Failing to file an FBAR can result in civil penalties. The civil penalty for non-willful violations is $10,000. Common consensus was that the penalty would apply for each failure (i.e., for each unfiled or delinquent FBAR). In recent years, however, the government has sought to impose a separate $10,000 for each account. Fortunately, this nonsense …
Read moreDistrict Court Rules FBAR Penalties are Assessed by Form
One of the most perplexing topics for taxpayers with foreign accounts is understanding how to report them on their U.S. tax returns. Taxation of foreign pensions — in general Employees who contribute to a foreign (i.e., non-U.S) pension plan may be taxed on the both the contributions and accrued gain in their plans. Foreign pension …
Read moreReporting Foreign Pension Plans on U.S. Tax Returns
The IRS’ “streamlined domestic offshore procedures” are available to individuals who have non-willfully failed to report foreign financial assets and pay all tax due in respect to those assets. Streamlined domestic offshore procedures — eligibility Taxpayers must: fail to meet the non-residency requirement for the streamlined foreign offshore procedures; have previously filed a U.S. tax …
While a U.S. corporation is subject to tax on its earnings and then its shareholders on their dividends, the U.S. has no taxing jurisdiction on a foreign corporation that neither receives U.S.-source income nor has income effectively connected with the conduct of a U.S. trade or business. However, any dividends earned by U.S. shareholders from …
One of the most important concepts in taxation is tax residency. Individuals are be U.S. tax residents if they meet any of the following: They are a United States Citizen; or They are United States permanent residents (i.e., green card holders); or They meet the substantial presence test A U.S. tax resident is require to …
An individual is a U.S. tax resident if they meet either the below tests. 1. Lawful permanent resident test: An individual who holds a green card is considered a resident for tax purposes for the period of time that he was a lawful permanent resident 2. Substantial presence test: An individual that spends at least 31 …
Read moreCloser Connection Exception to the Substantial Presence Test
What is an FBAR? All United States tax residents are required to file FinCEN Form 114 if they have a a financial interest in, or signature or other authority over, foreign bank, securities, or other financial accounts, and whose total value, in the aggregate, at any time during the calendar year exceeds $10,000. When is …