Pilots, flight attendants and those that work on ships have complex US tax returns if they work abroad. Read more:
http://money.cnn.com/2014/07/01/pf/expat-taxes-irs/
July 2, 2014
June 29, 2014
Foreign Bank and Financial Account Forms Must Be Filed On Line by 6/30/14
Who Must File an FBAR by 6/30/14
United
States persons are required to file an FBAR if:
- The United States person had a financial interest in or signature authority over at least one financial account located outside of the United States; and
- The aggregate value of all foreign financial accounts (this includes banks, stock brokerage accounts, cash surrender value of foreign life insurance, foreign pension plans in most situations) exceeded $10,000 US dollars at any time during the 2013 calendar year to be reported.
United
States person includes U.S. citizens; U.S. residents; entities,
including but not limited to, corporations, partnerships, or limited
liability companies, created or organized in the United States or
under the laws of the United States; and trusts or estates formed
under the laws of the United States.
Exceptions to the Reporting Requirement
Exceptions
to the FBAR reporting requirements can be found in the FBAR
instructions.
There are filing exceptions for the following United States persons
or foreign financial accounts:
- Certain foreign financial accounts jointly owned by spouses;
- United States persons included in a consolidated FBAR;
- Correspondent/nostro accounts;
- Foreign financial accounts owned by a governmental entity;
- Foreign financial accounts owned by an international financial institution;
- IRA owners and beneficiaries;
- Participants in and beneficiaries of tax-qualified retirement plans;
- Certain individuals with signature authority over, but no financial interest in, a foreign financial account;
- Trust beneficiaries (but only if a U.S. person reports the account on an FBAR filed on behalf of the trust); and
- Foreign financial accounts maintained on a United States military banking facility.
Review
the FBAR instructions for more information on the reporting
requirement and on the exceptions to the reporting requirement.
Reporting and Filing Information
A
person who holds a foreign financial account may have a reporting
obligation even though the account produces no taxable income. The
reporting obligation is met by answering questions on a tax return
about foreign accounts (for example, the questions about foreign
accounts on Form 1040 Schedule B) and by filing an FBAR.
The
FBAR is a calendar year report and must be filed on or before June
30, 2014
for the calendar year 2013 foreign bank and financial account
balances.
Effective July 1, 2013, the FBAR must be filed electronically through
FinCEN’s BSA
E-Filing System.
The FBAR is not filed with a federal tax return. A
filing extension, granted by the IRS to file an income tax return,
does not extend the time to file an FBAR. There is no provision to
request an extension of time to file an FBAR.
A
person required to file an FBAR who fails to properly file a complete
and correct FBAR may be subject to a civil penalty not to exceed
$10,000 per violation for nonwillful violations that are not due to
reasonable cause. For willful violations, the penalty may be the
greater of $100,000 or 50% of the balance in the account at the time
of the violation, for each violation. For guidance when
circumstances such as natural disasters prevent the timely filing of
an FBAR, see FinCEN guidance,FIN-2013-G002 (June
24, 2013).
U.S. Taxpayers Holding Foreign Financial Assets May Also Need to File Form 8938
Taxpayers
with specified foreign financial assets that exceed certain
thresholds must report those assets to the IRS on Form
8938, Statement
of Specified Foreign Financial Assets,
which is filed with an income tax return. The new Form 8938 filing
requirement is in addition to the FBAR filing requirement. A chart
providing a comparison
of Form 8938 and FBAR requirements may
be accessed on the IRS Foreign
Account Tax Compliance Act web page.
June 20, 2014
IRS NEW 6/18/14 STREAMLINED DISCLOSURE PROGRAM - DETAILS AND PROCEDURES
The information on the program changes are:
- Streamline Filing Compliance Process (as changed 6/18/14), read here. This is the description. There are two types of Streamline filings: Non-resident and Resident. The Nonresident program -- referred to as Streamlined Foreign Offshore Procedures -- is described on a web page titled: U.S. Taxpayers Residing Outside the United States, read here. The Resident program -- referred to as Streamlined Domestic Offshore Procedures -- is described on a web page titled U.S. Taxpayers Residing in the United States, read here.
