Expats - IRS Finally Tries to Make It Easier for You to Find Answer`

The IRS has released an International, Nonresident and Expatriate tax index.  They call it Tax Map.  Hopefully it will answer your questions... but those answers may not be understandable.  That is where you may still need a US International Tax Expert.  You can go to the Tax Map here.

Topics covered run from Alien Departure Permits to Working Abroad.  If you need further help email us at ddnelson@gmail.com or visit our website at www.TaxMeLess.  where many of these complex tax issues are simplified.

The latest expat and international developments are immediately posted at our blog: www.usexpatriate.blogspot.com 

What to do when you have an undisclosed foreign account

What to do when a client has an undisclosed foreign account from the Journal of Accountancy. An excellent article with lots of good tips on how to handle the situation with the IRS

What is Correct FBAR Statute of Limitations? 6 years or ???

You still may not be safe after six years.  Closing the foreign account and not filing could make things worse!  Read more below:

http://www.forbes.com/sites/robertwood/2013/12/17/whats-the-fbar-statute-of-limitations/

IRS NEW INTERNATIONAL TAX INDEX FOR ALL ANSWERS?

IRS Tax Map http://taxmap.ntis.gov/taxmap/

12 Countries to Exchange Taxpayer Info With IRS

See list of countries and details of agreements below

http://mobile.businessweek.com/news/2013-12-16/12-agreements-signed-to-help-u-dot-s-dot-fight-offshore-evasion-taxes

US EXPAT ARE STILL SUBJECT TO ESTATE & GIFT TAXES

Read below. As an expat you must include your assets everywhere in the world. Gifts include those made abroad.  Green card holders living abroad are not covered by these rules and will owe US estate taxes on US based assets exceeding $60,000 in total value.

http://www.timesdispatch.com/business/investment/time-to-check-the-list-for-financial-and-estate-planning/article_d9aa1b36-595b-5072-8360-5fe54d0dacab.html?mode=jqm

2014- Four Estate Planning Tips You Need to Know

http://www.fool.com/how-to-invest/personal-finance/taxes/2013/12/11/estate-tax-in-2014-4-things-you-need-to-know.aspx

What To Do When Your Foreign Banks Asks Questions

What To Say When (Not If) Your Offshore Bank Asks, 'Are You Compliant With IRS?' http://www.forbes.com/sites/robertwood/2013/12/04/what-to-say-when-not-if-your-offshore-bank-asks-are-you-compliant-with-irs/

IRS COLLECTING PENALTIES FOR LATE FILED FORMS 5471- INFORMATION REPORTS ON FOREIGN CORPORATIONS

Read more in article from Accounting Today. http://www.accountingtoday.com/news/IRS-Gets-Better-Assessing-Penalties-Late-Reporting-Foreign-Corporations-68888-1.html

US Signs FATCA Agreements With Cayman Islands, Costa Rica

Read More Here.  US Signs FATCA Agreements With Cayman Islands, Costa Rica  Time to start reporting your Costa Rica or Cayman Island Bank and Financial Accounts before it is too late. If you need to catch up email us.

CANADIAN BANKS WILL HELP US IRS NAIL TAX CHEATS

Canadian banks to be compelled to share clients' info with U.S. http://www.cbc.ca/m/touch/politics/story/1.2437975

What does Green card and Citizenship surrender have to do with it? Tina Turner Knows

U.S. Citizens Renouncing Skyrocket--- and thats now called the  Tina Turner effect.

In the past many  months we have assisted  and advised over one  hundred US Citizens or Green Card holder surrender their US status which also relieves them of having to file any future US tax returns. The
hardest part is that you must first acquire citizenship in another country.  It is a two part process with part one involving the US State Department and part two involving the IRS.

If you live abroad, and have dual citizenship and want to learn more, email me at ddnelson@gmail.com

Read More in Forbes about Surrendering your US Status

Hunt for US Tax Evaders Widens

From USA TODAY Hunt for offshore tax evaders widens Feds expand hunt for offshore tax evaders http://usat.ly/1cleDlK

Penalty for failure to get health insurance

How Big Is The Penalty If You Don't Get Health Insurance? http://www.forbes.com/sites/beltway/2013/11/07/how-big-is-the-penalty-if-you-dont-get-health-insurance/

IRS BASIC TAX GUIDE FOR US GREEN CARD HOLDERS & PERMANENT RESIDENTS

The IRS has produced publication 4588 which give US tax guidance to Green Card holders  (or permanent residents without Green Cards) and how effectively surrender their Green Card for tax  READ IT AND DOWNLOAD IT HERE

purposes.

