Expatriate Guide To Required Forms

Expatriate Guide To Required Forms

Generally, if you are a United States citizen or permanent resident (green card holder) living outside the United States for more than one year, you are called an expatriate or “expat.”* Rather than adding to the long list of tax guides that explain the general concepts of expat taxation,** we will focus on the specific requirements to file several US international tax forms. These are forms not well known, but they carry huge penalties for excluding or screwing up.

We will give you a general understanding of the following US tax forms: 1) Treasury Form 114, Report of Foreign Bank and Financial Accounts (FBAR), 2) Form 3520/substitute 3520-A, Annual Return To Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts, 3) Form 5471, Information Return of US Persons With Respect To Certain Foreign Corporations, 4) Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, 5) Form 8858, Information Return of US Persons With Respect To Foreign Disregarded Entities, 6) Form 8865, Return of US Persons With Respect to Certain Foreign Partnerships, 7) Form 8938, Statement of Specified Foreign Financial Assets, and 8) Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI). We then discuss ways to comply if you haven’t filed through the Streamlined Filing Compliance Procedures, the Delinquent FBAR Submission Procedures and the Delinquent International Information Return Submission Procedures.

The requirements to file these forms can apply to all US citizens and permanent residents, regardless of where they live, but the vast majority of those affected are expats. We will describe in plain language the requirements to file, and go over the ridiculously large penalties that the IRS has been given the power to impose for noncompliance. Fortunately, the IRS has programs in place that allow for waiver of these penalties, and we have been successful in helping dozens of our clients become fully compliant, penalty free. These programs are discussed under Delinquent Filing Procedures.

* This is the popular rather than the technical meaning of this term. The term “expatriate” is defined in the Internal Revenue Code as “any United States citizen who relinquishes his citizenship, and any long-term resident of the United States who ceases to be a lawful permanent resident of the United States (within the meaning of section 7701(b)(6)”. IRC Section 877A(g)(2). Tax consequences of expatriation are determined under IRC Section 877A.
** Here’s a very thorough guide published by the IRS for that purpose: Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad.

Have a question? Contact Gary Carter.

Gary Carter, President of GW Carter, Ltd., was a tax professor at the University of Minnesota’s Carlson School of Management and the Associate Director of the Carlson School’s Master of Business Taxation Program until June, 2010. He received a B.A. in accounting from Eastern Washington University in 1977, a Master of Taxation degree from the University of Denver in 1980, and a Ph.D. in taxation from the University of Texas at Austin in 1985. Early in his career he worked as a revenue agent for the State of Alaska, and later in public accounting for both a regional CPA firm and a Big Four Firm. His current practice was started in 1999. He has conducted tax seminars on various tax topics and has published several books on taxation.

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