FINCEN114 due June 30th for the 2015 taxation year, reporting beneficial interest or signature authority in non-U.S. financial accounts where the annual aggregate highest balance is greater than $10K U.S., may have to be filed by Canadian taxpayers.
Those who meet the substantial presence test for residency in the U.S., regardless of a claim under Article IV of the Canada/U.S. tax Read More
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
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
Some events are so seminal that they need no explanation. When someone says “Holocaust” or “9/11” or “Hindenburg,” no further explanation is needed. Some sports stars share similar fame. There is only one Michael, one LeBron, and one Wilt. While he admittedly does not rise to that level – some scouts shake their heads and say his left-handed layup needs work – James Moore’s rather commonplace name may someday reach that upper echelon.
A few months ago, I posted on the curious case of Moore v. United States. That article has an exhaustive discussion of the facts and also of FBAR. In a nutshell, Mr. Moore did not file an FBAR for 2003-2008; he filed late in 2009. The IRS conducted an investigation and sent Mr. Moore a memo in 2011 which curtly informed him that, after due Read More
Updated September 12, 2015 – the IRS has issued “proposed rules” governing the issue of “The sins of the father”.
The following was a comment on Part 9 of this “Exit Tax” series.
“I know many tax compliant, patriotic Americans who have renounced. Many have done so seeing the $2m threshold approaching, to protect their families and get on with their lives. All with heavy hearts.
You did not mention the additional burden on those who renounce who have US citizen relatives–the tax their Read More
I have to say today’s blog post was triggered by a phone call a few weeks ago. The would-be client wanted to report his foreign bank accounts. Apparently, this good citizen had all his I’s dotted & T’s crossed – so to speak – so what was the problem you ask? I hate to say this, but it happens more than you would think. He did not know there were additional reporting requirements involved when it came to bank accounts in foreign financial institutions. (More on FBAR thresholds in my post here)
You have to know that the IRS will not impose a penalty for the failure to file the delinquent FBARs if you “properly” reported the foreign bank accounts on your US tax returns, and paid tax on the income from these accounts and have not been contacted by the IRS for an income tax examination or a request for the delinquent returns has not been made by them. Read More
Introduction – The Canada U.S. Tax Treaty Does Not Always Prevent Double Taxation
When countries independently make major changes in tax law, double taxation can occur.
The following comment from 5thSwiss on the Isaac Brock Society site explains why and how double taxation can be a reality. It also underscores the dangers of a U.S. citizen leaving the United States. Read More
The SURFACE TRANSPORTATION ACT OF 2015 became law in late July, 2015. The tax provisions changed a number of due dates effective for tax years beginning after December 31, 2015 for partnerships, C corporations and S corporations. Surprisingly, was a change for FBARS or FINCEN114 that will now align commencing for the 2016 taxation year the FBAR (Report of Foreign Bank and Financial Accounts) due date with the due date for individual returns, moving it from June 30 to April 15. The bill instructs the IRS to modify existing regulations to reflect the changes to tax return filing deadlines.
This will mean that for 2016 tax return filers the FBAR will be due April 15, 2017 which is the normal due date for U.S. persons residing in the U.S. on April 15th. It appears that alignment will also mean that the automatic extension to June 15 for those residing outside of the U.S. will be accepted as not late, but more importantly, it Read More
We know that increasing globalization keeps us, Enrolled Agents, on our toes especially when we have to consider advising families, businesses and real property owners who have ties with the US and other countries as well. Thanks to my many clients who have business interests in other countries or still have ties/ families back in the countries they migrated from, I deal with cross-border issues quite often.
Interestingly, this summer we did a work-up for a client who had surrendered their green-card & left the country but due to their length of stay in the country, they could be considered “covered-expatriates”, the clients wanted to set up inheritances for their grand-children who are US citizens. Read More
Although this series originally began on “April Fools Day”, I assure that this is NOT a joke.
This post will demonstrate how the U.S. “Exit Tax” affects “middle class Canadians who have U.S. citizenship and wish to relinquish it. You will see how the “Exit Tax” imposes punitive taxes on Canadian assets and on income earned in Canada. You will also see how some U.S. assets are (in effect) exempted from the “Exit Tax”. We will learn from the example of a “Middle Class Canadian” with an average house in Toronto, a pension plan from the University of Toronto and a low value RRSP who decides that he no longer wishes to be a U.S. citizen.
This person has lived in Canada most (or perhaps all) of his adult life. You will see that he has NO U.S. assets and Read More
When in Rome, live as a Homelander” does, when elsewhere, live as they live elsewhere.
Americans abroad are constantly told that they should “come clean”. They should file their U.S. taxes. This assumes that they are somehow “unclean” or perhaps “dirty”. The life of an “American abroad” is about three things:
1. “Thinking Clean” – The importance of “thinking clean” while living abroad. Read More
Introducing Tax Expert and TaxConnections Internet Tax Summit Presenter: John Richardson, Citizenship Solutions, Toronto, Canada
Are you a “Covered Expatriate”? Learn about this term and so much more regarding FATCA, FBAR and Exit Taxes from John Richardson on September 21st. See his short introductory video below and get your free VIP Ticket to the Internet Tax Summit. Read More
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