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Archive for FATCA

Streamlined Disclosure Program Will Not Continue Indefinitely!

According to a statement made Commissioner Koskinen on  December 17, 2015 at the George Washington University Law conference on international taxation, the streamlined version of the Offshore Voluntary Disclosure Program, designed to bring taxpayers with unreported assets overseas into tax compliance, will end after the IRS determines there is no way a taxpayer who wanted to participate couldn’t have heard about the process.

“At some point, we will have assumed that people have had enough notice that they should have become  voluntarily compliant.” Read more

2016 Form 1099’s are FATCA Compliant

Ronald Marini

 

IRS has issued the final version of 2016 Form 1099’s which contain a checkbox to be used if the form is being used to meet requirements of the Foreign Account Tax Compliance Act (FATCA).

The 2016 Forms Form 1099-B (Proceeds from Broker and Barter Exchange Transactions), 1099-DIV (Dividends and Distributions), 1099-INT (Interest Income), 1099-OID (Original Issue Discount) and 1099-MISC (Miscellaneous Income) each contain a checkbox entitled “FATCA filing requirement” that the form instructions instruct taxpayers to complete if they are using the form to meet the requirements of either of those regs. Read more

FATCA 2015 Roundup: It’s All Serious Business!

TaxConnections Member Manasa Nadig

A lot has been written about the Foreign Account Tax Compliance Act {FATCA} in the past year. As this year comes to a close and I write up this post, I wanted to give you all, my dear readers a synopsis at your finger-tips, a round-up, if you will of some major FATCA events for 2015:

1. FBAR Deadlines Changed:

On July 31, 2015 President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 into law, which modified the due date of several key forms for Americans with foreign income and Americans living abroad. That includes the Report of Foreign Bank and Financial Accounts, or Form 114, colloquially known as the FBAR.

Any U.S. person with a financial interest in, or signatory authority over, foreign financial accounts must file the FBAR, if at any time, the aggregate value of their relevant foreign account or accounts exceeds $10,000. An account over Read more

Streamlined Program Will Expire!

TaxConnections Member Larry Stolberg

The updated Streamlined Program that was revised in June 2014 is a simplified method of allowing delinquent U.S. taxpayers to become tax compliant. If certain conditions are met, tax and information return penalties could be waived. Refer to my article on the website and the IRS site for additional information on the program.

On December 17th at the George Washington University Law conference on international taxation, the Commissioner of the IRS John Koskinen said, “At some point, we will have assumed that people have had enough notice that they should have become voluntarily compliant,” “At that point—after some period of time and you’re not compliant—it will be assumed that logically you are purposely not compliant”. Read more

No Form 1042 Extensions, Higher Penalties And No Refunds – IRS Changes Its Ways!

As readers may recall, in 2013 IRS launched a new foreign payment practices (FPP) division under the LB&I to specifically oversee withholding agents’ compliance activities. The short article is intended to make the withholding agents and other affected taxpayers/ tax professionals aware that FPP has recently begun proposing significantly higher penalties for late filing of Form 1042-S and 1042 by the withholding agents.

Generally, Form 1042 and 1042-S are required to be filed by the withholding agent with regard to the U.S. source income paid to the non-U.S. persons. The forms must be prepared for the calendar year regardless of the withholding agent’s taxable year. These Forms are due on or before March 15th of the following calendar year. They must also be furnished to the payees by the same date.  Read more

Distributions From Canadian RRSPs Are Subject To #Obamacare Surtax While Distributions From US Plans Exempt

Yes, you read right.

