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 →

CONFUSED? FinCEN Blows it….FBAR Due Date Now Extended Till October 31 2020

On October 14, the Financial Crimes Enforcement Network (FinCEN) caused a lot of confusion for taxpayers and their advisors concerning the filing due date for foreign (non-US) financial accounts. An incorrect posting was issued by FinCEN about the 2020 deadline to file Form 114, Report of Foreign Bank and Financial Accounts, commonly known as the … Continue reading CONFUSED? FinCEN Blows it….FBAR Due Date Now Extended Till October 31 2020 →

Section 965 Transition Tax – Enforcement & Audits Begin Next Month

By now most of my readers will have some familiarity with Internal Revenue Code Section 965, and the “deemed repatriation” or “transition tax” introduced by the Tax Cuts and Jobs Act (“TCJA”) in 2017. My earlier blog post provided significant detail about this new tax law provision which is intended to move the US international tax … Continue reading Section 965 Transition Tax – Enforcement & Audits Begin Next Month →

2020 Tax Returns & Latest Crypto Developments – In the Crosshairs

The Internal Revenue Service (IRS) just recently released the 2020 draft Form 1040. In your face right on page one, on a separately colored block: “At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency?” This question first appeared for the 2019 tax return, but … Continue reading 2020 Tax Returns & Latest Crypto Developments – In the Crosshairs →

Rich Americans…. Time to Wake Up!

Rich Americans (or foreigners with US assets), it's time to wake up and smell the coffee! Why? I am seeing more and more individuals with influence pushing for a change in the US tax laws so that wealth inequality becomes a thing of the past. Whether you agree with this position is not the point … Continue reading Rich Americans…. Time to Wake Up! →

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” →

Lifting the Veil on US Shell Companies – Third Attempt to Force Beneficial Ownership Registers

Play it again (Uncle) Sam! Two US senators are trying yet again to enact a law mandating creation of a national database of beneficial owners of US businesses. So far we have seen two unsuccessful attempts by lawmakers for mandatory beneficial ownership registers in the USA. The latest borrows heavily from the two bills that have … Continue reading Lifting the Veil on US Shell Companies – Third Attempt to Force Beneficial Ownership Registers →