Timely US Tax Filings:  What are the Rules for Taxpayers in Foreign Countries?

Quite often, US taxpayers living in a foreign country are faced with tight deadlines for timely filing of tax returns, refund claims, documents and the like with the Internal Revenue Service (IRS)  before the statute of limitations expires.  They are often confused as to how to send these physical documents to the IRS and be … Continue reading Timely US Tax Filings:  What are the Rules for Taxpayers in Foreign Countries?

FBAR Traps: International Couples, Powers of Attorney

Meet the Zuhovitzky’s, the quintessential international couple: Jonathan (a naturalized US citizen and Israeli citizen living in Germany) and Esther (an Austrian and Israeli citizen who was never a US citizen or resident).  I blogged about them and the IRS’ aggressive stance on asserting so-called FBAR penalties against Jonathan for having a power of attorney … Continue reading FBAR Traps: International Couples, Powers of Attorney

Covered Expatriates, Exit Tax and the Principal Residence

My earlier blog post discussed the rules that apply to a US taxpayer who sells his personal residence, whether located abroad or in the US. If the home qualifies as the “principal residence” and other requirements are satisfied the taxpayer may exclude up to US$250,000 ($500,000 for joint returns) of taxable gain from income.  As … Continue reading Covered Expatriates, Exit Tax and the Principal Residence

Malta Pension Plan – IRS Knocks It Out.. and Yes, “I Told You So…..”

Just in time for Christmas, we have two big gifts. Both relate to Malta Pension Plan schemes. If you are too busy to read the post because of the Christmas rush,  in a nutshell, they've just been knocked out and the Internal Revenue Service (IRS) is hot on the trail for taxpayers who used them! … Continue reading Malta Pension Plan – IRS Knocks It Out.. and Yes, “I Told You So…..”

HELP! What to do When Foreign Law Impacts the US Tax Analysis of My Case?

Given today’s global economy it comes as no surprise that US taxpayers and the Internal Revenue Service (IRS) must increasingly consider the interactions between US and foreign laws when determining the US tax consequences of a particular transaction.  In today’s world, it is no longer possible for practitioners to ignore the possible implications of another … Continue reading HELP! What to do When Foreign Law Impacts the US Tax Analysis of My Case?

Is IRS Finally Seeing the Light on Foreign Information Returns?

Bloomberg Tax - I invite readers to enjoy my recently published article, copied in full below. Reproduced with permission. Published December 3, 2021. The Bureau of National Affairs, Inc. (800-372-1033) http://www.bloombergindustry.com published in Tax Insights and Commentary News, online here.   Various options are available to correct the problem of missing information returns for U.S. … Continue reading Is IRS Finally Seeing the Light on Foreign Information Returns?

Americans Abroad: Sale of “Principal Residence”, Gain Exclusion, Unforeseen Circumstances & COVID-19

Section 121 of the US Internal Revenue Code allows for the exclusion of up to $250,000 ($500,000 for a married couple filing jointly) in gains arising from the sale of a "principal residence."  The exclusion applies whether the residence is located Stateside or overseas.  The tax law has very specific rules. Aside from the fact that … Continue reading Americans Abroad: Sale of “Principal Residence”, Gain Exclusion, Unforeseen Circumstances & COVID-19

IRS Determined to Collect FBAR Penalties  – “We Have Ways of Making You Pay” … Even if Your Money is Outside the US

The case of US v Schwarzbaum (decided October 26, 2021), discussed in today’s blog post, serves as a harsh reminder of how far the US government will go to collect FBAR penalties. The importance of posting about this latest development is to underscore how aggressive FBAR penalty collection efforts are now becoming.  Of course, this case … Continue reading IRS Determined to Collect FBAR Penalties  – “We Have Ways of Making You Pay” … Even if Your Money is Outside the US

Caught in the US Tax Trap: PART II How Does a Non-US citizen Become a US “Resident” – Taxed on WORLDWIDE Income?

Last week's blog post looked at one way that a non-US citizen can become subject to US income tax on his or her worldwide income - simply by getting a US green card.  Today's post looks at the other way one can fall into the US tax trap. “Substantial Presence” in the US An individual … Continue reading Caught in the US Tax Trap: PART II How Does a Non-US citizen Become a US “Resident” – Taxed on WORLDWIDE Income?

Caught in the US Tax Trap: Part I How Does a Non-US citizen Become a US “Resident” – Taxed on WORLDWIDE Income?

US “residents” are subject to tax on income derived from all sources. That means they are subject to tax on their worldwide income regardless of the source of that income.  So, for example, dividends earned from a French company are taxable, as is gain on the sale of rental property located in Hong Kong; prize money won … Continue reading Caught in the US Tax Trap: Part I How Does a Non-US citizen Become a US “Resident” – Taxed on WORLDWIDE Income?