to report their foreign accounts. In addition, taxpayers can resolve their delinquent tax and reporting issues in a relatively streamlined process. While we have come across clients who have willfully omitted foreign accounts and income from their U.S. tax returns, most clients that contact us for offshore compliance issues have recently realized that they have foreign income and information reporting requirements . They’ve never been on the wrong side of the law and have never had the need to hire an attorney. They are terrified of the massive civil penalties that can be assessed for noncompliance, even for non-willful violations. Since 2009, the IRS has allowed taxpayers with undisclosed foreign accounts and unreported foreign earnings to enter voluntary programs to correct these compliance failures. Under the terms of these programs, taxpayers typically submit eight years of amended tax returns, Forms TD F 90-22.1 ("FBARs") reporting the foreign accounts, and account statements of their foreign accounts. Financial institutions and host country tax authorities can transmit and exchange FATCA data with the United States. Search and download a monthly list of approved foreign institutions that have a Global Intermediary Identification Number . This website uses cookies so that we can provide you with the best user experience possible. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. The streamlined procedures are designed to provide to taxpayers in such situations with a streamlined procedure for filing amended or delinquent returns and resolving their tax and penalty obligations. Beginning with the 2011 tax year, a penalty for failing to file Form 8938 reporting the taxpayer’s interest in certain foreign financial assets, including financial accounts, certain foreign securities ,etc. Beginning September 1, 2012, such taxpayers, provided they are deemed not to be compliance risks, may simply submit delinquent tax returns for the past three years, FBARs for the past six years, and certain other information without being subject to a civil or criminal penalty. This special dispensation may be particularly helpful for long-time residents of Canada or other nations who remain U.S. taxpayers. OVDP is designed to provide to taxpayers with such exposure protection from criminal liability and terms for resolving their civil tax and penalty obligations. U.S. citizens must file U.S. tax returns and report and pay tax on their worldwide income. Subject to certain de minimis exceptions, if a U.S. citizen is a resident or citizen of Israel, he or she must file a U.S. income tax return and report his or her worldwide income to the IRS. The Form 114 is an annual report that must be filed independent of a taxpayer's tax return on or before June 30 of every year. In addition, taxpayers must pay tax on the previously unreported income, interest, and certain penalties. Specifically, US taxpayers are required to comply with FATCA by properly disclosing and reporting their foreign accounts and foreign income in their Tax Return filings and FBAR reporting requirements of foreign and offshore accounts. In order to ensure the taxpayer has complied, the foreign financial institution issues a FATCA Letter, which will usually be accompanied by two forms – a W-9 and a W-8 BEN. Only US taxpayers are required to complete a W-9 and return the completed W-9 form to the foreign financial institution. As former IRS lawyers, our legal team has an extensive understanding of the U.S. tax laws and regulations governing foreign accounts and other financial assets held outside of the country. We know how the IRS and other federal authorities examine and investigate unreported offshore assets and accounts. PricewaterhouseCoopers refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, or, as the context requires, the PricewaterhouseCoopers global network or other member firms of the network, each of which is a separate and independent legal entity. You have 30 days to inform your financial institution or a withholding agent of the change.

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usataxservices · 3 years

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FBAR Filing: When to Do It and How to Do It

Don’t get amused if you are hearing this name while filing a Tax return online. FBAR is a Foreign Bank Account Report also known as FinCEN Form 114. So, if you have financial accounts in foreign banks then you need to know everything about FBAR and how to file it legally.

Condition to file FBAR is to have at least a total of $10,000 in all financial accounts based outside the USA. Remember, its the total amount and not just of the single bank account.

When to file FBAR?

The main objective behind the FBAR from federal government and IRS is to know every financial account detail of a US Citizen living at any corner of the world. Thus, you can file the FBAR report any day on the year. Reporting FBAR once a year is mandatory with 15 April as the deadline in most of the cases.

How to file FBAR?

Just like income tax efiling, FBAR filing is a step by step process that includes Form 114. Prepare all the information about your financial bank accounts outside the 50 States of the US. In case your life partner also possesses foreign bank accounts, you need to take care that a joint form can be filled only in case of having joint foreign bank accounts. If your spouse has a different account than yours, then a separate form filling would be needed.

Here are the simple steps to file an FBAR with help of best online tax service of USA Tax Preparation services.

1. Go here and find USATS FBAR filing services 2. Put your details as mentioned in the form. You can take help of the USA Tax Consultant from USATS in the process also. 3. Sit back and relax while USATS files your FBAR with all laws followed

Hurray! You are done with the hectic process quickly with USATS.

What if You fail in Filing FBAR?

There are nothing new but very serious consequences when you fail to tell the government about your foreign financial accounts. Penalties follow you everywhere amounting as much as $100,000 in these cases. It is always advised to file your FBAR or take help of trusted firm like USATS in filing it.

USATS provides numerous services for US Citizens. Visit the site here.