- Delinquent International Information Return Submission Procedures (as changed 6/18/14), read here. (This relates to the Forms required for entities, such as CFC's, trusts,etc.)
- IRS OVDP 2014 FAQs, read here. Pay attention particularly par. 1.1 on the changes from the original OVDP 2012.
The
new procedures are as follows:
1.
Foreign residents (requiring only foreign residence in the 3 year
period): File 3 years of delinquent or amended returns
and pay tax and interest. No penalties (including FBAR or
miscellaneous) will be assessed. Must also complete and sign a
statement on the Certification by U.S. Person Residing Outside of the
U.S. certifying (i) eligibility for the procedure, (ii) filing of all
required FBARs, and (iii) that the failure to file tax returns,
report all income, pay all tax, and submit all required information
returns, including FBARs, resulted from non-willful conduct.
2.
Nonforeign residents (Domestic residents): Must
file 3 years of returns and pay tax and interest. No penalties
other than a 5% miscellaneous penalty on foreign financial accounts
only will be assessed. Must complete and Sign the Certification
by U.S. Person Residing in the U.S. that (i) eligibility is met; (ii)
all FBARs have been filed; (iii) "the failure to report all
income, pay all tax, and submit all required information returns,
including FBARs, resulted from non-willful conduct;" and (iv)
that the miscellaneous penalty amount is accurate.
Nonwillful
conduct for the purposes of #1 and #2 is: "conduct
that is due to negligence, inadvertence, or mistake or conduct that
is the result of a good faith misunderstanding of the requirements of
the law;
The
taxpayers can be audited under the income tax audit guidelines but
will not be automatically audited.
A
couple of the material changes to OVDP 2012 are
described in par. 1.1 of the FAQs as follows:
• A 50% offshore penalty applies if either a foreign financial institution at which the taxpayer has or had an account or a facilitator who helped the taxpayer establish or maintain an offshore arrangement has been publicly identified as being under investigation or as cooperating with a government investigation. See FAQ 7.2.
• FAQ 7 has been modified to require that the offshore penalty be paid in full at the time of the OVDP submission.
June 19, 2014
NEW STREAMLINED OFFSHORE DISCLOSURE REDUCES PENALTIES AND IS EASIER
Read new IRS rules below.
http://www.irs.gov/Individuals/International-Taxpayers/Streamlined-Filing-Compliance-Procedures
June 18, 2014
New Easier IRS Disclosure Rules for Expats and those Living in USA
Read new rules at this link:
http://www.cpapracticeadvisor.com/news/11527344/taxpayers-offered-new-options-in-offshore-voluntary-disclosure-program
June 12, 2014
Bitcoin Accounts May Now Need to be Reported on FBAR (114) Regardless of Prior IRS Statement!
Read more below. To be safe due to uncertainties list your account!
http://www.bna.com/bitcoin-exchange-accounts-n17179891170/
On Line Poker Accounts Abroad Must Be Reported on Fbar ( form 114) by 6-30-14
Read more below. No extension of 6-30-14 Deadline for 2013 form 114 can be granted. Penalty for not filing is $10,000 or more!
http://www.onlinepokerreport.com/12647/fbars-us-online-gambling/
June 11, 2014
IRS RELEASES NEW TAXPAYER BILL OF RIGHTS
IR 2014-72
In a news release, IRS has announced the adoption of a "Taxpayer Bill of Rights" to help taxpayers better understand their rights.
Background. In the past, Congress passed multiple pieces of legislation with the title "Taxpayer Bill of Rights." But National Taxpayer Advocate Nina Olson discovered that most taxpayers were unaware that "they have rights before the IRS."
New rights. After getting input from Ms. Olson, and because existing rights are scattered throughout the Code making it difficult for taxpayers to understand, IRS has announced the new Taxpayer Bill of Rights. It takes the multiple existing rights embedded in the Code and groups them into these 10 broad categories, making them more visible and easier for taxpayers to find on IRS's website:
- 1. The right to be informed.
