Monthly Archives: May 2014

Nice Overview of all the IRS Issues for EXPATS

““We’ve seen people relinquish their citizenship in the past, so it’s not that these are extremely large numbers,” said Sabates. “What’s startling is that it’s happening at all. It’s not necessarily the expat that moves to Switzerland for a job, gets married, and ends up staying longer than they were thinking. It’s the children of that expat who have acquired citizenship by birth through their parents, and they may have no connections with the United States. They’re finding out that they have these tax-filing requirements at the same time that they’re finding out what being a U.S. citizen means. We’ve seen a lot of family-based citizenship abandonment where you’ve got a couple of kids who have gotten citizenship through their parents. Before they start getting into the working world and developing their wealth, the U.S. tax issues crop up and they’re relinquishing their citizenship.”

IRS vs expats

This article from Accounting Today online. I especially like the quote from Roland Sabates, H&R Block director of expat services who said, “In the last year a lot of the potential clients that are contacting us are terrified.” I can understand this for an freshman expat newly exposed to the myriad of regulations, forms, and filing requirements over and above what the ordinary stateside filer has been exposed to and become accustomed. FBAR, FATCA, ACA, FinCEN, BSA, E-Filing and FIGMO. Just kidding about that last one. If you have a US military background, you know what I mean. If no, I have provided a link to help you understand my feelings about this whole thing. So here’s the article……..

By Michael Cohn
May 27, 2014

Nearly 6 million Americans living abroad are facing a June 16 deadline to file…

View original post 1,504 more words

IRS FBAR OVDP Opt-Out Interview Questions Revealed !

“Decisions regarding opting out should be carefully considered depending upon the taxpayers responses to each of the foregoing questions.”

TAXLITIGATOR - Tax Controversy (Civil & Criminal) Report

For more than a year, numerous taxpayers with previously undisclosed interests in foreign financial accounts and assets have been seeking participation in the current IRS offshore voluntary disclosure program (the OVDP) which began in 2012, modeled after similar programs in 2009 and 2011.

Taxpayers participating in the OVDP generally agree to file amended returns and file FINCEN Form 114 (formerly Form TD 90-22.1, Report of Foreign Bank and Financial Accounts), FBARs, for eight tax years, pay the appropriate taxes and interest together with a 20% accuracy related penalty and an “FBAR-related” penalty (in lieu of all other potentially applicable penalties associated with a foreign financial account or entity) of 27.5% of the highest account value that existed at any time during the prior eight tax years. The OVDP does not have a stated expiration date but can be terminated by the IRS at any time as to specific classes of…

View original post 1,477 more words

Zwerner Answers DoJ Efforts to Collect Multiple 50 Percent Civil FBAR Penalties

“The Internal Revenue Manual suggests that “willfulness may be attributed to a person who has made a conscious effort to avoid learning about the FBAR reporting and recordkeeping requirements.” However, the willfulness determination should be based on the actual facts and the context in which statements are made (or not) rather than assertions in a legal pleading.”

TAXLITIGATOR - Tax Controversy (Civil & Criminal) Report

U.S. taxpayers with previously undisclosed interests in foreign financial accounts and assets continue to analyze and seek advice regarding the most appropriate methods of coming into compliance with their U.S. filing and reporting obligations. Many are pursuing participation in the current IRS offshore voluntary disclosure program (the OVDP which began in 2012), modeled after similar programs in 2009 and 2011. Taxpayers participating in the ongoing 2012 OVDP generally agree to file amended returns and file FBARs for eight tax years, pay the appropriate taxes and interest together with an accuracy related penalty equivalent to 20 percent of any income tax deficiency and an “FBAR-related” penalty (in lieu of all other potentially applicable penalties associated with a foreign financial account or entity) of 27.5 percent of the highest account value that existed at any time during the prior eight tax years.

Under the 2009 OVDP, the FBAR-related penalty was 20 percent…

View original post 3,096 more words

Zwerner: Jury Determines 150% FBAR Penalty Applies – Excessive Fines Clause to the Rescue??

“Mr. Zwerner appears to have come into compliance under the then applicable voluntary disclosure practice set for in the IRS’s Internal Revenue Manual 9.5.11.9, Example 6(A) at a time when there was no formal program regarding the voluntary disclosure of previously undisclosed interests in offshore financial accounts. Unfortunately, IRM 9.5.11.9 only speaks to the voluntary disclosure being a factor considered by the IRS in the determination of a referral for criminal prosecution by the Tax Division of the U.S. Department of Justice. It has no formal impact on any IRS civil penalty determination although, historically, a timely voluntary disclosure has received favorable consideration in the civil penalty arena as well.”

TAXLITIGATOR - Tax Controversy (Civil & Criminal) Report

U.S. taxpayers with previously undisclosed interests in foreign financial accounts and assets continue to analyze and seek advice regarding the most appropriate methods of coming into compliance with their U.S. filing and reporting obligations. Many are pursuing participation in the current IRS offshore voluntary disclosure program (the OVDP which began in 2012), modeled after similar programs in 2009 and 2011.

Taxpayers participating in the ongoing 2012 OVDP generally agree to file amended returns and file FBARs for eight tax years, pay the appropriate taxes and interest together with an accuracy related penalty equivalent to 20 percent of any income tax deficiency and an “FBAR-related” penalty (in lieu of all other potentially applicable penalties associated with a foreign financial account or entity) of 27.5 percent of the highest account value that existed at any time during the prior eight tax years.

QUIET DISCLOSURES. There remain alternatives to the OVDP, including the voluntary…

View original post 1,797 more words

#Americansabroad defend the homeland militarily and diplomatically

Robert Wood, posted a “Memorial Day Article” drawing attention to the renunciations of U.S. citizenship. The very first comment was from a Homelander who is an adherent of the “Don’t let the door hit you on the way out” principle. This particular Homelander writes:

Continue reading

Edward Karr explains US constitutional challenge to #FATCA and renunciations of US citizenshp

 

This is a very interesting discussion of a number of things including:

1. Jim Bopp and Republicans Overseas challenge to the constitutionality of FATCA. Nice outline of the grounds including subjecting Americans abroad to cruel and unusual punishment. FATCA is sure to exacerbate the tensions between Homelanders and Americans abroad.

2. Statement that Americans abroad are being forced to renounce U.S. citizenship.

As I watch this video, I ponder the question:

How can the United States be so stupid?