In early April, the House of Representatives passed a bill that would re-design the Internal Revenue Service (IRS). It had a nifty and promising title, the "Taxpayer First Act of 2019". Despite its sweet title, part of the bill would prohibit the IRS from providing taxpayers with free tax preparation software. The for-profit tax preparation … Continue reading House Blocks IRS Free-File Tax Help: Who Cares!
My earlier blog post covered some basics about Form 5472, including how the Form helps the US Internal Revenue Service (IRS) learn about foreign-owned businesses in the US and when to audit them, the meanings of certain terms such as what is meant by a “reportable transaction” with a “related party”, and the situation requiring filing … Continue reading Head’s Up! Foreign-Owned Single Member US LLC: Increase in Penalties for Form 5472
Sweeping tax reform was signed into law by President Trump on December 22, 2017. Now that tax returns are being prepared for the 2018 year, individuals are more keenly feeling the impact of the “Tax Cuts and Job Act” (“TCJA”). I’ve had numerous calls on two questions by Americans overseas who own a foreign residence. … Continue reading Overseas Home? Mortgage Interest, Foreign Real Property Taxes & New US Tax Law – Any Workaround?
Regular readers of my tax blog will not be surprised by the title of this post and the content it hints at delivering. They likely realize by now that the American person abroad is not looked upon favorably by the US tax laws. The tax laws look at anything “foreign” with a jaundiced eye when … Continue reading US Tax Law to American Abroad – “How Do I Hate Thee, Let Me Count the Ways”
Americans in Dubai / Singapore – If you are not tax compliant, time is really running out. As reported by Bloomberg on March 8th, an official with the Internal Revenue Service (IRS) Criminal Investigation (CI) unit announced at a Washington DC Federal Bar Association event that CI is considering Dubai and Singapore as its "next … Continue reading Dubai (and Singapore) – Now IRS Targets for Offshore Investigations
Crypto currency is on the decline which means that many Americans may have experienced losses with their virtual currency transactions. According to CCN the valuation of the crypto market fell by $4 billion from $130 billion to $126 billion, dropping to the $120 billion region for the first time since mid-February. One must remember, that … Continue reading Bitcoin and Your Taxes: Do You Know What to Do?
I have been keeping readers up to date with the current controversy surrounding imposition of an FBAR penalty for “willful” violations. Here’s an overview of where we are to date. “Willful” Penalty Ceiling: The Cases So Far Last year, two district courts had limited the FBAR “willfulness” penalty to $100,000 because the Department of Treasury did … Continue reading IRS Hits the Jackpot: Another District Court Rejects $100,000 Cap on FBAR Penalty
The Internal Revenue Service (IRS) just issued proposed Regulations dealing with the “Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income (“GILTI”)”. The proposed regulations mark a big win for Americans running their businesses through foreign corporations. The regulations are scheduled to be published in the Federal Register tomorrow. In part, they address the … Continue reading Americans Abroad: Taxpayer GILTI Victory Just Announced in Proposed Regulations!
Section 199A of the Internal Revenue Code was created by the Tax Cuts and Jobs Act (TCJA). If a taxpayer can utilize the new law, the taxpayer can save a bundle in taxes since the provision provides a 20% deduction for so-called “qualified business income” ("QBI”). The American abroad will not be so lucky since … Continue reading QBI Deduction? Not for the American Abroad! AND Next Year, IRS Will Be Checking Your Numbers!
I have written a few blog posts on the thorny side of filing US income tax returns, FBARs and various information returns when one is married to a non-resident alien (NRA) spouse. It may be helpful to read those posts here and here before embarking on this one as the earlier posts set out some … Continue reading Tax Court, IRS Speak with Forked Tongue? Section 6013(g) Election to Treat Foreign Spouse as US “Resident”