Taxpayer’s FBAR WIN: “Willful” Penalty over $9.8 Million for Mere Signature Authority — Removed Entirely

Today’s post involving the case of Jonathan Zuhovitzky presents some important takeaways: The IRS can get very aggressive when it comes to assessing “willful” FBAR penalties. We see this trend is on the rise. A diligent representative, however, can get the IRS to settle an FBAR matter that is favorable to the taxpayer. It takes … Continue reading Taxpayer’s FBAR WIN: “Willful” Penalty over $9.8 Million for Mere Signature Authority — Removed Entirely →

What does Senator Warren’s Proposed Wealth Tax Mean for You?

The ‘‘Ultra-Millionaire Tax Act of 2021’’ (the “Act”) was proposed by Democratic Senators Elizabeth Warren and Bernie Sanders on March 1, 2021. Like all other tax proposals I have seen in my over 35+ years of tax practice, once the bee is in the bonnet, legislation will inevitably, inexorably, eventually blossom and flourish. The Act … Continue reading What does Senator Warren’s Proposed Wealth Tax Mean for You? →

IRS Needs Money: NRA’s Owning US Real Estate Will Help the Agency Get it Via Taxes and Penalties

Foreign investment in the US real property market is big business. US property sales to foreign buyers in 2019 totaled US$78 billion. A look at statistics from more recent years shows that the largest share of foreign residential investors are from China and Canada, followed by Mexico. The US tax laws apply to foreigners owning … Continue reading IRS Needs Money: NRA’s Owning US Real Estate Will Help the Agency Get it Via Taxes and Penalties →

Using a “Foreign Grantor Trust” – I Heard of it, but Hmmmm … I Want to Know More

Most tax practitioners and wealth planning professionals have heard of the “foreign grantor trust” (FGT) but many are unsure of what it is, how it works, or what it can accomplish in US tax planning. My post today provides an overview. The use of a so-called “foreign grantor trust” is a traditional planning technique that … Continue reading Using a “Foreign Grantor Trust” – I Heard of it, but Hmmmm … I Want to Know More →

Seriously? IRS Assesses US$5.1 Million FBAR Penalty for “Signature Authority”

I have been keeping readers up to date with the current controversy surrounding imposition of an FBAR penalty for “willful” violations – is it limited to a $100,000 cap or can the penalty, if greater, be assessed at 50% of the value of the unreported account? More detailed background on this issue is available at my … Continue reading Seriously? IRS Assesses US$5.1 Million FBAR Penalty for “Signature Authority” →

Warning: Marriage to a ‘Foreigner’ May Be Hazardous to Your Tax Health

Recently, I am seeing more and more married couples of dual nationality (with one US individual partner) struggling with the US tax issues wrought by such a "mixed marriage". Some are same sex couples married under the laws of a foreign (non-US) jurisdiction. Believe it or not, marriages taking place in a foreign country (whether … Continue reading Warning: Marriage to a ‘Foreigner’ May Be Hazardous to Your Tax Health →

Check-the-Box Election: Is it Really that Simple?

A very important building block when establishing a business is selecting the best type of entity from both a legal and tax perspective. This “choice of entity classification” can make a huge difference in liability protection and tax outcome. When an international business is involved, it should come as no surprise that the complexities only … Continue reading Check-the-Box Election: Is it Really that Simple? →

COVID-19 Relief: IRS Helps Foreigners Having Prolonged Presence in the US

In Rev. Proc. 2020-20, the Internal Revenue Service (IRS) provided relief to foreign citizens who were caught out by travel disruptions occasioned by the corona virus, and as a result, remained in the United States for too many days thereby causing them to be subject to US income tax. Under the Revenue Procedure, the IRS will … Continue reading COVID-19 Relief: IRS Helps Foreigners Having Prolonged Presence in the US →

Tax Filing and the Foreign Spouse – “Married Filing Separately” versus “Head of Household”

Tax filing time is upon us! Selecting the best tax filing status is an important element of tax planning and should not be taken lightly. For US persons who are married to foreigners (so-called "nonresident alien individuals", or "NRA"), special considerations come into play. Making the decision how to treat your foreign spouse for US … Continue reading Tax Filing and the Foreign Spouse – “Married Filing Separately” versus “Head of Household” →

ATTENTION! Married Filing Separately? $5 of Gross Income? Must File US Income Tax Return!

Yes, that did read US$5. Not $50. Not $500……This measly number will heavily impact Americans abroad who are married to non-US spouses. In many instances, the US spouse will file separately and keep the non-US spouse completely out of the US tax picture. This may not always be the best tax strategy but in some … Continue reading ATTENTION! Married Filing Separately? $5 of Gross Income? Must File US Income Tax Return! →