- 2. The right to quality service.
- 3. The right to pay no more than the correct amount of tax.
- 4. The right to challenge IRS's position and be heard.
- 5. The right to appeal an IRS decision in an independent forum.
- 6. The right to finality.
- 7. The right to privacy.
- 8. The right to confidentiality.
- 9. The right to retain representation.
- 10. The right to a fair and just tax system.
The rights have been incorporated into a redesigned version of Publication 1, a document that is routinely included in IRS correspondence with taxpayers. The new version has been added to irs.gov. IRS says print copies will start being included in IRS correspondence in the near future.
June 9, 2014
TAXES, WHO PAYS AND HOW MUCH - BY COUNTRY, BY STATE AND WEALTH LEVEL
Great article by Bill Moyers with 8 charts showing tax levels by country, state, income level, etc. READ MORE HERE
June 6, 2014
REPORTING BITCOIN ACCOUNTS ON FBAR (FORM 114) NOT REQUIRED FOR 2013
Virtual currency (such as bitcoin) isn't subject to FBAR reporting... for now. During a recent IRS webinar titled "Reporting of Foreign Financial Accounts on the Electronic FBAR," Rod Lundquist, Senior Program Analyst in IRS's Small Business/Self Employed (SB/SE) division, stated that for purposes of the current filing season (i.e., for 2013 FBARs due later this month), taxpayers aren't required to report Bitcoin on an FBAR. However, he cautioned that IRS is continuing to analyze virtual currency and that this policy could very well change going forward.
June 3, 2014
Tool to Check If Your Foreign Bank is Registered to Report Your Bank Account To IRS
Click link below to find out:
http://www.irs.gov/Businesses/Corporations/FATCA-Foreign-Financial-Institution-List-Search-and-Download-Tool
77,000 Foreign Banks to Share Tax Info with IRS
From USA TODAY
77,000 foreign banks to share tax info with U.S.
WASHINGTON — More than 77,000 foreign banks have agreed to share information about U.S. account holders as part of a crackdown on offshore tax evasion, the Treasury Department said Monday. The list includes 515 Russian financial institutions. Russian banks had to apply directly to the tax-collecting Internal Revenue Service because the U.S. broke off negotiations with Russia over an information-sharing agreement after Russia's actions in Ukraine. Nearly 70 countries have agreed to share information from their banks as part of a U.S. law that targets Americans hiding assets overseas. Participating countries include all the world's financial giants, as well as many places where Americans have traditionally hid assets, including Switzerland, the Cayman Islands and the Bahamas.
http://usat.ly/1h0qtJi
Get USA TODAY on your mobile device:
http://www.usatoday.com/mobile-apps
May 29, 2014
87 year old man owes 150% of high balance FBAR Penalty
Read more: http://mobile.businessweek.com/news/2014-05-28/florida-man-87-owes-150-percent-of-swiss-account-jury-says
Maybe IRS disclosure program would have been better but he applied too late.
May 28, 2014
IRS Direct Pay Now On Line for expats
If you file form 1040 as an expat or not. You can now pay taxes and estimates on line with a direct debit by IRS to your US bank account for no extra charge. Do it here- http://www.irs.gov/Payments/Direct-Pay
May 6, 2014
Ultimate US Tax Planning for Expatriates -CITIZENSHIP SURRENDER
Read about the high number of Americans surrender their US Citizenship. Once you do, in most situations (with some exceptions) you no longer have to file US tax returns. If you first acquire citizenship in a low income tax or no income tax country you may never have to pay income taxes again. Over 1,000 surrenders were listed for the first quarter of 2014 by the IRS and State Department.
Where are the low tax or no tax countries? See list of countries and tax rates HERE
We have represented and advised over a hundred expats or US residents surrender their US Citizenship (or Long Term Green Card Holders surrender their residency). We can prepare the tax forms, and give you the guidance to surrender successfully. As an Attorney CPA we offer our clients attorney client privilege (absolute confidentiality) and have the knowledge and experience to do all of the complex tax paperwork. If you need assistance email me at ddnelson@gmail.com or visit my website at www.Taxmeless.com or www.expatattorneycpa.com.
