From Chipolatas to Weisswurst With A Side of Cherry Tomatoes: A Recipe For Whipping Up The Streamlined Offshore Penalty In Three Easy Steps
Before reading this blog, I make the following disclaimer. If it is getting close to lunch time and you can hear your stomach growling, you might want to put off reading this until after lunch. Readers who disregard this warning are doing so at their own risk. Calculating the offshore penalty within the Streamlined Domestic […]
Mad As Hell And Not Going To Take It Anymore: Two Brave Women Sue Canadian Government Over Controversial FATCA Deal
Is Ottawa violating Canadians’ constitutional rights to help the U.S. collect taxes? According to two Ontario women, it is. Two women are suing the Canadian government over a controversial deal in which Canada has agreed to share the tax information of U.S. persons who are Canadian residents with the IRS. On its face, the deal may […]
The End of Swiss Banking Secrecy?
“There is only one thing in the world worse than being talked about, and that is not being talked about.”[1] Oscar Wilde’s insightful observation about humankind’s proclivity toward public recognition does have exceptions. For a variety of reasons, men and women throughout the world have often sought confidentiality in their financial affairs, chiefly through banking […]
The Rules Governing Taxation of Foreign Nationals
I. The Residence of Individuals Individual residents of the United States, regardless of nationality, must pay U.S. tax on their worldwide income. U.S. taxation of nonresident aliens, by contrast, is largely limited to income from sources in the United States. Therefore, residence is the first and most important touchstone of U.S. taxation for foreign nationals. […]
Lowering the Bar for Willfulness for FBAR Penalties
The IRS has authority to assert FBAR civil penalties. Before delving into the FBAR abyss, this is a good time to debunk some FBAR myths. First, there is no such thing as an FBAR penalty within the Offshore Voluntary Disclosure Program (OVDP). The FBAR penalty exists only outside of the OVDP framework. However, there is […]
Understanding the PFIC Rules Without Suffering a Migraine
I would not be honest if I didn’t admit that this was a topic that I have procrastinated writing about for the longest time and have avoided like the Bubonic plague. It is such a tortured area of foreign asset reporting that many tax practitioners refer to it as, “a riddle wrapped in a mystery […]
Add the Letter ‘T’ to FATCA, and No One’s Getting Fat Except the IRS
In 2010 President Obama signed P.L. 111-147, the Hiring Incentives to Restore Employment Act. The purpose of the law is in its eponymous title, but the IRS got into the act with the Foreign Account Tax Compliance Act (FATCA) provisions. FATCA is an attempt by the IRS to “improve reporting compliance” — translation: “widen the net” […]
Employment Taxes And The Self-Employed Global Worker – So “Un”Happy Together – Part I (4)
I. Domestic Administration of Social Security Taxation and the Scope of International Coordination – continued c. The Third Aspect: Taxation of Benefits Up to 85% of social security benefits received by United States citizens and residents are included in income and subject to taxation, depending on the level of benefits, tax filing status, and other […]
Employment Taxes And The Self-Employed Global Worker – So “Un”Happy Together – Part I (3)
I. Domestic Administration of Social Security Taxation and the Scope of International Coordination – continued b. The Second Aspect: Benefits Eligibility In general, any individual is eligible to receive United States social security benefits at the age of sixty-two if he is considered “fully insured” and has filed the necessary paperwork. An individual is generally […]
Employment Taxes And The Self-Employed Global Worker – So “Un”Happy Together – Part I (2)
I. Domestic Administration of Social Security Taxation and the Scope of International Coordination – continued a. The First Aspect: Contributions Social security contributions are imposed as a tax via the Internal Revenue Code (Code) and collected by the Department of Treasury through the Service. Two statutes apply. With respect to employers and their employees, the […]