#tax #income tax #tax professional #tax preparation #tax refund #tax return #accounting #tax filing #tax services

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fleshwine1 · 2 years

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Why Everything You Know About Foreign Tax Credit Limitation Is A Lie

After briefly summarizing some relevant common rules relating to streamlined, this blog will tackle the implications of that FAQ for snowbirds who have not filed during the 3-year period for which tax returns should be submitted beneath streamlined and, in line with the IRS, spend a lot time in the United States. FBAR filing obligation, and their normal need to play by the foundations. 2008 to 2010. APS was responsible for paying the wages of Tytan's employees, withholding employment taxes, filing Tytan's employment tax returns, and paying withheld employment taxes to IRS. The offices also have tax forms and publications. The bank, reputed to be HSBC reasonably than UBS, was involved both by way of New York workplaces and Swiss places of work. There isn't any legal definition of a Swiss annuity. For those taxpayers who do not need accounts at Swiss banks, they have the Foreign Account Tax Compliance Act (“FATCA”) notifications to deal with. So are the notions of reparation tax credit, corporation sole, Social Safety refunds and the type 1040 not being legitimate because it doesn’t have an OMB management quantity as required by the Paperwork Reduction Act. Discovered about FBAR and 8938 after the deadlines?

Since issuing proposed laws in February, the IRS has received numerous feedback from affected parties saying the original deadlines do not give them sufficient time to adjust to FATCA's due diligence, withholding and documentation rules. 340 (the IRS dominated that U.S. There are reviews that main Indian American community teams are lobbying the Secretary of the Treasury to deliver relief to Indian Americans caught in the vise of the tax and FBAR rules and the OVDI 2011. I hyperlink to some articles below. You discover the case research by first clicking on the "Learn More" hyperlink at the positioning.

Tax Scams The IRS established an online site designed to alert tax practitioners and taxpayers to tax scams and fraud schemes. SmartMoney, Estate Planning part This site consists of client info, articles and calculators for web value and estate taxes. Sure taxpayers also needs to consider using some or all of their lifetime gift and estate tax exclusion (asset worth equal of $5.25 million in 2013, rising to $5.34 million for 2014) previous to yr finish. Whether it's worthwhile to construction a world transaction, reorganize your corporation, switch household property or defer tax on the sale of belongings, ABA Tax Accounting provides a wide array of services that cowl every facet of your small business and private funds. Some assets, such as private property, inventory and receivables, don't qualify as capital property and the profit on the sale of these property and the quantity allocated to a non-compete agreement are topic to bizarre earnings tax charges. They range from “The filing of a tax return is voluntary” to “Only foreign-supply earnings is taxable” to my personal favorite, “Compelled compliance with the federal revenue tax laws is a form of servitude in violation of the Thirteenth Amendment.” All bogus. The thought is to get you to show over private data or to click on a link which will set up malware in your pc that may track your keystrokes or in any other case glean entry to your financial data.

To learn the details click on the hyperlink. It looks like every time we open a newspaper, learn the headlines on the net, or discuss with different Americans in our host nations, it is dangerous information followed by extra dangerous news. The introduction of the automated trade of data with overseas nations will probably be performed by means of agreements with accomplice countries, which should be accepted by parliament right here. Upon implementation, Switzerland too will totally check whether or not other nations, particularly competing financial centres, are complying totally with the standard. As soon as the penalty is totally phased in, individuals who fail to keep up minimum essential coverage are topic to a penalty equal to the better of 2.5 percent of family income in excess of the taxpayer's family earnings for the tax yr over the threshold quantity of earnings required for income tax return filing for that taxpayer or $695 per uninsured grownup in the family. In an preliminary part, consideration could be given to nations with which there are close economic and political ties and which provide their taxpayers with sufficient scope for regularisation and that are thought of to be important and promising by way of their market potential for Switzerland’s monetary trade.

As of Sept. 30, 2013 the DoJ Asset Forfeiture Fund contained more than $6.38 billion, which perhaps speaks for itself in terms of turning into a profit center for government operations. Wages, unemployment compensation, working earnings from a nonpassive enterprise, Social Safety Advantages, alimony, tax-exempt interest, self-employment revenue, Alaska Everlasting Fund Dividends, and distributions from certain Certified Plans should not included in web funding income. With indictees' seizures the defendant may haven't any capability to fund a protection; certainly funds in a lawyer's trust account to pay future fees could also be seized. form 3520 attachments Securities accounts, insurance and annuity policies with a money value, mutual funds or “FBAR”), is used to report a monetary curiosity in or signature authority over a overseas financial account. He cited Switzerland's attempt to attract wealth managers and hedge funds and a transfer by Paris to draw personal equity corporations. OSHA OSHA's pages present a wealth of data associated to the agency's workplace safety standards and rules. Perhaps the safety valve would be the opt out, supplied that it's administered moderately to make the punishment fit the crime. International Tax Services - The IRS announced the creation of a new Advance Pricing and Mutual Agreement Program to handle transfer pricing issues formerly administered below separate IRS applications.

Highly-remunerated individuals are also mentioned to be experiencing the lock-out, indicating simply how nervous FFIs are of crossing the IRS. As a reminder, the brand new reporting necessities underneath the International Account Tax Compliance Act (FATCA) have been in impact for the past two filing seasons. What does all this mean for asset protection? Structured correctly, trusts may even help with asset safety and tax savings. The EU member states formally adopted the revised directive on the cross-border taxation of natural persons’ financial savings income within the form of interest funds on 24 March 2014. Is Switzerland now striving for the computerized trade of information within the scope of the negotiations on extending the EU savings tax agreement? Such a switch can obtain vital tax savings. However unless it is exempt below federal law, taxpayers generally forget that they have to report all such income on their tax return.