May 1, 2014
10 STEPS TO PAINLESS ESTATE PLANNING FOR EXPATS
Go to the following link for estate planning steps from CNN Money for expatriateshttp://money.cnn.com/2014/03/03/pf/estate-planning.moneymag/ . If you need help from a US expat tax Attorney and CPA with over 32 years experience for your expat estate planning write ddnelson@gmail.com.
IRS FBAR 114 REFERENCE GUIDE FOR TAXPAYERS
Download this excellent PDF reference guide to FBAR filing with answers to most questions. Need help or have further FBAR for Form 114 questions, write us at ddnelson@gmail.com. Remember FBARS now must be filed on line at FBAR FILING SITE and are due 6/30/14 for 2013 and cannot be extended.
April 29, 2014
Astralia and IRS sign tax sharing agreement
Read more here. http://uk.mobile.reuters.com/article/idUKKBN0DE0QI20140428?irpc=932
If you need to catch up your returns before its too late go to www.expat attorney CPA.com.
April 27, 2014
IRS Announces How to Handle your BITCOIN for US tax Purposes
The Internal Revenue Service has issued a notice providing answers to frequently asked questions (FAQs) on virtual currency, such as Bitcoin. These FAQs provide basic information on the U.S. federal tax implications of transactions in, or transactions that use, virtual currency.
In some environments, virtual currency operates like “real” currency -- i.e., the coin and paper money of the United States or of any other country that is designated as legal tender, circulates, and is customarily used and accepted as a medium of exchange in the country of issuance -- but it does not have legal tender status in any jurisdiction.
The notice provides that virtual currency is treated as property for U.S. federal tax purposes. General tax principles that apply to property transactions apply to transactions using virtual currency. Among other things, this means that:
- • Wages paid to employees using virtual currency are taxable to the employee, must be reported by an employer on a Form W-2, and are subject to federal income tax withholding and payroll taxes.
- • Payments using virtual currency made to independent contractors and other service providers are taxable and self-employment tax rules generally apply. Normally, payers must issue Form 1099.
- • The character of gain or loss from the sale or exchange of virtual currency depends on whether the virtual currency is a capital asset in the hands of the taxpayer.
- • A payment made using virtual currency is subject to information reporting to the same extent as any other payment made in property.
Further details, including a set of 16 questions and answers, are in Notice 2014-21, posted today on IRS.gov.
April 26, 2014
US International Social Security Agreements and Self Employed Expatriates
If you do not live and work in a country with a Social security agreement with the US, and are self employed as a sole proprietor (not an employee) you will have to pay US self employment tax which is medicare and social security ( 15.3% of your net profit).
The US has social security treaties with the countries below. If self employed these treaties set forth rules on which countries social security you can pay into.
| Countries with Social Security Agreements | |
|---|---|
| Country | Entry into Force |
| Italy | November 1, 1978 |
| Germany | December 1, 1979 |
| Switzerland | November 1, 1980 |
| Belgium | July 1, 1984 |
| Norway | July 1, 1984 |
| Canada | August 1, 1984 |
| United Kingdom | January 1, 1985 |
| Sweden | January 1, 1987 |
| Spain | April 1, 1988 |
| France | July 1, 1988 |
| Portugal | August 1, 1989 |
| Netherlands | November 1, 1990 |
| Austria | November 1, 1991 |
| Finland | November 1, 1992 |
| Ireland | September 1, 1993 |
| Luxembourg | November 1, 1993 |
| Greece | September 1, 1994 |
| South Korea | April 1, 2001 |
| Chile | December 1, 2001 |
| Australia | October 1, 2002 |
| Japan | October 1, 2005 |
| Denmark | October 1, 2008 |
| Czech Republic | January 1, 2009 |
| Poland | March 1, 2009 |
| Slovak Republic | May 1, 2014 |
http://www.ssa.gov/pressoffice/factsheets/colafacts2014.html
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