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January 30, 2012

Singapore is one of Best Places for Your Offshore Business Corporation

Singapore offers low taxes, stability and lots of other benefits if you are looking at where to locate your Offshore Corporation to conduct your business abroad.  This applies both to expatriates living abroad and to US business owners that want to conduct foreign business.

Read more about why Singapore is excellent off Offshore Business Corporations in this article in the PRWEB

There are many US tax concerns and filing requirements when you create a Singapore Company  and you are a US citizen that owns 10% or more of that foreign corporation. Read our website at  to learn more about those IRS tax requirements.

India Signs International Tax Treaty to Exchange Tax Info with IRS

The new treaty will provide for mutual assistance and exchange of information between India and the other members of the Agreement.  One member is the USA.  It not only provides for exchange of information between the taxing agencies (IRS) but also provides for assistance in recovery of taxes.

It provides for simultaneous tax examinations in other countries and sharing of relevant information.  It also allows tax officials from one member country to enter the other to interview individuals and examine records.  The information received from another country can be used also for money laundering investigations.

Read more and the names of the Member nations in this Article from The Hindu

If you have been living in India and not filing your US tax return on your worldwide income even though you are a US Citizen or Green Card Holder, now is the time to catch up and become current with your returns. In the past few years we have helped hundreds of US taxpayers catch up and saved them untold sums in penalties and interest.

DOWNLOAD OUR EXPATRIATE TAX RETURN QUESTIONNAIRE HERE, and send it to us for a fee quote subject to your approval. It can be used for all past unfiled tax years.

January 26, 2012

Legal & Tax Procedures For US Citizenship Surrender/or Surrender of Green Card by Long Term Resident

Surrendering your US Citizenship or long term US Residency (holding a Green Card for 8 years or more) is a two step process.  Step one: A Citizen must fill out the forms and meeting with the US Embassy and Consul and paying the $450 fee.  A Green Card holder only needs to file the proper form with Immigration. Once that is done, you have established the effective date and completed the legal side.  Of course, they will not allow you to surrender your US Citizenship until you prove you are a Citizen of another country.  The State Department will not allow you to become a man or woman "without a country."

Of course surrendering your Citizenship or Residency relieves you of the necessity of filing US tax returns in future years except with respect to any of your future earnings the have a US source.

Step Two:  You must then get final approval of the Internal Revenue Service.  You must file a final US tax return (A Dual Status Return) and Form 8854 to determine if you owe an exit tax or not.  If you are married, both you and your spouse must go through this procedure separately.

As an Attorney/ CPA I  have advise and assisted over 70 clients with their US Citizenship or Green Card  surrender.  Let us help you.  READ MORE DETAILS OF THE PROCEDURES HERE. 

Mitt Romney 2010 Tax Return - View it Here and See the Tax Results of His Many Foreign Holdings

Mitt Romney's 2010 tax return (203 pages)  is a study in  the various IRS Forms required to report foreign income and holdings.  It includes the following IRS forms required for various foreign items of income:

  • Form 1116- Foreign Tax Credits
  • Form 8865 - Foreign Partnerships
  • Form 926 - Contributions to Foreign Corporations
  • Form 5471- Foreign Corporation ownership
  • Form 8621- Passive Foreign Investment Company Reporting

January 17, 2012

2011 Chinese Taxes for Expatriates Living in China

China Briefing has an excellent article stating the rules for US expatriates living in China with respect to their Chinese Income Tax Filing Requirements. The rates run for 3% to 45%.  READ MORE HERE

Of course the income taxes you pay in China can be credited against our US income tax rate, and any  excess (above the US tax amount on the same income) can be carried back 2 years and then carried over. To download our US expat tax questionnaire CLICK HERE

January 15, 2012

Taxpayer Advocate Office and IRS in vicious fight over Unfair Practices on FBAR Voluntary Offshore Disclosure Program

The Taxpayer's Advocate Office is still on the side of the Taxpayer. They are in a vicious fight with the IRS over their "bait and switch" and unfair practices in the 2009 and 2011 Voluntary Offshore Disclosure Program with respect to the FBAR (TDF 90-22.1) penalties. If they cannot agree, the dispute may go to Congress. READ MORE HERE

January 11, 2012

IRS Used "Bait and Switch" Tactics in Prior Offshore Disclosure Programs per the Taxpayer Advocate Office