So filing a phony data return is flawed and illegal. Again, if it has the phrase “fake” or “phony” or “false” in front of it, you understand it’s flawed. I believe we know the answer to that one. In the twenty first century there’s not a lot you can do with out one. Notably, underneath the previous streamlined rules, it was usually understood that a taxpayer like Mr. Snowbird would be permitted to submit returns below streamlined since he didn't meet the substantial presence take a look at and would qualify as a Canadian resident beneath the U.S.-Canada tax treaty.17 In accordance with the IRS, Mr. Snowbird’s solely recourse for voluntary disclosure, and the applicable amnesty that accompanies it, is beneath the new 2014 OVDP, where he should pay at the least a 27.5% penalty on his overseas belongings. Negotiations on the automatic alternate of data with different selected nations are to be examined. This extension also applies to those serving in the army outside the U.S. Argument for taxpayers who simply did not know of the 2010 FBAR requirement as it applies to an annuity coverage. The extension of time to file till June 17, 2013, additionally applies to those serving within the navy exterior the U.S. Social Security - When is the best Time?

Jury returned a verdict finding Mr. Zwerner “willful” and thus liable for three civil FBAR penalties equal to 50% of the high stability in his international monetary account for each of the years 2004, 2005 and 2006 years as beforehand assessed by the federal government. 4. A 12.5% penalty price will apply if the aggregate stability did not exceed $75,000 in any of the years from 2003-2010. Presumably this lower price will likely be each for the in lieu of FBAR penalty and the earnings tax penalty. 13See Amy S. Elliott, IRS Answers Questions on Updated OVDP and Streamlined Filing, 2014 Tax Analysts W.T.D. The identical info reporting and matching challenges the IRS faces with tens of hundreds of thousands of individual income tax payers dangers either snagging some professional taxpayers whose paperwork may not be flawless, or sending out fraudulent refunds to undeserving recipients, Olson said. Recently, the Wall Street Journal reported how a younger e-commerce analyst initially from North Carolina and now working in Berlin was not permitted to open a brokerage account by a distinguished German financial institution, regardless that he had a present account with the identical institution. The OECD’s paperwork state that it is suitable with the AEOI normal that US monetary establishments don't should determine the helpful house owners of funding companies that have not concluded an settlement as a Foreign Financial Institution (FFI) with the United States and are situated in a state that has not concluded a FATCA agreement with the United States (no look-through principle).

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vanamount1 · 2 years

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Fatca & Bitcoin

These Commission proposals will now need to follow the normal EU decision-making process for tax proposals . The timeline for this process cannot currently be outlined with any certainty. The US Internal Revenue Service has already communicated that the deadline for tax authorities to exchange 2019 FATCA reports is to be postponed to 31 December 2020 . The OECD has also recommended the same coordinated extension of the CRS information exchange deadline between tax authorities. The deadline for the reporting of the “historical arrangements under DAC 6 (i.e. reportable arrangements the first step of which was implemented between 25 June 2018 and 30 June 2020) would be set as 30 November 2020 . Released a new CRS compliance form with a 2020 submission deadline of 31 December 2020. The Department for International Tax Cooperation of the Cayman Islands announced updates to the FATCA and common reporting standard regimes in response to the coronavirus (COVID-19) pandemic. Set up policies, controls, procedures and IT systems to ensure the fulfilment of FACTA and CRS due diligence and reporting obligations. The extended IRS Form 1065 filing deadline for the 2019 tax year will be 15 September 2020. The program is called the Streamlined Procedure, and it requires expats to file their last three returns, their last six FBARS , and to self-certify that their previous non-compliance wasn’t willful tax avoidance. Expats are also often subject to extra filing requirements, including those created under the 2010 Foreign Account Tax Compliance Act, more often referred to just as FATCA. However, the CRS reporting deadline for the 2019 reporting period remains unchanged at 18 September 2020. IWTA Extended the FATCA reporting deadline for the 2019 reporting period to 16 November 2020. Institutions need to disclose information about U.S. citizens with accounts overseas. How each country goes about that depends in their individual IGA with the U.S. An interest in a social security, social insurance or other similar program of a foreign government. Accounts to which you only have a signatory authority are not reported on FATCA and not included in assets valuation for FATCA qualification purposes. The Cayman Islands Department for International Tax Cooperation has therefore moved the CRS reporting deadline to 16 November 2020, as a result the amended CRS reporting deadline within the Cayman Islands will align with the recently amended FATCA reporting deadline. You must not only certify to “non-willful” conduct but also provide specific reasons that will support this certification. Furthermore, a “non-willful” statement may be enough for an examining agent to allow the returns to be processed without penalties if it is submitted as part of a disclosure outside of the OVDP or Streamlined Procedures. Therefore, it’s important to seek professional tax advice to determine if you qualify for non-willful conduct and can take advantage of the amnesty programs. Funds that have launched in 2019 or are otherwise considering the appointment of a U.S. Partnership Representative should ensure that they meet this deadline. FATCA certifications that are due on 1 July 2020 will be extended to the new date of 15 December 2020, without the need to file an extension request with the IRS. The new due date will automatically show on the FATCA GIIN registration system.This extension of time is provided as a relief measure in response to the COVID-19 pandemic. All Reporting Financial Institutions are required to establish, implement and maintain written policies and procedures to comply and these policies and procedures which must meet the requirements outlined in the CRS rules and regulations. FATCA first went into effect in 2010 and remains a fact of life for individuals with foreign assets. Here’s a primer on what U.S. individuals with foreign interests need to know about FATCA. According to the IRS, it is “conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law”. As you can see, the definition is quite broad and so gives rise to free interpretation. In that case, the trustee is required to give special disclosure or face significant penalties, as noted above. But it’s also likely that after years of confusion, more and more individuals are aware of their obligation to file. FATCA is notoriously broad, and unless U.S. persons control all of the substantial decisions a trust can be considered a foreign trust. For foreign trusts the penalties can be as high as 25% of the value of the trust or 35% of the value of the distribution made. The beginning minimum penalty for non-disclosure or late disclosure is $10,000 per asset or account and can be as high as 50% of the value. Criminal penalties can apply if non-compliance continues and is willful. Due to the COVID-19 turmoil, the European Commission has proposed to Member States an extension of the reporting deadlines under CRS and DAC 6 by 3 months. This follows a similar extension given by the IRS for FATCA reporting, and by the OECD for CRS reporting purposes. However, in respect of the 2019 reporting period only, the deadline for submission of the CRS Compliance Form2 is 31 December 2020. Additionally, the DITC has issued further updates regarding the availability of the Country-by-Country Reporting Portal ("CbCR Portal") which affects reporting due this year.

