Virginia La Torre Jeker, J.D. — US tax matters affecting international clients
In a holding by the US Tax Court on April 8, 2024, the case of Raju J. Mukhi v. Commissioner of Internal Revenue brought into sharp focus the principle of stare decisis and its implications for tax law. The Tax Court rejected the IRS’ assessment of penalties under Section 6038(b), for failure to file Form … Continue reading Taxpayer Wins Again on 5471 Penalty – IRS Cannot Assess
Discovered an error in a prior year’s tax return? Everyone is busy preparing US tax returns for 2023. Taxpayers should note that thorough preparation of the current year’s tax return should include a review at least, of the return filed for the prior tax year. (Taxpayers using new return preparers should be wary if … Continue reading To Amend or Not to Amend – That is the Question
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
My recent blog posts here, here and here have been examining the US estate tax and its impact on foreign investors in the US. The posts explored estate tax basics, the concepts of “domicile”, ”situs” of assets, the troublesome Federal Transfer Certificate and the paltry estate tax exemption of USD60,000 given to non-US non-domiciliaries for … Continue reading How do Estate Tax Treaties Work? They Don’t if the Decedent is a US Citizen or Domiciliary
My recent and upcoming blog posts are examining the US estate tax and how it often comes as an unwelcome surprise to the foreign investor in the US and to the foreign heirs when the investor passes away. The family is often left to clean up the mess if the investor has not properly planned … Continue reading US Estate Tax – What is “Situs”? Location of Assets Makes a World of Difference
My recent blog posts (e.g. here, and here) emphasized how important it is for Americans who are investing in foreign (non-US) assets to understand the US tax consequences of making that investment. Far too often I have seen individuals invest substantial amounts of money without knowing the tax impact of that infusion of hard-earned cash. … Continue reading The Real World: When Foreigners Die Owning US Assets – Estate Tax, Federal Transfer Certificate and Related Troubles
As will be recalled from the previous blog posting discussing the basics of so-called "Controlled Foreign Corporations" (CFC), a United States shareholder of a CFC can possibly be treated as having received “dividend” income at various times. These are when the US shareholder has (i) current income inclusions from the CFC under the anti-deferral regime (Subpart F … Continue reading “Qualified Dividend Income”: How do the Rules Apply to “Controlled Foreign Corporations?” (Part II)
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?
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)
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?
Virginia - US TAX TALK 