By way of background, Obamacare was financed in part by the 3.8% Net Investment Income Tax (“NIIT”). At the risk of oversimplification, this is a tax on passive income. What those Canadians who are also “U.S. persons” need to know includes:

1. The NIIT is an instance of pure double taxation. It is believed by most practitioners that this tax CANNOT be offset by the usual foreign tax credit rules. (But, then again – maybe the NIIT is really a Social Security Tax and therefore NOT payable under the Canada U.S. Social Security Totalization Agreement.) Read more

Part 15 – Understanding “Exit Taxes”

Interview with GordonTLong.com – Citizenship based taxation, PFIC, the S. 877A Exit Tax and #Americansabroad

On May 22, 2015 I was interviewed by Gordon T. Long. There is NO way to discuss U.S. “citizenship taxation” (which is primarily “place of birth taxation”) without discussing the S. 877A Exit Tax rules. During the month of April 2015, I wrote a 14 part series on “How the S.877A rules affect Americans abroad“. The interview with Mr. Long serves as a good reminder (or if you don’t want to read the posts) on:

– what it means to be a “covered expatriate

how the U.S. S. 877A “Exit Tax” rules operate to impose punitive “taxation” on non U.S. pensions (See the actual Read more

Your Field Guide To Foreign Account Disclosure Programs – Which Is Your Pick?

There is a lot of buzz going around these days about FBARs, foreign accounts, foreign corporations, IGAs, tax treaties, more & more Swiss banks on the roll-call list, you name it and they cry “FATCA”! Confusion all-around, fear mongers are having a field day, may be rightfully so, fines are high and penalties higher. People are ready to hit the panic button. Or so one would think!

To quote my favorite Buddhist teacher, Thich Nhat Hanh here, “People have a hard time letting go of their suffering. Out of a fear of the unknown, they prefer suffering that is familiar.”

If you are wondering what a Thich Nhat Hanh quote is doing on a tax blog but you have one hand hovering over the panic button, just think about it…without going into many of Buddhism’s wonderful practices let me assure you, do decide to end your suffering, however first- DON’T PANIC! Second, hire yourself a good Enrolled Agent who Read more

Part 13 – Understanding “Exit Taxes”

“I relinquished U.S. citizenship many years ago. Could I still have U.S. tax citizenship?”

Attn: Former U.S. Citizens: Are you STILL or have you EVER BEEN a U.S. “Tax Citizen”?

Synopsis:

This is a long post. In fact, it is too long for the average reader. Therefore, I wish to summarize the purpose and possible (but not certain conclusion) of the post in a few simple sentences.

Here goes:

If you were born in the United States (and became a U.S. citizen at birth) who moved to Canada and naturalized as a Canadian Citizen prior to June 3, 2004:

1. Without informing the U.S. State Department or applying for a Certificate of Loss of Nationality; and Read more

Part 12 – Understanding “Exit Taxes”

“The two kinds of U.S. citizenship: Citizenship for “immigration and nationality” and citizenship for “taxation” – Are we taxed because we are citizens or are we citizens because we are taxed?”

The United States of America – One country two citizenships – Introducing the “Tax Citizen”.  Dual Citizenship – American style – All Americans are both “Citizens” and “Tax Citizens”. One Country – Two Citizenships.

First Citizenship – Citizenship for Nationality Purposes

Americans have always been proud of their U.S. citizenship. Most U.S. citizens regard their U.S. citizenship as the most valuable thing they have. Most Americans will fight for their citizenship. They will die for their citizenship. They Read more

Tax Delinquents May Have Passports Cancelled – Take 2!

We previously posted on Thursday, May 31, 2012 Tax Delinquents May Have Passports Canceled & Be Questioned at Air & Sea Ports  where we discussed that almost unnoticed, Congress is close to approving a law under which the Internal Revenue Service (IRS) will be able to revoke the passports of Americans who owe substantial unpaid taxes. Nothing has happened until now.

A GAO report found that for the 2008 tax year, the State Department issued passports to more than 224,000 citizens who owed about $6 billion in tax. Most of it was for individual income taxes, and nearly two-thirds was more than three years old.  The biggest Tax Debtor owed $46.6 million and was part-owner of a professional sports team. Another owed nearly $40 million and had traveled to 10 foreign countries in the recent past. The report said that the IRS had filed tax liens against both individuals but large amounts of tax Read more

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