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chughcpasllp · 3 years

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Business entities which have operations in more than one state are typically required to file income tax returns in each of those states. Businesses often must report income in each state that they do business. Income allocation depends on certain rules, which vary by state. Work with a trusted tax professional to ensure you remain compliant with Multi-State Tax Services Georgia | Chugh

STEP 1: DETERMINE YOUR TAX NEXUS IN A STATE Businesses must file income tax returns in a state if they have a “nexus,” which means doing qualifying business in a state. Each state has its own rules for what establishes a tax nexus. Some states require a physical presence or employees in order to create a nexus, while others just say that “doing business” in a state creates nexus.

The first step is to analyze whether a business has tax nexus in a state. This determines whether the business is required to file an income tax return in the state or not.

Extension for Certain FBAR Filers

The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued FinCEN Notice 2019-1 on December 20, 2019. This notice extends the deadline for certain individuals that need to file a Report of Foreign Bank and Financial Accounts (FBAR) for calendar year 2019. These FBAR filers will be granted an automatic extension to April 15, 2021.

The regulations have also simplified requirements for electronic signatures for withholding agents. Withholding agents can now accept an electronically signed withholding certificate by the recipient after verifying additional documentation or information as required. The withholding agent must act in good faith and have no reason to believe that the data provided is incorrect.

STEP 2: REVENUE ALLOCATION OR “SOURCING” RULES Next, businesses need to split up or allocate their total revenue to each of the states where they have a tax nexus. Every state has its own rules for allocating revenue. Some states have “market-based sourcing,” whereby revenue is allocated to a state if the customer is based in that state.

Other states follow “cost of performance,” where revenue is allocated to the state if the income-generating activity is performed there, irrespective of where the customer is located. Specific rules vary by state.

#Multi-State Tax Services Virginia #Multi-State Tax Services #Multi-State Tax georgia

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davidkblanton-cpa-pllc · 2 years

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Reminder for U.S. citizens, resident aliens, and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is April 15. This requirement is applicable for anyone who has financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account in a foreign country. http://dkbcpa.com/

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124southmain · 3 years

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Foreign Bank Account Reporting on Cook & Co. News

New Post has been published on https://cookco.us/news/foreign-bank-account-reporting/

Foreign Bank Account Reporting

IRS reminds foreign bank and financial account holders the FBAR deadline remains April 15

The Internal Revenue Service is reminding U.S. citizens, resident aliens and any domestic legal entity that the deadline to file their annual Report of Foreign Bank and Financial Accounts (FBAR) is still April 15, 2021.

The extension of the federal income tax filing due date and other tax deadlines for individuals to May 17, 2021, does not affect the FBAR requirement.

Who must report The Bank Secrecy Act requires U.S. persons to file a FBAR if they have:

Financial interest in, signature authority or other authority over one or more accounts, such as a bank account, brokerage account, mutual fund or other financial account in a foreign country, and

The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.

Because of this threshold, the IRS encourages U.S. persons or entities with foreign accounts, even relatively small ones, to check if this filing requirement applies to them.

A U.S. person is a citizen or resident of the United States or any domestic legal entity such as a partnership, corporation, limited liability company, estate or trust.

The 2021 FBAR must be filed electronically with the Financial Crimes Enforcement Network (FinCEN) and is only available through the BSA E-Filing System website. Taxpayers who are unable to e-file their FBAR must call FinCEN at 800-949-2732, from outside the U.S. 703-905-3975.

Penalties for failure to file an FBAR Those who don’t file an FBAR when required may be subject to significant civil and criminal penalties that can result in a fine and/or prison. The IRS will not penalize those who properly reported a foreign account on a late-filed FBAR if the IRS determines there was reasonable cause for late filing.

