Tag Archive for expatriate

IRS Targets Americans Living In Israel!

According to Jewish Daily Forward, this upcoming tax season could entail some unpleasant surprises for United States citizens who either live in Israel or who hold bank accounts there.

Filing requirements for these Americans have become more rigorous and the odds of being audited by the Internal Revenue Service are higher than they’ve ever been. In fact, tax accountants working in Israel estimate that almost every American expatriate living in Israel and filing for a child tax credit in their annual return can expect an audit.

“I’ve seen more audits in the past year or two than I’ve seen in the previous 30 years combined,” said Philip Stein, an American CPA working in Israel. “It created a difficult atmosphere both for honest tax preparers and for honest families filing their returns.” Read More

Written by | Posted in Europe, Middle East • Expatriate • IRS

Top 5 2013 US Expat Tax Updates for Americans Living Abroad

The tax season is upon us and as expats begin the arduous task of gathering documents for their US tax preparation, it seems like a good time to provide an overview of the 2013 tax changes that may impact expats. The most important impact may be saving money, so let’s take a closer look!

1)     The Foreign Earned Income Exclusion (FEIE)

We love that the Foreign Earned Income Exclusion adjusts for inflation each year! Last year the FEIE was $95,100 and this year it jumps to $97,600. This means you deduct the first $97,600 you earn—you could eliminate your entire US tax liability with this credit alone. However, it’s important to remember that you must ‘qualify’ as an expat to be Read More

Written by | Posted in Affordable Healthcare Act • Expatriate • FATCA • FBAR

Israel/South Africa Expatriates Face Costly New Tax Rules

In terms of the Right of Aliyah doctrine (the right of every Jew to immigrate to Israel) every Jew going to or intending to go to Israel will be granted an Oleh’s visa. Oleh, for my colleagues not dealing with Israeli law (plural: olim) means a Jew immigrating into Israel. The Oleh Visa is granted by mere expression of the interest to “relocate” to Israel as a qualifying Jew (albeit born outside Israel after 1950).

A person shall not be registered as a Jew by ethnic affiliation or religion and will be denied Oleh Visa, despite being a Jew as defend, inter alia because of political status / activity (i.e. is engaged in an activity directed against the Jewish people or which is likely to endanger public health or the security of the state of Israel) or secondly, where a notification (issued under the Law of Return 5710-1950 as amended by Law of Return Read More

Written by | Posted in Africa • Europe, Middle East • Expatriate • Gift Tax • Individual • International • OECD • Specialty Tax Incentives • Tax Controversy • Tax Fraud/Evasion/Crimes • Tax Policy • Tax Provision/Tax Reporting

Expatriate Year End Tax Planning

Year-end tax planning could be especially productive this year because timely action could nail down a host of tax breaks that won’t be around next year unless Congress acts to extend them, which, at the present time, looks doubtful. These include, for individuals: the option to deduct state and local sales and use taxes instead of state and local income taxes; the above-the-line deduction for qualified higher education expenses; and tax-free distributions by those age 70-1/2 or older from IRAs for charitable purposes.

Some areas to draw your attention are listed below:

NEW HIGH INCOME SURCHARGES

High-income-earners have other factors to keep in mind when mapping out year-end plans. Read More

Written by | Posted in Affordable Healthcare Act • Expatriate • FBAR • Federal • Individual • International • OVDP • Treasury Regulations

Year End Tax Planning: US Expats Making Charitable Contributions

Many Americans living and working overseas are involved in charitable causes. The question often arises whether US expats living abroad can obtain the tax benefit for a charitable contribution deduction? The answer depends on various factors, including those discussed below.

Where is the Charity Organized or Created?

The mere fact that a United States taxpayer is living abroad will not prevent the taking of a charitable deduction on the tax return. The more critical consideration involves where the charity is created to which he is making the contribution. Under the US tax laws governing charitable deductions, the organization must be “created or organized in the United States or Read More

Written by | Posted in Expatriate

US Tax Laws Pushing Americans to Expatriate; OVDI “Arbitrary and Capricious” – An Interview With Bill Yates – Former Attorney, Office of Associate Chief Counsel (International), IRS

TaxConnections Picture - AgentToday’s blog post is a continuation of the interview that provides valuable insight from Willard (Bill) Yates, who recently retired from the Office of Associate Chief Counsel (International), Internal Revenue Service after 31 years of service. During his tenure as a Chief Counsel Attorney, Bill was the recipient of 10 awards, including the Albert Gallatin Award, Treasury’s highest career service award. The Gallatin is awarded only to select federal employees who served twenty or more years in the Department and whose record reflects fidelity to duty. Bill received the Gallatin award for his work throughout his IRS career, including his work on implementation of some of the compliance requirements of the Foreign Account Tax Compliance Act (FATCA).

