I was hoping that tax reform would have done away with, or at least modified, the troublesome provisions surrounding the PFIC or so-called “Passive Foreign Investment Company”. This was not to be and it prompted me to review the PFIC rules and count the ways they cause trouble! What is a PFIC? A PFIC is … Continue reading PFICs – The Fairytale Definition That Lives Happily Ever After…
Part I of this blog post explained how Form W-8BEN is used for so-called Chapter 3 income tax withholding purposes covering topics such as the types of income subject to US-source withholding when paid to a foreign (non-US) person; exemptions, length of time for validity of the Form. It also provided an overview of how … Continue reading PART II – Forms W-8BEN & W-8BEN-E: What Are They Used For? Which One Must I Complete?
As many will remember, the Offshore Voluntary Disclosure Program (OVDP) closed on September 28th with the promise that the Internal Revenue Service (IRS) would issue new guidance on voluntary disclosures made after that date. The guidance just arrived in the form of a 5-page Memorandum by Kristen B. Wielobob, Deputy Commissioner for Services and Enforcement, … Continue reading It’s Finally Here: The IRS Bible for Voluntary Disclosures
Not surprisingly over 1,000 individuals expatriated (gave up US citizenship or long term residency) in the third quarter of 2018. This is according to the most recent “Name and Shame” list published by the US Treasury in the Federal Register on November 19, 2018. Most likely the real number is higher, as the accuracy of … Continue reading Gifting Your Way to Freedom – How TCJA Can Help You Expatriate
As many of my readers may know, there is a 30% withholding tax imposed on certain payments to foreign persons (whether individuals or entities) by US-payors. The 30% rate may be reduced or eliminated if a relevant treaty can apply. Withholding is required only for particular types of income provided the income has not been … Continue reading “US Source” Income – What Is It? Why Should I Care?
I was recently asked about the tax problems faced by Americans who move overseas. Unfortunately, there are many US tax difficulties faced by Americans abroad. In order to make some sense of this vast topic, let's put the major problems into several basic categories. Once aware of the problems lurking out there, you can get … Continue reading Before You Think of Becoming an “American Abroad”, Read This….
My prior blog post gave details about how the Form 8938, an important “Foreign Account Tax Compliance Act” (FATCA) enforcement weapon, is currently failing. IRS enforcement efforts are soon on the upswing. This is because the Treasury Inspector General for Tax Administration issued a report over the summer pointing out the IRS' failures with regard … Continue reading FORM 8938: Infinite Statute of Limitations & Everything Else You Need to Know
On July 5, 2018, the Treasury Inspector General for Tax Administration ("TIGTA") issued a final audit report covering the enforcement efforts of the US Internal Revenue Service (IRS) of the “Foreign Account Tax Compliance Act” (the infamous "FATCA"). Readers may recall that FATCA was enacted in 2010, but it has been a very rocky road … Continue reading Form 8938: How This IRS FATCA Weapon is Failing
It is usually very quick and easy to set up a foreign corporation - say, one in Belize or in the Cayman Islands. What is not so easy is working one's way through the quagmire of required Internal Revenue Service (IRS) reporting and US tax obligations simply because you are a US person owning shares … Continue reading Quicksand! US Owners of Foreign Corporations
One Country, Two Citizenships: John Richardson Interviews Virginia La Torre Jeker. Most people don’t know that the US has two kinds of citizenship – “Immigration” citizenship and “Tax” citizenship. Tax citizenship, the monkey on your back, is hard to shake off! Watch the interview, here. http://www.youtube.com/watch?v=4Kq94qCiNSY https://www.youtube.com/watch?v=