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wilsontaxlawblog · 4 years

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Property Tax: Assessment Appeals Deadline Extended and Remote Hearings Allowed

New Post has been published on https://wilsontaxlaw.com/property-tax-assessment-appeals-deadline-extended-and-remote-hearings-allowed/

Property Tax: Assessment Appeals Deadline Extended and Remote Hearings Allowed

For California property tax purposes, effective September 29, 2020, the two-year deadline by which a county board is required to render a final determination on a property tax assessment appeal qualified application is extended until March 31, 2021. For these purposes, a "qualified application" means a pending application for reduction in assessment of property taxes that is timely filed with the county board and has a two-year deadline occurring from March 4, 2020, and before March 31, 2021. Additionally, the law allows the county boards to hear appeals remotely. Remotely conducted hearings include the use of video, audio, and telephonic means for remote appearances; the electronic exchange and authentication of documentary evidence; e-filing and e-service; the use of remote interpreting; and the use of remote reporting and electronic recording to make the official record of an action or proceeding. Wilson Tax Law Group, APLC (www.wilsontaxlaw.com) is a boutique Orange County tax controversy law firm that specializes in representation of individuals and businesses before federal and state tax authorities with audits, appeals, FBAR, offshore compliance, litigation and criminal defense. Firm founder, Joseph P. Wilson, is a former Federal tax prosecutor and trial attorney for the IRS and California Franchise Tax Board. Wilson Tax Law Group is exclusively comprised of former IRS litigators and Assistant US Attorneys from the US Attorney’s Office, Central District of California, Tax Division and Criminal Division. For further information, or to arrange a consultation please contact: Wilson Tax Law Group, APLC Newport Beach and Yorba Linda, California Tel: (949) 397-2292 (Newport Beach Office) Tel: (714) 463-4430 (Yorba Linda Office)

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sociomi · 4 years

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Deadlines For Filing Taxes For US Expats

]Much the same as most taxpayers in the United States are required to document U.S. tax returns and pay any taxes due by April 15 (except if an augmentation applies), expats living and working in another nation as a U.S. resident are likewise required to record.

Nonetheless, in case you're living abroad, the standards for expat tax recording cutoff times are somewhat extraordinary.

Tax Benefits for Expats

Expats are required to document U.S. tax returns every year, except at times tax benefits accessible to them bring about no U.S. taxes owed. In any case, if any of the accompanying circumstances concern you, it's conceivable that you may in any case owe U.S. taxes.

You live and work in a nation with lower tax rates than the U.S.

You're not taxed on your remote speculations, or

You despite everything get income from U.S. sources

Tip: taxfyle.com/tax-bracket-calculator

Evaluated Tax Payments

In case you're living outside the U.S. what's more, normally owe U.S. taxes, you may need to make quarterly assessed tax installments to the IRS. An expat tax master can assist you with calculating those quarterly installments so you can maintain a strategic distance from end-of-year punishments.

Augmentations

Your U.S. tax information is as yet given an account of a schedule year premise regardless of whether you are living in a nation that taxes on a monetary year as opposed to a schedule year premise (the United Kingdom and Australia, for instance).

Mentioning an expansion can give you more opportunity to assemble information before the finish of the tax year of the nation where you live.

FBAR Filing Deadline

Your FBAR cutoff time is equivalent to the cutoff time for your tax return. For instance, in the event that you're living abroad, at that point your cutoff time to document your return is regularly June 15, which is likewise your FBAR cutoff time. For 2019, this will be July 15, 2020. Your FBAR cutoff time is equivalent to the cutoff time for your tax return yet the Treasury consequently records expansions for all filers so you have until October 15 to document without punishments.

Visit the FBAR and FATCA Information page to find out additional.

To wrap things up, we'll record your finished return with the IRS. In the uncommon instance of IRS questions or a review, we'll help give answers and backing. In the wake of recording, your tax return will be put away in H&R Block's protected tax gateway, where it will be sheltered and simple to get to, at whatever point you need.

Taxes for expats have never been simpler. Have more inquiries concerning how to record? Get in touch with one of our Client Relationship Professionals now and we'll assist you with beginning. In case you're prepared to record with our specialists on the web, start the procedure with virtual Expat Tax Preparation from H&R Block today!

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fleshwine1 · 2 years

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Basic Questions And Answers On Form 8938

