IRS Tells You if You are Married and to Who! Yes, IRS has Rules For That!

An interesting case was recently decided. I blog about it today to warn those who marry or divorce in a foreign country about the US tax complications that can arise.  It’s an area fraught with pitfalls and can impact the couple in many ways, including of course, their US tax planning.  Let’s have a brief … Continue reading IRS Tells You if You are Married and to Who! Yes, IRS has Rules For That!

Constitutionality of NIIT and Passport Revocation Rules Stand: Taxpayers Sacrificed in US Supreme Court and Tax Court  

The US Supreme Court and the Tax Court issued two big decisions impacting many US individual taxpayers. Here’s a short and not-so-sweet summary of what went down: The 3.8% Net Investment Income Tax Stands On June 17, 2021, by a clear majority vote,  the Affordable Care  (ACA) was upheld by the US Supreme Court, including … Continue reading Constitutionality of NIIT and Passport Revocation Rules Stand: Taxpayers Sacrificed in US Supreme Court and Tax Court  

Checked “YES” to the Crypto Question on Form 1040? Have NFTs? Get Ready….  

It’s been no secret that the Internal Revenue Service (IRS) has cracked down on crypto.  With many more taxpayers investing in cryptocurrencies the agency has targeted crypto investors who are often not complying with the US tax rules (many unknowingly). IRS “John Doe” subpoena activity of crypto exchanges has been successful with the biggies such … Continue reading Checked “YES” to the Crypto Question on Form 1040? Have NFTs? Get Ready….  

All You Need to Know about the 3.8% Medicare / Net Investment Income Tax & how Pres. Biden Will Expand Who Pays It

Under current law, limited partners who materially participate in a partnership's business are not subject to self-employment tax. Members of an S corporation who materially participate in the S corporation's business are subject to self-employment tax only on "reasonable compensation" received in their capacity as an “employee”. These individuals are also exempt from the 3.8% … Continue reading All You Need to Know about the 3.8% Medicare / Net Investment Income Tax & how Pres. Biden Will Expand Who Pays It

IRS Wants Crypto Information from Foreign Countries

Last week during testimony to the Senate Finance Committee (SFC), US Internal Revenue Service Commissioner (IRS) Charles Rettig stated that Congress needs to provide clear statutory authority in order for the IRS to collect information on cryptocurrency transfers valued over US$10,000.  It is believed that such transfers are generally not being reported. Cryptocurrency market capitalization … Continue reading IRS Wants Crypto Information from Foreign Countries

FBAR Developments: “Non-Willful” Taxpayer Wins & “Willful” Dead Taxpayer Loses Beyond the Grave!

Here are two recent cases regarding FBAR - One, a taxpayer win and the other a taxpayer loss. Let's start with the good news: The taxpayer win! The penalty for non-willful FBAR violations is generally US$10,000 per violation.  The question is, what is the "violation"? The Internal Revenue Service (IRS) believes this penalty applies for … Continue reading FBAR Developments: “Non-Willful” Taxpayer Wins & “Willful” Dead Taxpayer Loses Beyond the Grave!

Pres. Biden’s Tax Plan: Capital Gains Rate Increase Will be Retroactive & “Forced” Transfers at Gifting or Death Will be Taxed

My earlier blog post addressed the issue whether retroactive tax legislation can constitutionally be enacted, in effect “setting back the clock” and making a law effective as if it had been enacted at an earlier point in time. In that post, I explained that the topic held special importance since it is no secret that the … Continue reading Pres. Biden’s Tax Plan: Capital Gains Rate Increase Will be Retroactive & “Forced” Transfers at Gifting or Death Will be Taxed

State Income Taxes When Residing Overseas… They Hate to Let You Go!

When a taxpayer is a “resident” of a State which imposes income tax, he has to pay State tax on worldwide income, not just the income earned from sources within that State. If a taxpayer is working and residing overseas for an indefinite period of time and may or may not return to the State … Continue reading State Income Taxes When Residing Overseas… They Hate to Let You Go!

Closing the International Tax Gap: IRS Doing Virtually Nothing With FATCA

Today’s blog post discusses the overall and international tax gaps, takes a look at the offshore world and how enforcement of the tax laws is faring (hint - not so good). It summarizes some important testimony given on May 11, 2021 by the Honorable J. Russell George, Treasury Inspector General for Tax Administration before the … Continue reading Closing the International Tax Gap: IRS Doing Virtually Nothing With FATCA

An Eye for Moving Abroad? Bye-Bye USA, Hello Tax Complications!

Bloomberg Tax - I invite readers to enjoy my recently published article, copied in full below. Reproduced with permission. Published April 20, 2021. The Bureau of National Affairs, Inc. (800-372-1033) http://www.bloombergindustry.com. Daily Tax Report International, published online here and in PDF format here. It has certainly been a year to remember. So many changes have … Continue reading An Eye for Moving Abroad? Bye-Bye USA, Hello Tax Complications!