Comparison of Form 8938 and FBAR Requirements

- By : P. Patel

The new Form 8938 filing requirement does not replace or otherwise affect a taxpayer’s obligation to file FinCEN  Form 114 (Report of Foreign Bank and Financial Accounts). Individuals must file each form for which they meet the relevant reporting threshold.      Form 8938, Statement of Specified Foreign Financial Assets FinCEN Form 114, Report of

Difference between Form 8938 and FBAR Requirements

- By : P. Patel

Comparison of Form 8938 and FBAR Requirements     Many holders of foreign financial assets must file two disclosure forms this year or else risk draconian penalties. They are Form 8938, which is due with the tax return itself, and the Foreign Bank Account report (FBAR), which is due by June 30 to the U.S. Treasury

IRS attempts to demystify its new Form 8938

- By : P. Patel

The IRS has finally attempted to demystify its new Form 8938. Below are some Form 8938 FAQs: Basic Questions and Answers on Form 8938       1. What are the specified foreign financial assets that I need to report on Form 8938? If you are required to file Form 8938, you must report your

More Tax Complexity: New Form 8938

- By : P. Patel

In recent years, the IRS and US Treasury have stepped up their efforts toward tracking down delinquent tax payers and enforcing payment of overdue taxes. One of these initiatives has been labeled the “Foreign Account Tax Compliance Act”. FATCA is part of the Hiring Incentives to Restore Employment (HIRE) Act, which was designed to enforce

Form 8938, FATCA, FBAR and penalties for all (including bankers)

- By : P. Patel

The IRS and US Treasury have stepped up their efforts toward tracking down delinquent tax payers and enforcing payment of overdue taxes. One of these initiatives is the “Foreign Account Tax Compliance Act”. FATCA is part of the Hiring Incentives to Restore Employment (HIRE) Act, which was designed to enforce higher tax compliance among U.S.

New IRS Form 8938 Statement of Foreign Financial Assets is causing significant confusion

- By : P. Patel

As anticipated, IRS Form 8938 Statement of Foreign Financial Assets is causing significant confusion among taxpayers attempting to complete these Forms for filing. Form 8938, Statement of Specified Foreign Financial Assets, is a new reporting form, which will be used to report certain foreign financial assets as required as part of the Hiring Incentives to Restore

IRS Form 8938 and the Offshore Voluntary Disclosure Program (OVDP)

- By : P. Patel

The announcement by the IRS of the opening of the new Offshore Voluntary Disclosure Program (OVDP) on January 9, 2012 came as a surprise to most tax practitioners, especially since the 2011 OVDI just ended on September 9, 2011. However, if one analyzes the number of new developments in international tax compliance over the past

Beware: IRS Form 8938 Statement of Specified Foreign Financial Assets

- By : P. Patel

Form 8938, Statement of Specified Foreign Financial Assets, is a new reporting form. Form 8938 will be used to report certain foreign financial assets as required as part of the Hiring Incentives to Restore Employment Act (HIRE Act), which was signed into law in 2010 by President Obama. Form 8938 is effective for 2011 and

New Post-OVDP IRS Voluntary Disclosure Procedures Announced

- By : P. Patel

The Internal Revenue Service released new updated procedures for voluntary disclosures since the old Offshore Voluntary Disclosure Program (OVDP) closed on September 28, 2018. Last week, IRS deputy commissioner Kirsten Wielobob issued Interim Guidance Memo LB&I-09-1118-014, Updated Voluntary Disclosure Practice (PDF) on November 20, 2018 to supplement procedures regarding the voluntary disclosure practice. The updated procedures apply

2018 ABA COMMENTS ON THE OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : P. Patel

We are members of the American Bar Association Section of Taxation, which on May 2, 2018 submitted comments to the IRS on the IRS Offshore Voluntary Disclosure Program (“OVDP”), the Streamlined Domestic Offshore Program (“SDOP”), and the Streamlined Foreign Offshore Program (“SFOP”). We co-authored the ABA comments. The comments are very constructive. It is hoped that the

