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

Depending on whether you are a U.S. Citizen or Resident, you have various reporting and disclosure requirements to the IRS on your U.S. source and worldwide income. In this article we will take a look at a few of the most common and most important international tax reporting requirements.

Disclosure of Foreign Bank Accounts

If you have a financial interest or signatory power over a foreign financial account, then you are required to file a Report of Foreign Bank Account and Financial Accounts (FBAR), also known as FinCEN Form 114. This reporting obligation applies to bank accounts, brokerage accounts, mutual funds, trusts, or other financial accounts. American Citizens Abroad, What is FBAR?. Read More

If you meet the conditions of the substantial presence test, you are considered to be a U.S. resident for U.S. International tax purposes.  If you qualify as a U.S. resident under the substantial presence test, you may be able to have your nonresident spouse treated as a U.S. resident for tax purposes even if your spouse does not qualify under the substantial presence test.

What are the Benefits of Treating a Nonresident Spouse as a Resident?

If you elect to treat your nonresident spouse as a resident for U.S. taxation purposes, in the year that you make that election, both you and your nonresident spouse will be taxed on your worldwide income.  IRS – Nonresident Spouse Treated as a Resident.  In Read More