On March 4, 2009 the IRS Commissioner Douglas Shulman testified before the Subcommittee that there is no credible estimate of lost tax revenue from offshore tax abuse. In his book The Hidden Wealth of Nations, economist Gabriel Zucman estimates that U.S. persons hold US$1.2 trillion in financial wealth offshore. According to Zucman's analysis, this sheltering of assets results in US$36 billion in lost tax revenue annually in the United States. You’ll need to report the maximum value of financial accounts maintained by a financial institution that is located overseas. The amount of foreign assets for a tax year must be $50,000 on the last day of the tax year or reach $75,000 at any time during the tax year. that resource Married filing jointly and individuals living abroad have a higher filing threshold. Having assets in a foreign bank account may sound very mysterious and exotic. Refer to the Form 8938 instructions for more information on the definition of a specified foreign financial assets and when you have an interest in such an asset. Other foreign financial assets, which include any of the following assets that are held for investment and not held in an account maintained by a financial institution. You could be a Colombian drug lord with pallets of cash too large to count. Ownership of what could be billion of dollars in cash stored offshore is not reportable on a FATCA From 8938 or an FBAR . FATCA may cause foreign bankers to deal differently with American clients if it goes through congress unchanged. It is in the best interest of international financial institutions that the initiative will be adjusted in such a way that foreign bankers can continue to work with American clients. Currently, the steep withholding taxes will force many international fund mangers to deny Americans or avoid all American assets, which puts both at a disadvantage. Very literally, the person is voluntarily disclosing a failure to either file a timely Form 8938 by the deadline, or voluntarily disclosing that an earlier, timely-filed Form 8938 contained substantial errors or omissions. This statement is a legal argument with large IRS penalties at stake. For this reason, the person filing an amended Form 8938 should strongly consider consulting with and/or hiring a Form 8938 tax lawyer. This attorney will first consider the critical question of whether to file an amendment at all. You may determine the fair market value of a specified foreign financial asset based on information publicly available from reliable financial information sources or from other verifiable sources. If no information from reliable financial information sources regarding the fair market value of a reported asset is available, a reasonable estimate of the fair market value will be sufficient for reporting purposes. Refer to the Form 8938 instructions for information on how to determine the total value of your specified foreign financial assets. Even if you fill out Form 8938, you do still need to fill out an FBAR if your foreign accounts add up to $10,000 or more. If you don't file a complete and correct Form 8938, it is an automatic $10,000 penalty that can grow to a $50,000 penalty if not dealt with immediately. Basically, what this means is, traditionally the IRS has always had three years to audit a tax return. Therefore, if you made it past three years the IRS could not go back and audit it, unless in very exceptional circumstances. Recently, there have been a number of administrative requirements for disclosing local and foreign financial assets. Many foreign financial institutions must report their U.S. citizen and resident clients’ accounts worth more than $50,000. Please see a qualified tax professional to help you determine if you need to file form 8938. Remember, failure to file a correct and complete Form 8938 may result in $10,000 or more in penalties. The FBAR will still be filed directly with the Treasury Department. The 8938 will be attached to your U.S. tax return and filed with the IRS. However, it can lead to lots of confusion practically when it comes to reporting overseas assets to the IRS. To complete Form 8938 completely and accurately, you will need to have monthly account statements for any qualifying foreign financial accounts and a fair market value assessment of any valuable foreign investments. You will also need to provide information on the type and location of each foreign asset and include information of any individual or company who has shared interest. Form 8938 is a relatively new form that is required to be filed in accordance with your tax return . There are no restrictions in FATCA regulations as to what is not allowed to be used against U.S. persons. ('foreign') financial institutions are required to report asset and identify information related to suspected U.S. persons using their financial institutions. and a Master of Laws (LL.M.) in Taxation from Loyola Law School, Los Angeles, and was licensed that same year to practice law in California. Andrew limits his practice to international tax controversy, compliance, and planning, focusing in particular on IRS voluntary disclosure programs for resolving unreported and/or un-taxed foreign accounts. A Form 8938 voluntary disclosure is a filing of an amended or delinquent/late Form 8938 to the IRS. It is one of the few international tax forms included as part of TurboTax and Tax Act software. We assist taxpayers who have undisclosed foreign financial assets.Schedule an appointmentto see how we can help. We hope that the above information provides a general understanding of the FATCA requirements and Form 8938. We understand that everyone’s situation is unique, and only a qualified tax professional can ensure that all requirements are met and the form is filled out correctly and filed on time. We have the experience and up-to-date knowledge of this area of the tax code to make sure your FATCA tax reporting is complete, accurate and filed in a timely manner. Canada's former Finance Minister Jim Flaherty raised an issue with the "far reaching and extraterritorial implications" which would require Canadian banks to become extensions of the IRS and jeopardise Canadians' privacy rights. There are also reports of many foreign banks refusing to open accounts for Americans, making it harder for Americans to live and work abroad. FATCA is used to locate U.S. citizens (residing in the U.S. or not) and "U.S. persons for tax purposes" and to collect and store information including total asset value and Social Security number. On the other hand, you always file Form 8938 with your income tax return. It used to be pretty easy for Americans to get around paying their fair share of taxes by hiding money in foreign banks. To prevent this, U.S. lawmakers passed the Foreign Account Tax Compliance Act which required foreign banks to share financial information with the U.S. Aggregate foreign financial account balance of $400K on the last day of the year or aggregate total of $600K or more at any time during the calendar year. If you own foreign real estate directly and it does not generate any income, then there is no reporting for FATCA. Likewise, if you own foreign real estate directly – even if it is used to generate income – it does not need to be filed on form 8938. In 2011, and in accordance with FATCA, individuals were required to being reporting the surrender value of Foreign Life Insurance Policies on FATCA form 8938. Russia, while not ruling out an agreement, requires full reciprocity and abandonment of US extraterritoriality before signing an IGA. Russian President Vladimir Putin signed a law on June 30, 2014 that allowed Russian banks to transfer FATCA data directly to US tax authorities—after first reporting the information to the Russian government. Russian