Find the latest news, information and advice about international tax issues for both individuals and corporations from The Tax Lawyer.
Limitations on the Use of Foreign-Based Documentation in Tax Litigation

Limitations on the Use of Foreign-Based Documentation in Tax Litigation

The Internal Revenue Code places certain limitations on the taxpayer’s ability to present foreign-based documentation during tax litigation. These rules exists so that taxpayers who fail to produce certain items during audit procedures cannot rely upon those unproduced documents at a later date.

Reporting Requirements for Interest in Foreign Corporations

Reporting Requirements for Interest in Foreign Corporations

A U.S. person may have international tax reporting obligations to the IRS if he or she owns more than 10% stock in a foreign corporation. The U.S. persons who might be subject to these special reporting rules include: 1) U.S. citizens or residents who serve as director or officers of the foreign corporation; 2) U.S. citizens or residents who acquire stock in the corporation and immediately have 10% ownership of the company’s stock; 3) a person who becomes a U.S.

Use of John Doe Summons in Foreign Account Cases

Use of John Doe Summons in Foreign Account Cases

Sometimes, the IRS may use a John Doe summons to obtain information about the taxpayer whose international tax liability it is trying to determine. A John Doe summons is used when the IRS believes tax is owed, but does not know the exact identity of the individual who owes the taxes.

IRS Reporting Requirements for Gifts from a Foreign Person

IRS Reporting Requirements for Gifts from a Foreign Person

Certain events, such as when a U.S. taxpayer receives a gift from a foreign person, trigger an international tax filing requirement. This event triggers the requirement to file form 3520. In general, the Form 3520 is merely an informational return, as foreign gifts typically do not result in tax consequences for the taxpayer. However, there are some significant penalties for failing to file a Form 3520 in connection with a foreign gift (1).

Reporting Foreign Financial Assets

Reporting Foreign Financial Assets

Certain international tax reporting requirements apply to individuals who hold “specified foreign financial assets” valued in excess of $50,000. If the aggregate value of all foreign financial assets in which an individual has an “interest” exceeds the statutory amount, then the individual must include a statement about the asset(s) with his or her income tax return (1). For these purposes, a specified foreign financial asset can refer to any stock or bond issued by a person other than a U.S.

Streamlined Procedures for Non-Resident Non-Filers

Streamlined Procedures for Non-Resident Non-Filers

Some U.S. taxpayers living abroad may be unaware of their international tax duty to file U.S. tax returns and FBAR forms. If a taxpayer has failed in this regard, but has recently become aware of his or her obligation to make these filings, the IRS provides a special program to allow these individuals to come into compliance. The program consists of streamlined procedures for non-resident non-filers.

Canada and the U.S. Enter Into an Intergovernmental Agreement Related to FATCA

Canada and the U.S. Enter Into an Intergovernmental Agreement Related to FATCA

On February 5, 2013, Canada and the United States announced that they had signed an intergovernmental agreement (“IGA”) implementing the Foreign Account Tax Compliance Act (“FACTA”), showing additional worldwide support for the United States’ initiative to prevent global tax evasion.

The Special Disclosure Program for Swiss Banks and the Department of Justice

The Special Disclosure Program for Swiss Banks and the Department of Justice

In recent months the number of US Department of Justice prosecutions of US persons with international tax problems involving previously unreported foreign income and assets has risen sharply. This is in large part due to numerous FATCA agreements with countries that historically acted as safe havens for hiding income and assets from the US governments. However, in August 2013, the U.S.

What are the requirements of the Offshore Voluntary Disclosure Program

What are the requirements of the Offshore Voluntary Disclosure Program?

In order to properly and completely qualify for the Offshore Voluntary Disclosure Program, you must take certain steps and provide specific information to the IRS. It is critical to realize that the disclosure of this information is already mandatory according to US law, and a failure to do so can result in severe financial penalties and criminal prosecution if the IRS learns about undisclosed income and assets through their own means.

Offshore Voluntary Disclosure Program

Offshore Voluntary Disclosure Program

If you have foreign bank accounts that you have never properly disclosed to the IRS, you should know that if the IRS learns about the unreported accounts the penalty is equal to 50% of the highest account balance for each year that the account went unreported. That means that any more than two years of failing to report the account will earn you penalties in excess of the total amount that ever existed in the account, as well as criminal prosecution for federal tax crimes, which means jail time.

Pages


Contact An International Tax Attorney
Subscribe to RSS - International Tax News