Taxpayer Denied “Reasonable Cause” When Preparer Fails to e-file Returns

How difficult is it for a taxpayer to establish “reasonable cause” such that penalties for various tax mishaps can be forgiven or abated? It’s very difficult. The recent case of Wayne Lee v. United States, No. 22-10793 (11th Cir. 10/24/23) underscores the point and reminds taxpayers to get reliable tax advisors and return preparers. Going … Continue reading Taxpayer Denied “Reasonable Cause” When Preparer Fails to e-file Returns →

Dividends Paid by Foreign Corporations – Are they “Qualified” & Eligible for Capital Gain Rates?

In IRS Notice 2024-11, the Internal Revenue Service (IRS) updated the list of treaties that can provide a foreign corporation with the special status of being a “qualified foreign corporation” (QFC). The list was updated to include the treaty with Chile, which entered into force on December 19, 2023, and to remove the treaty with … Continue reading Dividends Paid by Foreign Corporations – Are they “Qualified” & Eligible for Capital Gain Rates? →

Too Many Days in America? The “Closer Connection Exception” May Save the Day (& the Tax Hit)

Most people have heard of it, but not many truly understand it. I will hear a foreign individual proudly state he cannot be taxed by the US since he has no income from US sources and has not spent 183 days or more in the US in any calendar year. Therein lies the “misunderstanding” and … Continue reading Too Many Days in America? The “Closer Connection Exception” May Save the Day (& the Tax Hit) →

IRS E-Filing Plan: No Solution for the Overseas American

The Internal Revenue Service (IRS) has been examining the possibility of a direct e-filing system. Can you imagine that bypassing tax preparation software or return preparers and direct filing with the IRS may be on the horizon? The IRS’s contemplated plan would enable users to directly prepare and file their tax returns with the U.S. … Continue reading IRS E-Filing Plan: No Solution for the Overseas American →

Tis the Season! Giving / Getting Gifts from a Foreign Entity?

Holidays are soon upon us, and many people will be making gifts to family and friends. It is very common to make gifts of cash – typically sending funds from a bank account to the recipient’s account. When gifts are made by foreign persons to US persons, there are many US tax traps for both … Continue reading Tis the Season! Giving / Getting Gifts from a Foreign Entity? →

The New York Times, USSCt Justice Clarence Thomas, Juicy Gifts & the Tax Lessons!

Sometimes I like to bring up issues occurring strictly in the USA and take a peek at how the US tax rules would shake out if foreigners were involved in the transactions. It always makes for a much more complicated analysis. Here is one for today! Let’s look at the juicy story of Justice Clarence … Continue reading The New York Times, USSCt Justice Clarence Thomas, Juicy Gifts & the Tax Lessons! →

Tax Court Petition Filed Late? Taxpayer Beats the Clock with Third Circuit Decision

You may remember from my last post that for the Swiss (I know them so well, being married to one for almost 4 decades), punctuality is not merely a nicety, or a bonbon in the huge dessert buffet of life. Punctuality is highly valued and de rigueur. So it is with the US tax rules when … Continue reading Tax Court Petition Filed Late? Taxpayer Beats the Clock with Third Circuit Decision →

Is the US Tax Court Swiss? Taxpayer Loses When Petition Filed 11 Seconds Late

I’ve been married to a Swiss for almost 40 years. I know the critical importance of timeliness. When you say “I’ll be ready in 5 minutes”, believe me, that Swiss watch is ticking. And, so it is with the Tax Court and filing a Tax Court petition in response to an Internal Revenue Service (IRS) … Continue reading Is the US Tax Court Swiss? Taxpayer Loses When Petition Filed 11 Seconds Late →

TikTok’s (Wrong) Tax Advice and How the Trust Tax Rules Really Work

My earlier post describing TikTok tax advice as to the magical workings of the “Non-Grantor Irrevocable Complex Discretionary Spendthrift Trust” (NGICDST) proved highly popular. The NGICDST is being marketed heavily on social media platforms and certain business websites. After the Internal Revenue Service (IRS) discovered the promotional material, the agency shut down any notion that … Continue reading TikTok’s (Wrong) Tax Advice and How the Trust Tax Rules Really Work →

Should You File a Protective Refund Claim for the Transition Tax While Waiting for the US Supreme Court? Moore Might Mean More!

Part I of my blog post set out the background and discussed the debate over Internal Revenue Code Section 965 “transition tax” or “mandatory repatriation tax” enacted in 2017. The Supreme Court recently decided to review the 9th Circuit case of Moore v. United States bringing this controversial tax back into the spotlight. The Court … Continue reading Should You File a Protective Refund Claim for the Transition Tax While Waiting for the US Supreme Court? Moore Might Mean More! →