banks are required to obtain client consent first but can deny service if that consent is not given. Bangladeshi banks, which have accounts of US taxpayers, may report to the IRS, However they need prior approval of their clients. Forcing 'foreign' financial institutions and governments to collect data on US persons at their own expense and transmit it to the IRS has been called divisive and imperialist. And, if a person receives an extension to file their tax return, the time to complete Form 8938 is also on extension. When you leave the U.S. behind to live and work abroad you gain a whole new set of tax documents to add to your yearly filing requirements. If you apply for an extension to file your tax return, then you also receive an extension to submit form 8938. If this is the best path, the attorney will also gather facts, apply the law to these facts, and ultimately write the necessary reasonable cause statement to avoid Form 8938 penalties. Under Internal Revenue Code Section 7203, the intentional failure to file a required Form 8938 can, if successfully prosecuted, result in a prison sentence of up to one year and a penalty of up to $25,000. Under IRC 7206, any person who filed a Form 5471 filing that was fraudulent or false may, if successfully prosecuted, be sentenced up to three years in prison and face a penalty up to $100,000. A Form 8938 filing may be audited by the IRS at any time within the statute of limitations. Form 8938 is part of the Tax Return, and unlike the FBAR has different reporting thresholds depending on whether a person is a U.S. Resident or Foreign Resident, and whether the person is filing Single/Married Filing Separate, or Married Filing Jointly. One of the most confusing parts of filing taxes as an expat is knowing which forms you have to fill out and what income you need to report. Form 8938 is one of the more difficult forms you’ll encounter, so below we’ll guide you through what it is, who needs to file, how to file, and what may happen if you don’t. Form 8938 is designed to be used by the IRS to curb international tax evasion. The form also requests information about various foreign assets, including foreign accounts that hold assets, while the FBAR requests information only about foreign accounts. Another key difference is that the FBAR is reported on Form 114 directly to the U.S. Treasury and is generally triggered by a much lower threshold (an aggregate balance of $10,000 in all foreign accounts). Alternatively, in a non-IGA country, such as Russia, only the Russian bank will store the U.S.-person data and will send it directly to the IRS. However, the Form 8938 does expand the scope of foreign assets reported to the US. For example, an individual who holds stock in a ‘family corporation’ would be obligated to report that stock on a Form 8938, if the total value of his foreign financial assets exceeded the relevant threshold. This webinar will provide tax advisers with a practical guide to the Foreign Account Tax Compliance Act reporting for taxpayers holding foreign assets. Another point to note is that, although, virtually all of FATCA enforcement has the intention to find all noncompliant US citizens and green card holders, nonresidents alien accounts might be subject to the FBAR form 114 and FATCA filing too. For example, a nonresident alien who files a joint return with an American spouse, must file FBAR form 114 and FATCA 8938 if the filing threshold of account balance has been met. FBAR Form 114 must be filed with the Department of Treasury if the aggregate value of foreign financial accounts is $10,000 or more during the year. The financial account includes a bank account, investment account, mutual funds, trust accounts and other financial accounts. Unfortunately, the IRS website instructions for 8938 does not call this issue out clearly. However the common-sense literal meaning of the specified reporting threshold "total value of all assets more than $150K at any time during the year" will seem to validate your opinion . For instance, If I am married filing jointly and living the full year in the Philippines and I have $400,000 parked in some CD or something else and earning a 5% annual return. In the law, financial institutions would report the information they gather to the U.S. As implemented by the intergovernmental agreements with many countries, each financial institution will send the U.S.-person's data to the local government first. For example, according to Ukraine's IGA, the U.S.-person data will be sent to U.S. via the Ukrainian government. Form 8938 is used by certain U.S. taxpayers and businesses to report foreign-held assets in excess of certain amounts, depending on filing status. Beyond these qualifications, taxpayers must meet certain thresholds to be required to file Form 8938. The IRS has set different thresholds for different types of taxpayers. As you may have heard or seen in the media, the United States government has ramped up its efforts to combat tax evasion through a law known as FATCA. The law has significantly influenced the information reporting relationships between the U.S. and foreign governments. The law also has practical tax compliance implications for U.S. expats, including the requirement to file FATCA Form 8938. That is because form 8938 accompanies your tax return and is not filed independently. The threshold requirements as to whether you would have to file the form 8938 or not will vary based on whether you are considered a U.S. residents or not, and what your marital status is. Of course, in the U.S. it's 1/1 to 12/31, but that's not the case everywhere U.S. as well as foreign stock, interest in a foreign entity and any foreign financial instrument) the thresholds are lower. In the meantime, beware that FATCA is the law and will be implemented over the next 1-2 years. Our law firm expects unabated aggressive enforcement of the US tax laws, including increased criminal prosecutions and civil audit examinations. We have been advising our clients to expect the unexpected in their tax treatment and disclosure of offshore assets. You can file FBAR electronically using the BSA E-Filing System. It’s important to know that you never file an FBAR with a tax return. The filing threshold would be $24,000 if I and my spouse are both under 65. If my only income for the year is the $20,000 paid in interest on the 400k I would not have to file a tax return and that negates the requirement to file Form 8938. There are generally two forms needed to report your offshore accounts. Most commonly, Form 8938 is required to be filed by any individual who has foreign/offshore accounts or other Specified Foreign Assets worth at least $50,000 on the last date of the year. Many jurisdictions are required to have their IGAs in effect and start exchange of information by 30 September 2015. FATCA has implemented reporting requirements that significantly overlap with FBAR reporting requirements already in place. National taxpayer advocate has recommended multiple times to eliminate this duplication. You will be required to pay the regular tax that would have been due on these assets plus interest and incur an additional penalty of 40% of the tax due. Don't forget there may be criminal penalties for non-compliance. Directly held tangible assets, such as art, antiques, jewelry, cars and other collectibles, are not specified foreign financial assets. Therefore, for most (U.S. Resident) taxpayers, the form will be included as part of the 1040 submission in either April or October. While extremely unlikely, a timely-filed Form 8938 could be found so incomplete or inaccurate that it could be treated as a failure to file and subject the US person to Form 8938 penalties. Critically, if the required Form 8938 was never filed, the statute