IRS reminds those with foreign assets about U.S. tax obligations

- By : P. Patel

The IRS again reminded taxpayers yesterday about their reporting obligations for foreign assets and income. The reminder again represents the IRS’ targeted enforcement of tax laws for reporting obligations for foreign assets and income. Taxpayers should take notice and become compliant. The official IRS notice is below. IR-2018-87, April 9, 2018 WASHINGTON — The Internal Revenue Service

The Misunderstood Extension of time to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR)

- By : P. Patel

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced an automatic six-month extension for taxpayers required to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR). Taxpayers now have until October 16 to submit their FBARs for 2016 without being subject to penalties. There is no specific FBAR extension document or form

IRS Issues Reminders for FBARs and other International Requirements

- By : P. Patel

The Internal Revenue Service today reminded U.S. citizens and resident aliens, including those with dual citizenship, to check if they have a U.S. tax liability and a filing requirement. At the same time, the agency advised anyone with a foreign bank or financial account that a new deadline now applies to reports for these accounts,

Common Issues for US-India Tax Reporting

- By : P. Patel

US-India Cooperation: In 2015, India and the US signed an agreement to implement the Foreign Account Tax Compliance Act (FATCA) that will facilitate exchange of information between the two countries starting on October 1, 2015. Under the  agreement, Indian financial institutions would have to reveal information about US taxpayers to the revenue department which would

New Form Updates for Foreign Accounts

- By : P. Patel

The government has made a few recent form updates regarding the filing requirements for the following forms:  FinCEN Form 114 (Report of Foreign Bank and Financial Accounts) – automatic extension granted  Form 8938 (Statement of Specified Foreign Financial Assets) – specified domestic entities now required to file Form 8938  Form 5472 (Information

Beware of FATCA Letters

- By : P. Patel

FATCA letters (sometime called Self Certification letters) are going out from banks around the world to millions of US expats in readiness for reporting their financial information to the Internal Revenue Service (IRS). If you are one of the 8 million US expats subject to the Foreign Account Tax Compliance Act (FATCA), what do you

New IRS IRM with Updated Streamlined Filing Compliance procedures

- By : P. Patel

The Internal Revenue Manual (IRM) is essentially the IRS employee handbook on how to carry out all administrative and procedural matters, such as how to audit specific tax returns, collect taxes, process returns, or assess penalties. The IRM may be the most important tool provided to IRS employees as it contains vital information to help

Internal Revenue Service again issues annual reminder to US persons to report foreign accounts and foreign income

- By : P. Patel

The Internal Revenue Service recently once again issued its annual reminder to US persons to report foreign accounts and foreign income.  The reminders issued because of the widespread confusion and misunderstanding that exists among most US persons with foreign assets. Part of the confusion about reporting foreign assets arises from the fact there are two

New Leak of Offshore Accountholders Highlights the Need to Clean Up

- By : P. Patel

The U.S. Justice Department is reviewing reports about the offshore financial arrangements of global politicians and public figures based on 11.5 million leaked files from Panamanian law firm Mossack Fonseca, a department spokesman said yesterday. The department is determining whether the findings point to evidence of corruption and other violations of U.S. law. “The U.S.