If you are a Green Card holder or permanent resident and need help with your income taxes or with respect to the dual status tax return and Form 8854 which may be due when you surrender it, we can help. We have helped in excess of one hundred clients do so to date.  Email us at ddnelson@gmail.com or visit our website at www.taxmeless.com. 

Current Status of Opting Out of IRS Voluntary Offshore Disclosure Program

If you have not filed required FBARs, 5471, 3520 and other foreign asset reporting forms with the IRS for past years the IRS recommends you enter the 2012 Offshore Voluntary Disclosure Program.  However, in many instances that 27.5% penalty seems excessive for the value of the assets involved.  The IRS says at any time you can opt out of the program which means your past filings or amendments will be sent immediately to audit who can assess a smaller amount of penalty or a greater amount of penalties than provided for in the Offshore Disclosure Program.

There is no written and very little reported information on what happens to those taxpayers who Opt Out of the Offshore Disclosure Program.  BNA, a leading tax publisher for tax professionals, has in the following article reported the current status of Opting Out.  READ THE ARTICLE HERE

If you need to discuss your alternatives and the possible consequences of filing past year foreign assets reporting forms and the related income we can help.  Email us at ddnelson@gmail.com

US Nonresidents Purchasing US Investment Property- IRS Tax Rules

US real estate can be a great investment and produce income as rental.  In most situations you can even obtain very favorable income tax treatment.  As a nonresident there are no restrictions on owning US real property for personal or rental purposes.

The Good Tax News:

• No restrictions on US nonresidents investing in US rental properties.  Nonresidents income tax on the investment is the same as that paid by US residents if they make the proper election to have the rental treated as doing business in the US.
• Residential rentals are depreciated over a 27.5 year period.  You must allocated the purchase price between the building (which can be depreciated) and the land which cannot be
  
  depreciated. The depreciation taken each year reduces your taxable income from the property.
• You must file form 1040NR with the IRS each year and a state income tax return if the property is located in a state with income taxes (which is most likely).
• If you wish to sell your original rental and trade into another one you are eligible to do so tax free if you qualify under the IRC 1031 tax free exchange rules. The new rental must still be located in the US.  You cannot tax free exchange into a rental property outside of the US.

The Bad News (with  possible solutions):

• If the nonresident dies while owning the property the fair market value of the property will be subject to US estate tax to the extent it exceeds $60,000.    However, the property will then have a new stepped up basis for US income tax purposes equal to the fair market value on the estate tax return.  There are ownership methods  using foreign trusts or corporations which  can be used to avoid the estate tax.

We can advise you on all the  US tax aspects  ( and most legal and financial questions) involved in the purchase of real estate or businesses in the US while you are a nonresident.  Email us at ddnelson@gmail.com or visit our website at www.TaxMeLess.com or www.expatattorneycpa.com.

US Expats and the Affordable Care Act (Obamacare) Requirements

We have had many questions from US expats whether or not they are going to have to purchase health insurance that qualifies under the Affordable Care Act (Obama care) or be penalized if they do not.

There is one safe harbor where you will not have to take any action.  If you are eligible to take the IRC 911  foreign earned income exclusion (Form 2555) either as a bonafide resident of a foreign country or under the physical presence test, you are specifically exempted from the health
insurance requirements of the Act.

Also, if you are working abroad but covered by the Group plan of your US employer or covered by medicare you are exempt from the Affordable Care Act.

Those who only work temporarily abroad for a few months and then return to the US are not exempted from the Acts requirements and must obtain health insurance or suffer penalties

Nonresidents who are not in the US long enough to become permanent residents (usually 183 days or more) are not required to obtain health coverage.

HSBC DEPOSITOR FOUND GUILTY ON FAILURE TO FILE FBARS AND SHOW TAXABLE INCOME FROM DEPOSITS

Read all details including a copy of the courts guilty verdict in the Federal Tax Crimes Blog by Jack Townsend.

Avoid these problems by catching up now. After IRS contacts you, it is too late to apply for the amnesty allowed in the Offshore Disclosure Program.  We can help

US SOCIAL SECURITY FOR THOSE OUTSIDE OF THE US AND US NONRESIDENTS

Sometimes there are problems receiving social security when you are outside the US or a nonresident of the US living in  another country.  The Social Security Administration has published a great pamphlet setting forth the rules.  They also are good at answering questions when you phone the SSA.  Their website is at www.ssa.gov.   The Pamphlet setting forth those rules can be Downloaded  HERE.