of limitations will never expire, until three years after that Form 8938 is filed late or delinquent. Additionally, for all tax return years beginning from 2011 forward, the failure to file the Form 8938 has the effect of freezing the statute of limitations on the entire tax return. To determine whether a US person has a beneficial interest in a foreign financial asset, we would look to whether the person literally benefits from the asset. For FBAR purposes, such entanglements would almost certainly be reportable because joint title or signatory authority on a foreign financial account is reportable. FATCA, on the other hand, is triggered for an individual only if you meet the criteria listed above and, if so, then the foreign account balances are reported on Form 8938 as part of your tax return. You have to report worldwide income no matter how little it is, with the exception being if your entire income falls below the filing threshold. But if you do have to file, then any amount of income must be reported. You'll have to check the box in part III of Schedule B on your 1040/1040A if you have a foreign bank account, regardless of how much money is in the account. The panel will define reportable "specified foreign assets," discuss valuation issues, and offer thorough instruction on completing Form 8938, Statement of Specified Foreign Assets. The webinar will outline how the 2017 tax reform law and subsequent IRS guidance changed the thresholds for reporting requirements. It can go up to $50,000 if the failure continues after receiving formal notification from the IRS. However, one of the scariest penalties is the unlimited statute of limitations. Aggregate foreign financial account balance of $200K on the last day of the year or aggregate total of $300K or more at any time during the calendar year. Aggregate foreign financial account balance of $100K on the last day of the year or aggregate total of $150K or more at any time during the calendar year. Aggregate foreign financial account balance of $50K on the last day of the year or aggregate total of $75K or more at any time during the calendar year. FATCA will build a database of US taxpayers with offshore accounts and holdings for the IRS. The IRS will then compare Forms 8938 filed by taxpayers with the database to make sure the details tally. Taxpayers who are not required to file an income tax return are not required to file Form 8938. Foreign currency is not a specified foreign financial asset and is not reportable on Form 8938. Interesting, the Form 8938 is very similar to the Foreign Bank Account Report . Unfortunately, the filing of one does not eliminate the obligation to file the other. Often, an individual with a mix of foreign bank accounts, foreign investment accounts and foreign retirement accounts will report the exact same set of accounts on both the FBAR and the Form 8938. It is primarily used to report foreign accounts, and not specifically hard assets. If you’re an expat who hasn't been filing FATCA information, this could affect you. In addition, many times a person will have to file a form 5471 or 8865 in the year they acquired the asset or business ownership, but not have the file that form in subsequent years – and instead would file form 8938. Tax rules regarding Foreign real estate are more complex than they need to be. With that said, it is relatively simple when it comes to FATCA Reporting. FATCA has minimum standards in its methodology of finding U.S. persons. For example, the accounts with minimum end balance of US$50,000 must be investigated with at least the U.S. indicia criteria specified. The FATCA rules do not require any FFI to not investigate or report or FATCA-process accounts as low as zero. The FFI's are not prohibited from using any indicia to identify U.S. persons. If you have any questions about reporting overseas assets, contact us and one of our tax professionals can help you ensure a correct and compliant filing. For FBAR, you need to report if you have sufficient interest in a financial entity and/or have the authority to control the assets. For example, the FBAR is used to report foreign stock accounts, but not directly owned shares of stock. It also includes foreign life insurance, pension and mutual or investment funds. Foreign Bank Account Reporting (“FBAR��) was introduced by the Bank Secrecy Act of 1970 with the intention of discouraging and preventing tax evasion. While largely ignored for many years, FBAR has been in the forefront in recent years, with the US Government now placing a lot more emphasis on the importance of compliance. The threat of harsh penalties has prompted a massive increase in reporting lately, and many people taking advantage of the voluntary disclosure programs the IRS has in place once they realize they need to file FBAR. If a person files for an extension of time to file their tax returns, the Form 8938 also automatically goes on extension. In other words, the filer does not need to file a separate extension for Form 8938. BUT, the bottom section, part 7 and 8 are also used to report whether a person has an ownership in or signatory authority over a foreign account. If so, the individual must complete that section of Schedule B. The Schedule B does not have any offshore penalties associated with it, but it may lead to FBAR and/or Form 8938 Penalties. Many foreign banks are lobbying the US Congress to change FATCA or FATCA regulations. For FBAR, individuals need to report the maximum value of their foreign financial accounts. In 2019, only Japan has signed a protocol to assist in collection of taxes to residents, including penalties for willful failure to file tax return. The reporting requirements and penalties apply to all US citizens, including accidental Americans, those who are unaware that they have US citizenship. Treasury loses as much as US$100 billion annually to "offshore tax non-compliance" without stating the source of the data. A U.S. payor includes a U.S. branch of a foreign financial institution, a foreign branch of a U.S. financial institution and certain foreign subsidiaries of U.S. corporations. Therefore, financial accounts with such entities do not have to be reported. You are filing a joint return and the value of your specified foreign asset is more than $400,000 on the last day of the tax year or more than $600,000 at any time during the year. Four 5471 is a reporting form used for individuals who have a certain interest or ownership in a foreign corporation. In any year in which you are required to file a form 5471, you are not required to file a form 8938 as well. As enacted by Congress, FATCA was intended to form the basis for a relationship between the U.S. Some FFIs responded however, that it was not possible for them to follow their own countries' laws on privacy, confidentiality, discrimination, and so on and simultaneously comply with FATCA as enacted. ] with and among financial industry lobbyists resulted in the Intergovernmental Agreements (IGA's) between the Executive Branch of the United States government with foreign governments.

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professorwilliambyrnes · 4 years

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SBA (Forgivable) Employee Retention Loan or Tax Credit for Employee Retention? Which is best for my business?

The IRS provided concrete responses to the COVID-19 virus in the tax field. First, the IRS has now formally extended the income tax filing deadline for tax year 2019 to July 15, as well as the FBAR form, FATCA form, and several other reporting forms initially left out of the IRS extension. Because this is an extension of the actual filing deadline (not just an extension of time to pay owed taxes)…

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