Most of Bill’s career at IRS focused on offshore compliance, including his participation in a massive overhaul of outdated foreign trust reporting requirements Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts and Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner). Bill was the principal drafter of the regulations under section 679, Foreign trusts having one or more United States beneficiaries, Notice 2003-75, RRSP and RRIF Information Reporting and Notice 2009-85, Guidance for Expatriates Under Section 877A.

Our focus for this series will be on Bill’s comments on the American Citizens Abroad working paper titled, RBT, Residence Based Taxation: A Necessary and Urgent Tax Reform (RBT Proposal), which recently was submitted to the International Tax Reform Working Group of the House Ways and Means Committee.

In general, the RBT Proposal offers an alternative to citizen-based taxation (CBT).

La Torre Jeker: Bill, please give us your general impression of the RBT Proposal. Read More

Written by | Posted in Expatriate • International • IRS • OVDP

FATCA Interview With Bill Yates – Former Attorney, Office Of Associate Chief Counsel (International), IRS – Continued

Question & AnswerThis Post continues the interview with Bill Yates:

Jeker: By the way, where are all of these FBARS kept, anyway?

Yates: Let’s talk about that later, OK?

Jeker: OK. Now go on, please.

Yates: Anyway, we ran into trouble from the start. In general, section 6038D requires any individual who holds an interest in a foreign financial asset or assets which an aggregate value that exceeds $50,000 (or such higher dollar amount as the Secretary may prescribe) to report the interest on a form attached to the individuals tax return for the year for taxable years beginning after or March 18, 2010. We had just been assigned the project. We knew there was no way we were going to have a form ready for anyone who had a short taxable year beginning after March 18, 2010. That was totally unrealistic. So, we had to come up with transition rules for people that had a reporting requirement, but no form to satisfy the reporting requirements. In the end, Form 8938 didn’t get released until November, 2012.

Jeker: Why was it going to take you so long? Read More

Written by | Posted in FATCA • IRS

FATCA Interview With Bill Yates – Former Attorney, Office Of Associate Chief Counsel (International), IRS

iStock_ Floating Money XSmallToday’s blog post is the first of a several-part interview that provides valuable insight from Willard (Bill) Yates, who recently retired from the Office of Associate Chief Counsel (International), Internal Revenue Service after 31 years of service. During his tenure as a Chief Counsel Attorney, Bill was the recipient of 10 awards, including the Albert Gallatin Award, Treasury’s highest career service award. The Gallatin is awarded only to select federal employees who served twenty or more years in the Department and whose record reflects fidelity to duty. Bill received the Gallatin award for his work throughout his IRS career, including his work on implementation of some of the compliance requirements of the Foreign Account Tax Compliance Act (FATCA).

Most of Bill’s career at IRS focused on offshore compliance, including his participation in a massive overhaul of outdated foreign trust reporting requirements Bill was the principal drafter of the regulations under section 679, covering foreign trusts with US beneficiaries, Notice 2003-75, RRSP and RRIF Information Reporting and Notice 2009-85, Guidance for Expatriates Under Section 877A.

Our focus today will be on Bill’s experience as part of the three-person team charged with the responsibility for creating Form 8938 concerning reporting of so-called “specified foreign financial assets”, as well as gleaning his overall opinion about FATCA , from a policy and practical perspective.

Jeker: Bill, one of the most important aspects of your work as an IRS attorney in the Office of Chief Counsel (International) was drafting Treasury Regulations and other forms of guidance that implement tax laws enacted by Congress. Many readers don’t understand much about Treasury Regulations and how they work. Can you explain the force of Treasury Regulations, the particular challenges Chief Counsel attorneys experience and what they go through when drafting these Regulations? Read More

Written by | Posted in FATCA • IRS

Australian Government Seeks to Increase Capital Gains Tax on Expats and Foreigners

In the 2012 Australian Federal Budget, it was announced that the current 50% discount on Capital Gains Tax would be removed for Foreign Individuals.

This will impact the many thousands of Australian expatriates and foreign nationals that own property in Australia and may have a dire consequence on the construction industry if there is a contraction of buyer activity as a result of the higher Capital Gains tax cost.

We have prepared a submission to seek the Government to change its position on this and are asking for your support on this important issue.

If the changes come into effect, they will only apply to gains after the 8th may 2012.  Profits before the date will continue to enjoy the 50% discount on Capital Gains.

For more information connect with me at: Steve Douglas on TaxConnections

Written by | Posted in Australia/Oceania • Expatriate • International • Property Tax
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