Expatriation and Tax Compliance – IRS Fails to Process the Tax Return

As a tax practitioner I have assisted many taxpayers for decades with expatriation issues (i.e., relinquishing US citizenship or a green card held for at least 8 tax years).  In the best case scenario, the taxpayer can avoid being treated as a "covered expatriate" (CE). Sometimes tax planning, correcting tax returns or submitting delinquent international … Continue reading Expatriation and Tax Compliance – IRS Fails to Process the Tax Return

Recent FBAR Case: IRS Seeks “Willful” Penalty $8.8M Without Much Regard for the Facts

A very recent FBAR case teaches us a few things.  My colleague, attorney John Richardson, noted this after reading the case: "When charities need to raise money they will often have a bake sale or an auction. When the US government wants to raise money it uses an 'FBAR Fundraiser'". Readers, draw your own opinion! … Continue reading Recent FBAR Case: IRS Seeks “Willful” Penalty $8.8M Without Much Regard for the Facts

Part II: Biden Proposal Changes the Taxation Game for Gifts and Inheritances – Americans Abroad Hit Hard

Today's post, Part II, was written with my colleague John Richardson, J.D. Part I of this blog post discussed President Biden's Green Book proposal that would change the tax rules for unrealized capital gains when assets are gifted or passed at death.  To recap, the major thrust of the Green Book proposal is to treat gifts … Continue reading Part II: Biden Proposal Changes the Taxation Game for Gifts and Inheritances – Americans Abroad Hit Hard

Treasury Inspector General Says FATCA is a Big Fat Flop ….So Far

The Treasury Inspector General for Tax Administration (TIGTA) just issued a damning report on FATCA:  Additional Actions Are Needed to Address Non-Filing and Non-Reporting Compliance Under the Foreign Account Tax Compliance Act (Report # 2022-30-019 4/7/22), available here. The TIGTA audit was undertaken to evaluate IRS efforts to actually use the reams and reams of … Continue reading Treasury Inspector General Says FATCA is a Big Fat Flop ….So Far

Tax Tips for the US Investor in a Foreign Start-Up: Convertible Notes

My earlier blog post, here examined some of the United States income tax consequences that could occur when a taxpayer mistakenly classifies an advance to a foreign corporation as a “loan” but that the Internal Revenue Service (IRS) treats as a stockholding interest (“equity”) in the corporation. Two follow up posts, here and here examined the … Continue reading Tax Tips for the US Investor in a Foreign Start-Up: Convertible Notes

Determinative Factors: “Debt” v. “Equity” and Your Loan to a Foreign Corporation (Part II)

My recent blog post, here examined some of the tax consequences that could occur when a taxpayer mistakenly classifies an advance to a foreign corporation as a “loan” but that the Internal Revenue Service (IRS) treats as a stockholding interest (“equity”) in the corporation.  Last week’s blog post  began examining factors used by the courts … Continue reading Determinative Factors: “Debt” v. “Equity” and Your Loan to a Foreign Corporation (Part II)

Determinative Factors: “Debt” v. “Equity” and Your Loan to a Foreign Corporation (Part I)

My earlier blog post detailed some of the US tax consequences that could occur when a taxpayer makes, what he thinks is a “loan” to a foreign corporation, but that the Internal Revenue Service (IRS) later determines should be treated as an “equity” interest in the corporation.   As set out in my earlier blog post, Treasury … Continue reading Determinative Factors: “Debt” v. “Equity” and Your Loan to a Foreign Corporation (Part I)

US Person – Made a “Loan” to a Foreign Corporation?

What happens if you make a loan to a foreign (non-US) corporation and the Internal Revenue Service (IRS) later determines that the “loan” should not be treated as a “loan” for US tax purposes?  Instead, the IRS says it should be treated as if you made a capital contribution to the corporation and therefore had … Continue reading US Person – Made a “Loan” to a Foreign Corporation?

Foreign Corporate Tax – How Will it Impact the US Taxpayer of a CFC or PFIC?

While the focus of today's post is how the United Arab Emirates (UAE) forthcoming Corporate Tax (CT) may impact US persons who are shareholders in a so-called Controlled Foreign Corporation (CFC) or Passive Foreign Investment Company (PFIC), the analysis applies equally to other jurisdictions which impose tax on the corporate entity.  We examine today the … Continue reading Foreign Corporate Tax – How Will it Impact the US Taxpayer of a CFC or PFIC?

Looking for Mr. FBAR:  FBAR Filings for Trustees, Beneficiaries & Trust Grantors

My earlier post set out certain details about the responsibility for a trust to file the Report of Foreign Financial Accounts (Form 114), or FBAR, with respect to foreign accounts it owns or is deemed to own under the FBAR rules.  Today’s discussion covers the situation when trustees, trust beneficiaries and grantors (i.e., the trust … Continue reading Looking for Mr. FBAR:  FBAR Filings for Trustees, Beneficiaries & Trust Grantors