Patel Law Offices Blog

Now may be the time to consider a Spousal Lifetime Access Trust (SLAT)

With the upcoming election and potential tax law modifications based on the outcome, high net worth married couples should consider meeting with their advisors to determine what they can do to prepare for potential tax changes. One strategy worth consideration is

FBAR Deadline Slightly Extended

After a misworded posting caused confusion about the 2020 deadline to file FBARs (i.e., FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)), Treasury’s Financial Crimes Enforcement Network (FinCEN) has extended the deadline to Oct. 31. Last Wednesday,

IRS Warning Letter Warns Foreign Business Owners About Section 965 Transition Tax Enforcement

The IRS has recently begun sending “soft letters” (warning letters) to U.S. taxpayers owning foreign companies about IRC Section 965 transition tax compliance. In July 2020, The IRS Large Business & International (LB&I) division expanded its list of compliance campaigns

To Gift or Not to Gift? Gift.

For individuals and families who wish to pass assets to children, grandchildren, and more descendants as part of their overall estate plan, gifting now, rather than later, could provide significant tax benefits.  We are advising clients of the likely impact

The FinCEN Files Leak

The FinCEN Files are leaked documents from the US Financial Crimes Enforcement Network (FinCEN), that have been globally earlier published this week. FinCEN is an agency US Treasury that collects and analyses forms to combat money laundering, terrorism financing, evasion

Caution: Increased FBAR Enforcement

The last month or so has unfortunately seen a lot of FBAR enforcement court rulings against US taxpayers and in favor of the government. The Financial Crimes Enforcement Network (FinCEN) of the Department of the Treasury can levy high penalties

Post-Covid: Re-explore the Home Office deduction

In a recent notice last week, the Internal Revenue Service reminded individuals to consider taking the home office deduction if they qualify. The benefit may allow taxpayers newly working from home to deduct certain expenses on their tax return. In

Tax Changes Due to the Election

Many Tax Changes Expected At the time of this writing, the political conventions are over, and Joe Biden has a double-digit lead in some polls. A number of Senate seats may turn blue as well, and this could give the

FBARs from Wuhan

The US Department of Justice recently announced the indictment for tax-related crimes of Dr. Charles Lieber, the former Chair of Harvard University’s Chemistry Department, for monies received from a university in Wuhan, China. Key excerpts from the announcement are: Dr. Charles

Foreign Retirement Plans: New IRS Exemption from Required Information Reporting on Forms 3520 and 3520-A

In recent IRS Revenue Procedure 2020-17, the IRS has created a procedure where certain U.S. persons having an interest in tax-favored foreign trusts established and operated exclusively or almost exclusively to provide pension or retirement, medical, disability, or educational benefits

New Court Ruling: FBAR penalties applied per form and not per account

The FBAR rules require the filing of a FinCEN Report 114, Report of Foreign Bank and Financial Accounts (FBAR) to report for accounts of U.S. persons aggregating $10,000 or more. For a non-willful failure to disclose, the maximum penalty imposed

How to Avoid Jail and Clean Up Tax Problems

If you have willfully failed to report income or claimed excessive deductions or failed to file your tax returns and pay the tax owed, you may be liable for civil penalties and possible jail time for criminal tax evasion. Few

The IRS has woken up.

Due to the coronavirus, the IRS paused all collection and enforcement activities until July 15, 2020. But recently we have started to receive some tax enforcement actions against some of our clients. The IRS has woken up and is getting

How to Fix an Erroneous Filed Tax Return without Penalties

But what if you discover an error or omission on a return already filed with the IRS that needs to be corrected and it is still before the extended due date? The advantage of fixing the return now, before the

IRS’ New “Dirty Dozen” list of tax scams

The Internal Revenue Service announced on July 16, 2020, its annual “Dirty Dozen” list of tax scams. This year, the Dirty Dozen focused on scams that target taxpayers, and emphasized aggressive and evolving schemes related to coronavirus tax relief, including

