Patel Law Offices Blog

Penalty relief for International Information Forms 5471, 5472, and 8865

US tax law imposes large penalties for the failure to timely file international information returns on Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations; Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign

A Lesson From Brown v. U.S.: A Defective Tax Refund Filing

The recent case from the U.S. Court of Appeals for the Federal Circuit in Brown v. the U.S. shows the detriments to Taxpayers who do not properly file their returns with the IRS in order to receive their tax refunds. 

The Strange Case of U.S. v. Hughes: Willful and Non-Willful (at the Same Time?)

A recent decision from the District Court of Northern California has created more questions in the tax community about FBAR penalties. Usually, in challenging FBAR penalties, courts conclude that the US taxpayer will pay willful FBAR penalties, non-willful FBAR penalties,

How to Avoid Criminal Prosecution Through Voluntary Disclosure

The Voluntary Disclosure Practice is an IRS-created option of the IRS Criminal Investigations for U.S. Taxpayers at risk for criminal prosecution due to a tax-related offense. Taxpayers who have willfully failed to submit tax information reports may willingly submit a

All the Many FBAR Late Filing Procedures

The FBAR or Foreign Bank and Financial Account Reporting or FinCen Form 114 is a form which many U.S. taxpayers are unaware and unfamiliar with and thus many of them become noncompliant and delinquent. However there are a number of

A Lesson to be Learned from US v. Schwarzbaum: Bring Back the Foreign Funds to Pay FBAR Penalties

The recent case of U.S. v. Schwarzbaum shows U.S. taxpayers the length the United States will go to require a U.S. person to pay FBAR penalties, to the point of requiring the taxpayer repatriate money located outside the United States

Beware IRS Letter 6291

Many of our clients have recently received IRS Letter 6291, which begins with Why We’re Contacting You: “Our records for the tax years above show you did not properly report the foreign financial accounts on form 8938 statement of specified

Do You Have to Pay US Taxes on Foreign Inheritance?

We get this question almost daily…A U.S. person owes no U.S income tax on the receipt of an inheritance or gift from an individual living outside the United States. However, there are important legal considerations to review, including the Foreign

Beware of Currency Seizures

In the past two decades, the US Department of Homeland Security (DHS) seized over $2 billion in currency at airports mostly due to travelers’ failure to fill out the relevant form. There is no limit to how much currency or

Our Best Net Investment Income Tax (NIIT) Tax Minimization Planning Strategies

The NIIT is a 3.8 percent Medicare surtax imposed on the lesser of an individual’s (a) net investment income (NII), or (b) the amount of modified adjusted gross income (MAGI) that exceeds $250,000 for MFJ (married filing jointly) or $200,000

Watered-Down Build Back Better (BBB) For High-Income Taxpayers

After months of negotiations, the Democratic-led House of Representatives advanced the Build Back Better (BBB) Act to the Senate. The table below shows how the tax provisions have evolved since September. Many of the most controversial tax increase provisions were

Charitable Planning Strategies High-Net-Worth Individuals Need to Know for Year-End Tax Planning

This year has a few charitable tax law changes unique to 2021. We have compiled our top charitable tax planning ideas you may want to consider implementing this year before December 31st. 1.         Take advantage of the higher limit this

IRS Provides Form 5471 Information-Filing Relief For Dormant Foreign Corps.

Every foreign corporation in which a U.S. person is generally involved in any capacity with at least 10% interest must be reported to the IRS on Form 5471. This is the way for the IRS to prevent the disguised accumulation

IRS Updates Process for FAQs

IRS finally figured out that taxpayers need help with IRS frequently asked questions (FAQs). IRS places FAQs on its website and taxpayers naturally read them and believe them to be true and reliable. IRS has issued more than 1,100 FAQs

New Tax Changes are Blowing in the Wind

There are several tax proposals that are under Congressional consideration, and the Biden administration released information concerning his proposal, the “American Families Plan.” The U.S. House Ways and Means Committee released proposed budget reconciliation legislation on September 13, 2021. The

FBAR Deadline Extended to December 31, 2021

The Financial Crimes Enforcement Network (FinCEN) today issued a notice extending the filing date of Reports of Foreign Bank and Financial Account (FBARs) for victims of recent natural disasters, including Hurricane Ida, the California Wildfires, and Tropical Storm Fred.  Victims

