Third Party Reporting of Virtual Currency: Who’s Telling the IRS What?

Many of my readers are aware that I have written various blog posts about the US tax issues that surround virtual currency. Some have asked, (perhaps innocently, perhaps not), about so-called “third party reporting” of virtual currency to the Internal Revenue Service (IRS) .  For those who do not know what this means – it’s … Continue reading Third Party Reporting of Virtual Currency: Who’s Telling the IRS What?

No IRS! The Sky is NOT the Limit….MAJOR FBAR WIN! Penalty is Per FBAR Form, Not Per Account

As all my readers know, the Bank Secrecy Act (BSA) has been requiring US taxpayers to report certain foreign financial accounts and retain detailed records about them.  Failing to file or to properly report all foreign accounts on the notorious “FBAR” (FinCEN Form 114, Report of Foreign Bank and Financial Accounts) can result in very high … Continue reading No IRS! The Sky is NOT the Limit….MAJOR FBAR WIN! Penalty is Per FBAR Form, Not Per Account

Bye-Bye Shell Companies! Beneficial Ownership Reporting Now Required by the USA 

It’s finally here!  We now have a new law mandating creation of a national database of beneficial owners of US businesses (and foreign businesses registered to do business in the US).  It’s been a long time in coming and is being hailed as a huge anti-corruption and anti-money laundering reform .  There have been several … Continue reading Bye-Bye Shell Companies! Beneficial Ownership Reporting Now Required by the USA 

US Person Inheriting Assets from a “Foreigner” or Through a Foreign Trust

Many individuals have questions about the US tax consequences of foreign (non-US) assets inherited from a non-US individual who has passed away. They want to know whether US tax reporting is required, or if they must pay US tax on the inheritance. Some ask about the US tax upon a later sale of the inherited … Continue reading US Person Inheriting Assets from a “Foreigner” or Through a Foreign Trust

Virtual Currency:  IRS Sheds More Light for 2020 Tax Returns

The US Internal Revenue Service (IRS) released instructions to the draft 2020 Form 1040 on Oct 23rd.   It may be recalled that a virtual currency question was introduced for the first time on the 2019 Form 1040 on Schedule 1. Not all taxpayers are required to complete Schedule 1. Now, the 2020 Form 1040 places the question … Continue reading Virtual Currency:  IRS Sheds More Light for 2020 Tax Returns

Americans Abroad: IRS Issues 2020 Form 2555 and Instructions Detailing COVID-19 Relief

Americans working abroad are usually eligible to exclude certain foreign earned income (wages, compensation for services) from US taxable income under the rules governing the Foreign Earned Income Exclusion (FEIE).  In addition they may be able to exclude certain amounts paid for foreign housing using the Foreign Housing Exclusion (FHE).  Both are governed by Internal … Continue reading Americans Abroad: IRS Issues 2020 Form 2555 and Instructions Detailing COVID-19 Relief

IRS Stealth: Delinquent Information Submission Procedure Penalties May Apply Without Considering “Reasonable Cause” Statement

On November 5, the Internal Revenue Service (IRS) made life more difficult for taxpayers who may have missed some foreign information return filings.  The IRS quietly revised one of the four options to correct for missing information returns with respect to a US taxpayer’s interest in any offshore/foreign assets and holdings (e.g., Form 8938, Form … Continue reading IRS Stealth: Delinquent Information Submission Procedure Penalties May Apply Without Considering “Reasonable Cause” Statement

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

Foreign Trust Forms 3520 and 3520-A Penalties: A Potential Gold Mine for the IRS

The Internal Revenue Service (IRS) is looking for money.  As part of the hunt, it has instituted various “campaigns” (full list here) aimed at areas in which there is greater taxpayer noncompliance that may involve significant tax dollars and penalties. One such campaign involves the failure by a US person to file complex information-reporting tax … Continue reading Foreign Trust Forms 3520 and 3520-A Penalties: A Potential Gold Mine for the IRS