This Article from  CNBC describes  the less than ethical actions (or perhaps straightforward)  of the IRS in connection with the 2009 and 2011 Voluntary Disclosure Program.  Many taxpayers paid more than they had to pay if they had not entered the program and the IRS took it!  The Taxpayer Advocate Office of the IRS whose job it is to monitor the IRS and correct problems, errors and this type of actions included this information in their report to Congress.  READ ARTICLE HERE

The IRS has announced a new Offshore Disclosure Program for 2012 and perhaps beyond which will  be mostly the same as the 2011 program with some changes which the IRS has stated they will provide further details in the next few weeks.  It is not too late to enter the program and perhaps reduce your penalties.  With proper representation by an experienced Attorney and CPA, you will be protected from the IRS "Bait and Switch."

January 9, 2012

IRS Offshore Programs Produce $4.4 Billion to Date for Nation’s Taxpayers; Offshore Voluntary Disclosure Program Reopens

 The Internal Revenue Service today reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs.
The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.
“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.”
The program is similar to the 2011 program in many ways, but with a few key differences. Unlike last year, there is no set deadline for people to apply. However, the terms of the program could change at any time going forward. For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.
“As we’ve said all along, people need to come in and get right with us before we find you,” Shulman said. “We are following more leads and the risk for people who do not come in continues to increase.”
The third offshore effort comes as Shulman also announced today the IRS has collected $3.4 billion so far from people who participated in the 2009 offshore program, reflecting closures of about 95 percent of the cases from the 2009 program. On top of that, the IRS has collected an additional $1 billion from up front payments required under the 2011 program.  That number will grow as the IRS processes the 2011 cases.
In all, the IRS has seen 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. Since the 2011 program closed last September, hundreds of taxpayers have come forward to make voluntary disclosures. Those who have come in since the 2011 program closed last year will be able to be treated under the provisions of the new OVDP program.
The overall penalty structure for the new program is the same for 2011, except for taxpayers in the highest penalty category.
For the new program, the penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011.
Participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.
Participants face a 27.5 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty. Smaller offshore accounts will face a 12.5 percent penalty. People whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the new OVDP will qualify for this lower rate. As under the prior programs, taxpayers who feel that the penalty is disproportionate may opt instead to be examined.
The IRS recognizes that its success in offshore enforcement and in the disclosure programs has raised awareness related to tax filing obligations. This includes awareness by dual citizens and others who may be delinquent in filing, but owe no U.S. tax. The IRS is currently developing procedures by which these taxpayers may come into compliance with U.S. tax law. The IRS is also committed to educating all taxpayers so that they understand their U.S. tax responsibilities.
More details will be available within the next month on In addition, the IRS will be updating key Frequently Asked Questions and providing additional specifics on the offshore program. 

January 5, 2012

IRS Offers in Compromise for Expatriates

Sometimes, though not often, US expatriates after filing all past returns discover the owe a large amount of  taxes penalties and interest to the IRS.  These taxes may be attributable to income earned before becoming an expatriate and living outside the USA.  These taxpayers often ask us about filing an offer in compromise.

An offer in compromise allows you to settle your tax debt for less than the full amount you owe. It may be a legitimate option if you can't pay your full tax liability, or doing so creates a financial hardship. We consider your unique set of facts and circumstances:
  • Ability to pay;
  • Income;
  • Expenses; and
  • Asset equity.
The IRS generally approves an offer in compromise when the amount offered represents the most we can expect to collect within a reasonable period of time. You should explore all other payment options before submitting an offer in compromise because current statistics indicated only about 15% of thosefiled are accepted by  the IRS. The Offer in Compromise program is not for everyone. If you hire a tax professional to help you file an offer, be sure to check his or her qualifications. There are many advertisements on TV that offer this service but generally only take a large nonrefundable down payment when it is clear your offer in compromise will not be accepted by the IRS.

Make sure you are eligible

Before we can consider your offer, you must be current with all filing and payment requirements. You are not eligible if you are in an open bankruptcy proceeding.

We have help many expats file successful offers in compromise. We do not accept filings that do not have a good chance of being accepted by the IRS.

Quick Guide to 2011 Tax Rates and Other Rules

The AICPA has published a quick guide to tax rates and other specific numbers for tax year 2011.  It is a useful quick guide to calculate your potential tax liability and other specific rules.  It includes long term capital gain rates, self employment tax rates, exemptions, standard deductions, dependent deductions, etc.   Click here to view it.