TAX DEDUCTIONS FOR EXPAT PART TIME BUSINESSES

How Not To Run A Side Business: Navigating The Hobby Loss Rules http://www.forbes.com/sites/anthonynitti/2013/07/22/how-not-to-run-a-side-business-navigating-the-hobby-loss-rules/

WHAT IRS LOOKS AT TO DETERMINE IF IT WILL AUDIT YOUR TAX RETURN

Great flow chart graphic (see link below) showing the statistics and criteria for audit by the IRS.  Note that foreign bank accounts are one of the criteria.  The IRS has recently significantly increased teh audits of expatriates living abroad . Those audits are conducted by mail, phone, etc.  You will need written documentation to support anything they question on your return (without written documentation you will lose the deduction).

The IRS will often test your reported income by asking to see your bank statements, etc. to determine how much money is going through those statements and compare it with your reported income. Any difference must be explained.  Your lifestyle (home costs, living expenses, etc) must also be supported by your income or you may have to explain and prove where the additional funds to support it come from.

LINK TO AUDIT CRITERIA AND STATISTICS  http://www.entrepreneur.com/article/227437.

Email us if you need experienced attorney/CPA tax audit representation 

GAO: Foreign account “quiet disclosures” may be much higher than detected

Quite disclosure is when taxpayers with previously unreported foreign bank or financial accounts file amended returns to report the income and file the required FBAR forms (TDF 90-22.1) without going through the several formal IRS offshore disclosure programs.  The IRS does not approve of silent disclosure and has threatened to seek penalties against all taxpayers who try that method of filing past FBAR forms.  The Government Accounting Office has release a report which can be read below about the large number of quiet disclosures that have not yet been discovered by the IRS.

GAO: Foreign account “quiet disclosures” may be much higher than detected

4 Real Life Stories of Individuals Living Abroad who entered the IRS Offshore Disclosure Program

Marie Sapirie in Tax Analysts describes four real life scenarios of taxpayers who entered the IRS Offshore Disclosure program which includes the complications, problems and hardship suffered by these individuals. READ ARTICLE HERE

We have assisted well over a hundred expat US Citizens to date surface with the  IRS and through the complexities of the several programs available.  We can help you.  ddnelson@gmail.com  and www.expatattorneycpa.com