US Entities with foreign assets have more information reporting

- By : P. Patel

The US Treasury has issued long-awaited regulations specifying the domestic taxpayers who have to disclose substantial foreign financial assets to the Internal Revenue Service (IRS) every year. The new rules, effective immediately, are linked to the Foreign Account Tax Compliance Act (FATCA). When FATCA was enacted in 2010, the new Section 6083D was added to

New FBAR Deadlines and Penalty Relief available

- By : P. Patel

The US Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the Act) has changed the filing date for the Report of Foreign Bank and Financial Accounts (FBAR), electronically filed with the Financial Crimes Enforcement Center (FinCEN) on Form 114, effective for reports for calendar year 2016 accounts due in 2017. The Act

Protective Filing of Information Returns

- By : P. Patel

There is an increased focus by the Internal Revenue Service (IRS) on offshore activities.  There are tax return and information return filing obligations that may be associated with foreign income, assets and transactions. Many taxpayers (including non-U.S. persons who might not otherwise consider themselves U.S. taxpayers) should resolve any reasonable doubt they might have in

Beware of Overlooked Common Overseas Tax Forms

- By : P. Patel

Practically all Americans with any income anywhere in the universe are required to file a U.S. return. Below are some of the most common tax forms that are generally part of an expat-American tax return. Common Overseas Tax Forms Form 2555 & 2555- EZ: These forms are for calculating your Foreign Earned Income Exclusion (FEIE) and to calculate

ABA COMMENTS ON THE 2014 OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : P. Patel

We are members of the American Bar Association Section of Taxation, which recently submitted comments to the IRS on the IRS Offshore Voluntary Disclosure Program (“OVDP”), the Streamlined Domestic Offshore Program (“SDOP”), and the Streamlined Foreign Offshore Program (“SFOP”). The comments are very constructive and excellent. It is hped that the IRS carefully considers and adopts many

IRS Announces New Statistics Regarding Voluntary Disclosures

- By : P. Patel

Since the initiation of the U.S. Internal Revenue Service’s (IRS) Offshore Voluntary Disclosure Program (OVDP) which originally began in 2009 and the Streamlined Filing Compliance Procedures first offered on September 1, 2012, the IRS recently reported that more than 54,000 taxpayers have come forward  and the result is more than $8 billion in  tax collections. The Streamlined Filing Compliance

Caution: Foreign Businesses Require Additional Reporting

- By : P. Patel

If you are an American entrepreneur with a foreign business interest or operating abroad then you should be aware of U.S. tax reporting obligations on non-U.S. businesses. If a U.S. taxable person (U.S. citizens or U.S. green card holders) owns a controlling stake in a foreign business, that business is likely a Controlled Foreign Corporation

Below is a List of Common Forms Applicable in Compliance Requirements for U.S. Citizens and Residents with Foreign Assets, Trusts, and Entities

- By : P. Patel

Foreign Financial Assets FinCEN Form 105 Report of International Transportation of Currency or Monetary Instruments FinCEN Form 114 Report of Foreign Bank and Financial Accounts (FBAR) Form 8938 Statement of Specified Foreign Financial Assets Foreign Trusts Reporting Forms Form 3520-A Annual Information Return of Foreign Trust With a U.S. Owner Form 3520 Annual Return to

India Expected to Sign FATCA Agreement Tomorrow

- By : P. Patel

India is expected to sign an inter-governmental agreement (IGA) for the US tax compliance law Foreign Account Tax Compliance Act (FATCA) tomorrow. FATCA is aimed at combating possible tax evasion by Americans through financial entities of other countries. FATCA is a U.S. law which seeks to facilitate flow of financial information. FATCA requires Indian banks to reveal account

Vatican Signs FATCA Agreement

- By : P. Patel

Praying may not be enough for non-compliant taxpayers (or evaders) under the Foreign Account Tax Compliance Act (FATCA).  The Vatican has become the latest FATCA signatory to share bank information with the US. The Vatican has signed an agreement with US authorities to report information about overseas accounts under the Foreign Account Tax Compliance Act

Beware: IRS Reminds Taxpayers of FBAR Deadline

- By : P. Patel

Last week, the Internal Revenue Service reminded all taxpayers with a filing requirement for a foreign bank account report to report their foreign assets by the June 30 deadline.  The IRS has been targeting FBAR compliance over the last several years and has prosecuted numerous non-compliant taxpayers. FBAR filings have risen dramatically in recent years