Frequent Scenarios in Offshore Voluntary Disclosures

- By : Parag Patel

…returns (Report of Foreign Gift or Bequest) on a timely basis to avoid severe penalties. As the IRS focuses more and more resources on international tax evasion techniques and tax…

Sale of Real Property from an Estate

- By : Parag Patel

…To discharge the lien, a Certificate of Release of Estate Tax Lien can be obtained from the IRS and recorded with the County Clerk in the county in which the…

Important Provisions of the American Taxpayer Relief Act of 2012

- By : Parag Patel

…will be adjusted annually for inflation (it is expected that the IRS will set it at $5,250,000 for 2013). The $5,000,000 indexed exemption for the generation skipping transfer tax has…

New Online System for Filing Your Report of Foreign Bank and Financial Accounts (FBAR)

- By : Parag Patel

…voluntary disclosure under the IRS’s Offshore Voluntary Disclosure Initiative (OVDI) and avoid or decrease penalties. The OVDI is open until August 31, 2011. FinCEN said it can only accept FBAR…

If you are a landlord, what changes need to be made to assure that you can be considered to be an active trade or business to qualify for the Section 199A deduction if you have net income from the rentals?

- By : Parag Patel

…A new Notice (IRS Notice 2019-7) provides a safe harbor that can enable landlords to be sure that they will qualify as an active trade or business to receive this…

The 65-Day Rule: What Every Trustee Should Know about Taxes

- By : Parag Patel

…the 65-Day Rule, the trustee must make the 663(b) election on page two of IRS Form 1041, the trust’s income tax return. If the trustee makes this election, he should…

Trinidad and Tobago and the United States sign new agreement to exchange of information under FATCA

- By : Parag Patel

…the Trinidad and Tobago government which will, in turn, relay that information to the IRS. To bring the agreement into force, Trinidad and Tobago’s Parliament must now pass the necessary…

Happy Birthday Streamlined Filing Compliance Procedure!

- By : Parag Patel

The Streamlined Filing Compliance Procedure (SFCP) was “born” two years old. Two years ago the IRS publicly announced the SFCP, which has been used by many non-compliant US taxpayers with…

Foreign mutual funds = Passive Foreign Investment Companies (PFICs)?

- By : Parag Patel

…their shareholders. These amounts are then reported annually to the IRS on a Form 1099. Foreign investment companies are not subject to U.S. taxes or to these disclosure rules. As…

Caution: Foreign Businesses Require Additional Reporting

- By : Parag Patel

…that information to the IRS so that the U.S. partners’ tax liability can be determined. Enforcement of such onerous rules has significantly ratcheted up with the introduction of FATCA and…

Foreign Account Tax Compliance Act (FATCA): More Information Sharing Agreements Expected

- By : Parag Patel

FATCA was enacted in 2010 by Congress to target non-compliance by U.S. taxpayers using foreign accounts. FATCA requires foreign financial institutions (FFIs) to report to the IRS information about financial…

Explore the OVDI opt-out option: Argue for Penalty Mitigation

- By : Parag Patel

The revised IRS OVDP FAQs offer helpful guidance on the opt-out option. The newly revised FAQs illustrate the pros and cons of opting out with six examples. See FAQ 51….

Checklist of tax forms for taxpayers with foreign assets

- By : Parag Patel

…used to calculate tax on your PFIC income. If you wait to file Form 8621 until you have realized gains or distributions, you’ll have to accept the IRS’s punitive default…

IRA Beneficiary Designation Planning

- By : Parag Patel

…never name the estate or other non-individual as a primary or contingent beneficiary. The only exceptions are when there is no interest in allowing heirs to use the tax deferral…

HSBC Payment of Largest Penalty and FATCA Encourages Taxpayers to Disclose

- By : Parag Patel

…investigation. For persons with undisclosed foreign accounts, KYC procedures means the likelihood of discovery is all the greater. Once the IRS identifies an individual for investigation then the Offshore Voluntary…

Estate Planning for Non-US citizens

- By : Parag Patel

…the IRS after the death of their spouse, the tax law denies any estate tax marital deduction for property passing to non-US citizen spouses. Thus, there are only three choices…

The Tax Issues of Expatriation

- By : Parag Patel

…are a resident of the treaty country and notify the IRS of that treatment on Forms 8833 and 8854. See Effect of Tax Treaties in chapter 1 for more information…

Seminar: Navigating Foreign Waters: The Complex Requirements of Foreign Accounts Compliance on US tax laws

- By : Parag Patel

With the IRS aggressively targeting taxpayers with unreported offshore accounts, tax professionals must know benefits and pitfalls of offshore accounts. Our firm presented technical seminars titled Navigating Foreign Waters: The…

FATCA Repeal Fails

- By : Parag Patel

…the IRS about their U.S. customers’ accounts. The U.S. loses an estimated $150 billion in tax revenue each year to tax haven abuse – a revenue shortfall that honest taxpayers…

Citizenship renunciation fee increases as American expatriates flee FATCA

- By : Parag Patel

…in any case, the IRS will impose an exit tax in the form of a capital gains charge on assets declared. It is also legally impossible to renounce citizenship while…

Comparison of Form 8938 and FBAR Requirements

- By : Parag Patel

…tax return. Penalties Up to $10,000 for failure to disclose and an additional $10,000 for each 30 days of non-filing after IRS notice of a failure to disclose, for a…

New Taxpayer Advocate Service Report Discusses Optouts out of the OVDI/OVDP

- By : Parag Patel

…The IRS has also started to establish exclusive “optout” offices, which probably means that more optouts are expected. Regardless, while opting out of the OVDI or OVDP amnesty programs may…

FBAR Deadline is June 28, 2013

- By : Parag Patel

…it to FinCEN (not the IRS) by June 30 of the following year on Form TD F 90-22.1. Note that this is not a tax filing, so FinCEN must receive…

Increase in the annual gift tax exclusion to $14,000

- By : Parag Patel

The IRS recently increased the annual gift tax exclusion from $13k to $14K in 2013. The annual gift tax exclusion is the amount you and your spouse can each gift…

Rare confluence of tax law and immigration law

- By : Parag Patel

…on the interest and dividend income she earned in her Swiss bank account and failed to file tax returns with the IRS for tax years 2011-2014. The indictment also charges…