Tag Archive for Tax Blog

FBAR US Citizens Alert!

US CITIZEN ALERT!

I have just learned from an enrolled agent that the new Treasury Dept./IRS rules have become much stricter and this involves you if you have ANY foreign deposit account(s), no matter what the balance was for the year.
Forget the $10,000.00 maximum balance! If you have any foreign bank or other deposit account you need to file the FBAR form FinCEN Report 114 electronically on the BSA website.  The old TD F 90-22.1 form is no longer valid.

The new web filing is supposed to be better (easier) but whose idea was it? Big government, so if you do not want to do it yourself contact someone with experience. Read More

Written by | Posted in FATCA • FBAR

A Sudden Death For The Canadian “Immigrant Trust”!

As a general rule, Canadian residents are subject to Canadian income tax on their worldwide incomes. This is true regardless of whether or not such income is remitted to Canada.

In order to prevent Canadians from deferring or avoiding tax on investment income by forming offshore trusts, there are complex rules in section 94 of the Income Tax Act (“the Act”) that generally come into play whenever a Canadian resident makes a “contribution” to an offshore trust. In general terms, such trusts are deemed to be resident in Canada for most purposes of the Act, and the Canadian “contributor” is jointly liable with the trust for any Canadian tax liability. Read More

Written by | Posted in International

Crimes Under The IRC — Part 2 of 2 – Crimes of Commission: Tax Perjury, Aiding Another and Hiding Assets

Knowingly filing a false tax return and aiding another to do so are violations of the IRC, Section 7206. Briefly summarized, those violations encompass:

• Tax perjury — knowingly signing a false tax return that is false
• Willfully aiding another person to commit tax fraud
• Hiding assets with the intent to evade or defeat the assessment of taxes or in connection with a tax settlement or compromise offer

Penalties are stiff

The law says that anyone convicted of the foregoing is guilty of a felony. An individual can face a fine of $250,000 ($500,000 in the case of a corporation or go to prison for not more Read More

Written by | Posted in IRS • Tax Fraud/Evasion/Crimes

You Can Now Pay Your Taxes On IRS Website

The Internal Revenue Service announced the successful start of its new web-based system — IRS Direct Pay — on IRS.gov, which lets taxpayers pay their tax bills or make estimated tax payments directly from checking or savings accounts without any fees or pre-registration.

IR 2014-67 further reports that “To date, more than 150,000 taxpayers have paid more than $340 million in taxes through the new IRS Direct Pay system. With IRS Direct Pay, taxpayers receive instant confirmation that the payment has been submitted, and the system is available 24 hours a day, 7 days a week. Bank account information is not retained in IRS systems after payments are made. Read More

Written by | Posted in Individual • IRS

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 2 – 2.5.2)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

2.5 ADEQUATE REASONS

2.5.2 The relevance of s 74 of the Income Tax Act Read More

Written by | Posted in Africa • Audit

IRS To Commence Pilot Program For Penalty Relief For Small Business Retirement Plans

On Thursday, May 22nd The Internal Revenue Service (hereinafter the “Service”) announced that it will begin a one-year pilot program in June to help small businesses with retirement plans that owe penalties for not filing reporting documents.

By filing current and prior year forms during this pilot program, small businesses can avoid penalties. The Service issued Rev. Proc. 2104-32 earlier this month describing the scope and application of the program. The Service indicated that it is also reaching out to certain small businesses that maintain retirement plans that may have been unaware that they had a filing requirement. The Service estimates that the new program will bring a significant number of small business owners into compliance with the reporting requirements. Read More

Written by | Posted in IRS • Retirement • Small Business

The IRS Gives Foreign Financial Institutions Additional Time to Register for FATCA

Under one of the provisions of the Foreign Account Tax Compliance Act (“FATCA”), withholding agents are required to withhold 30% of certain payments to a foreign financial institution (“FFI”) unless the FFI has entered into an agreement with IRS to report certain information with respect to U.S. accounts in an effort to bring an end to international tax evasion. Recently, in Notice 2013-43 and Notice 2013-31 IRB 113, the Treasury Department and the IRS extended the deadline for certain FFIs to implement certain FATCA requirements.