What Happens to Your Digital Accounts In Case of Death

We have completed over 1,000 estate plans for clients over the years. Recently, however, we have unfortunately probated a disproportionate number of clients’ wills after death. Through estate planning, many of our clients have planned well for their families in

Expect Coronavirus Bankruptcies

With the downturn in the economy and massive job losses, bankruptcy filings will skyrocket this year. Unpaid tax liabilities will likely be a large part of clients’ debts. There is a common misconception that income taxes are never dischargeable in

No Springing in Spring

You may have heard of a “springing” powers of attorney (POA), which is a POA that “springs” into effect when you become incapacitated. This type of POA literally “springs” to life when it’s needed. Many people like the idea of

After You Wash Your Hands Take Back Control

In recent weeks, our office has received calls from people we have not heard from in 15 years. People are worried. One recent call was from a relatively healthy 83-year-old longtime client, who said he wanted to make sure his

Allow Us To Prepare Your Estate Planning Documents Remotely

In these uncertain times, you should have, at a very minimum, the four following documents in place: Power of Attorney: This document allows you to appoint an agent to handle your assets and to make financial decisions on your behalf.

Tax-free Disaster Relief Payment Program

In response to the ongoing pandemic, on March 13, 2020, President Trump declared the coronavirus or COVID-19 as a national disaster. This declaration activates a little-known existing provision of the tax law: Section 139 of the Internal Revenue Code. Section 139 allows

Required Minimum Distributions Suspended For Retirement Plans and IRAs For 2020

The bipartisan COVID-19 stimulus bill just signed by President Trump includes welcome tax relief for retirees: The required minimum distribution rules for Individual Retirement Accounts and 401(k)s are waived for 2020. That means that instead of taking money out this year, retirees

Quarantine Tips for Tax Savings

There have been many important favorable legal and tax changes over the past 2 weeks. The new laws are the most expensive (the government) tax laws ever passed by the government. In these trying times, we have compiled our top

Changes to Legal Documents in light of the Coronavirus pandemic

In light of the Coronavirus pandemic, all clients should immediately review their healthcare-related documents including living will, healthcare proxy, and HIPAA release.   Most client advisors are familiar with the need to have a current document that reflects the client’s

US FATCA Enforcement Softens due to Coronavirus

The Internal Revenue Service is giving foreign banks and financial institutions more time to file their forms about U.S. taxpayers with overseas bank accounts and other holdings in compliance with the Foreign Account Tax Compliance Act, or FATCA, because of

Planning in the Time of Coronavirus

The coronavirus is an illness that we cannot ignore. Older adults are especially vulnerable and those who have an underlying issue such as diabetes, heart disease, and respiratory conditions. Many such individuals are in a position of responsibility and wealth.

IRS Reduces Administrative Burden (for the first time) of Filing Some Forms 3520 and/or Forms 3520-A

A Revenue Procedure just released by the U.S. Internal Revenue Service (IRS) provides U.S. persons an exemption from the information reporting requirements for certain tax-favored foreign retirement and non-retirement savings trusts. Taxpayers who would otherwise be required to file Form

Planning for Dependent (or not Independent) Family Members

One in four Americans has some form of disability. In our law firm’s client base, it is very common to have a family member that is not entirely able to live independently. Even worse, adults with disabilities are living far

The IRS is Assessing Form 3520 Foreign Information Reporting Penalties

The IRS is aggressively sending out IRS Notice CP15 “Notice of Penalty Charge” for the late filing of Form 3520 to report the receipt of a foreign gift or foreign inheritance. The Notice states that a civil penalty has been

 2020 New Year’s Tax Planning Resolutions: Resolve To Plan Better

While we all resolve to go to the gym every day and lose weight, we have compiled a list of 2020 New Year’s tax planning resolutions. Beware of 2020 election-year tax uncertainties. It is important to review tax plans and