Pandora’s Box Has Opened: Pandora Papers

An unprecedented leak of financial records known as the Pandora Papers has revealed the offshore financial assets of dozens of current and former world leaders and hundreds of politicians from Asia and the Middle East to Latin America. The International Consortium of Investigative

New Comments on the IRS Voluntary Disclosure Program

We are members of the American Bar Association Section of Taxation, which on September 28, 2021 submitted comments to the IRS on the IRS Voluntary Disclosure Program (“VDP”), the Streamlined Domestic Offshore Program (“SDOP”), and the Streamlined Foreign Offshore Program (“SFOP”). In the

An Ill-advised IRS Streamlined Filing Compliance Procedure Filing

Yesterday the US Department of Justice announced here the indictment of Mark Anthony Gyetvay, who filed to enter IRS “Streamlined Filing Compliance Procedures in which he attested that his prior failure to file FBARs and tax returns was non-willful.” Apparently, his Streamlined

Parag Patel Esq. speaks at New Jersey Society of Certified Public Accountants (NJCPA) Webinar “What Tax Professionals Should Know About Trusts and Estates: Estate Tax Reform and the 2021 Planning Window”.

Parag Patel Esq. will be a featured speaker at a virtual New Jersey Society of Certified Public Accountants (NJCPA) Webinar panel entitled “What Tax Professionals Should Know About Trusts and Estates: Estate Tax Reform and the 2021 Planning Window”. Mr.

Upcoming live video webinar: U.S.-India Tax Planning: Reporting Issues, Traps to Avoid, Tax Treaties, FTC, FACTA/FBAR Reporting, Passive Income

I am pleased to announce that I will be speaking in an upcoming Strafford live video webinar, “U.S.-India Tax Planning: Reporting Issues, Traps to Avoid, Tax Treaties, FTC, FACTA/FBAR Reporting, Passive Income” scheduled for Thursday, October 21, 1:00pm-2:30pm EDT. Our panel will provide

The IRS Needs Help

The IRS is a malfunctioning mess.  A recent report from the National Taxpayer Advocate, states that the IRS has failed to answer taxpayers’ requests for assistance. I have been a tax lawyer for decades and have seen many different IRS problems over

Parag Patel Esq. presents new tax law changes at Broward Chapter of The Florida Society of Enrolled Agents (FSEABC) Webinar

Parag Patel Esq. will be the main speaker at a virtual Broward Chapter of The Florida Society of Enrolled Agents (FSEABC) Webinar panel entitled “Upcoming federal tax law changes: What to Expect”. Mr. Patel will discuss the new tax changes

New IRS procedures for Streamlined Filing Compliance Procedures for 2017 transition tax filers

The IRS quietly created new procedures for Streamlined Filing Compliance Procedures earlier this month relating to filings with “transition tax” due under Internal Revenue Code Section 965. The new procedures apply to Streamlined Domestic Offshore submissions and Streamlined Foreign Offshore

Unfiled FBAR Penalties Survive Death

Do FBAR penalties survive death? According to a new court ruling, the answer is clearly yes (unfortunately). In United States v. Gill, 2021 U.S. Dist. LEXIS 12203 (S.D. Tex. 6/30/21), the court ultimately held that an FBAR nonwillful penalty survives

FBAR Deadline Automatic Extension

All U.S. citizens and permanent residents are required to annually file a U.S. income tax return reporting their worldwide income from all sources. Additionally, U.S. citizens and permanent who have an interest in or signatory authority over foreign bank and

Solution: Streamlined Domestic Offshore Procedures

In the midst of tough tax season, many U.S taxpayers are unfortunately surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their tax and reporting obligation, there are

Dormant foreign corporations not subject to complicated Form 5471 filing requirements

The reporting requirements for IRS Form 5471 are complex, including ‘category of filer’ and required schedules.  However, very few taxpayers know that there are special simplified filing rules for a foreign dormant corporation. Although not widely published, IRS Revenue Procedure

Happy Birthday Streamlined Filing Compliance Procedure

The Streamlined Filing Compliance Procedure (SFCP) was “born” six years ago.  Six years ago the IRS publicly announced the SFCP, which has been used by many non-compliant US taxpayers with the disclosure of foreign assets. SFCP has two sub-programs: one

What is a SLAT?

While a slat is commonly known as a thin, narrow strip or bar of wood or metal, a SLAT is also known to estate planning professionals as a Spousal Lifetime Access Trust (SLAT). With the current lifetime estate and gift