What is FATCA?

FATCA is an IRS initiative aimed at preventing U.S. citizens and taxpayers from avoiding paying income tax on their foreign investments and accounts. The law was enacted Read More

Written by | Posted in FATCA • FBAR • International

Should I Stay or Should I Go? – Part 9

Answers to the Most Frequently Asked Questions Regarding OVDP

As a tax attorney specializing in the Offshore Voluntary Disclosure Program (OVDP), nary a day goes by that I don’t get a call from a person inquiring about the OVDP. The questions asked are relatively the same. After a while, I began to make a list of the most frequently asked questions. Below are my answers to them: (continued)

XII. I have properly reported all of my taxable offshore income. I only recently learned that I should have been filing FBARs in prior years to report my personal foreign bank account. Must I come forward to disclose this?

Read More

Written by | Posted in FBAR • OVDP

Taxpayers Rights When Audited By Tax Authorities In South Africa (Chapter 2 – 2.5)

Posted in sections, this is my Doctoral Thesis on taxpayers rights when audited by the tax authorities in South Africa – equally applicable to many English-based law systems in Africa and abroad (eg. India). This will be of particular use to any tax practitioners doing work in Africa and in other English-based legal systems around the world.

Analysis Of Challenging The Commissioner’s Discretionary Powers In Auditing Taxpayers under The Constitution Of The Republic of South Africa

2.5 ADEQUATE REASONS

2.5.1 Introduction
If a decision by SARS in terms of ss74A and 74B is ‘administrative action’ as defined Read More

Written by | Posted in Africa • Audit

United States LLCs And Canadian Residents – A Bad Combination!

There is a big problem for Canadian residents who use U.S. LLCs- the Canada Revenue Agency (“CRA”) considers them to be corporations, even if they are considered disregarded entities (if only one shareholder) or partnerships (with two or more shareholders) for US tax purposes.

Furthermore, the CRA does not consider the LLC itself to be a resident of the US for the purposes of the Canada-U.S. Income Tax Convention (“the Treaty), since the LLC is not liable to tax (assuming it has not elected to be treated as a corporation under the US “check the box rules”).

In fact, in many cases, US LLCs that are controlled by Canadians will be considered Read More

Written by | Posted in Income Tax • International

Crimes Under The IRC — Part 1 of 2 – Failure To File, Supply Information or Pay Tax

Underpinning the vast power of the IRS to collect our tax money is the Internal Revenue Code (26 U.S.C), hereafter referred to as the IRC. Subtitle F, Chapter 75, Subchapter A, of the IRC lists the crimes and punishments for anyone convicted of violating our tax law.

The most common violations of the IRC are crimes of omission. The following is a brief discussion of Section 7203, Failure to File, Supply Information or Pay Tax.

Generally, there are four separate offenses described here:

1. Failure to pay the tax — The person is required by law to pay a tax at a time required by law and willfully failed to pay the tax. Willfulness simply means an intentional, voluntary violation of a known legal duty. Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Congress Moves to Restrict Corporate Tax Inversions

On Tuesday, May 20th the Democrats in the House and Senate introduced legislation to tighten the restrictions on corporate tax inversions, limiting the ability of U.S.-based companies to avoid U.S. taxes by combining with a smaller foreign business and moving their tax domicile overseas. As a background, there have been dozens of corporate inversions in the last decade alone, costing the U.S. tax base billions of dollars, according to the bill’s proponents. The Treasury Department estimates that the President’s FY 2015 budget proposal set forth this past March on inversions would raise $17 billion in revenue over the next decade.

Under current law, a corporate inversion is not recognized for U.S. tax purposes if 80% or more of the new combined corporation incorporated offshore is owned by historic Read More

Written by | Posted in Corporate • Treasury Regulations
« Older Entries   Recent Entries »