US IRS rules, regulations and laws, for US Citizens, Americans, green card holders, and nonresidents living abroad or moving to the US or out of the US.... valuable information on IRS rules concerning U.S. expatriates and their tax returns, and tax planning.... by an experienced International Tax Attorney
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June 15, 2008
TOUGH NEW EXPATRIATION TAX LAW ABOUT TO BECOME LAW
Hidden in the Soldiers Relief Act is new tax law which is about to be signed by the President and has been passed by Congress. The law will cause many of those who wish to expatriate and surrender their US residency or Citizenship to pay a significant amount of tax on the appreciation of their assets upon surrender of their citizenship as well as other measures. Click on the title to this article to go to our webpage which contains two links to articles about the new tax law.
May 30, 2008
Foreign Bank and Financial Account Information Report Deadline is 6/30, and IRS is Enforcing Penalties
Tax practitioners with clients with foreign bank accounts should notify clients of their responsibility to file the "Report of Foreign Bank and Financial Accounts" (Treasury Form TD F 90-22.1, referred to as FBAR) on or before June 30, 2008. The AICPA also reminds tax practitioners that when gathering information for Form 1040s and Form 1120s to ask clients about the existence of foreign bank accounts and to disclose the information in Question 7, Part III of Form 1040, Schedule B, Interest and Ordinary Dividends, and disclose it on Line 6a of Schedule N of Form 1120. Taxpayers who are currently filing Form 5471, Form 8858, Form 8865 or Form 3520 may also be subject to FBAR reporting requirements. Be aware that a new TD F 90-22.1 is being developed and expected to be released possibly over the next year.
This TD F 90-22.1 form is required to be filed by U.S. citizens and residents (including an individual, corporation, partnership, trust or estate) who have a financial interest in or signature or other authority over any financial accounts (including bank, securities, mutual funds or other types of financial accounts in a foreign country), if the aggregate value of such accounts exceeded $10,000 at any time during 2007. For more information on this, see the forms and instructions for TD F 90-22.1 and see related IRS international tax forms instructions and publications for the definition of a financial interest, frequently asked questions on FBAR,.
January 23, 2008
Making False Statements to IRS is a Crime
Former NFL player Dana Stubblefield pleaded guilty to lying to an IRS agent. AP report dated Jan. 18, 2008. Under a plea agreement he may spend up to 6 months in the federal penitentiary. He lied about using steroids.
We generally think of persons getting into criminal difficulties with IRS when they affirmatively make false statements in writings that were signed subject to stated penalties of perjury (maybe appearing back in the instructions). Indeed, Code Sec. 7206 imposes such a rule. However, there are other federal statutes that can turn an oral statement made to a revenue agent in the course of an audit into a trip to the penitentiary.
Code Sec. 7201 is the general “attempt to evade or avoid” section, which can apply to such oral misstatements. U.S. v. Beacon Brass Co, (1952, S Ct) 42 AFTR 654 , 344 US 43 . More threateningly, 18 USCS 1001 can apply. This is the general statute making it a crime to make false statements to federal agents.
Brogan v. U.S., 118 S. Ct. 105 (1998) ruled that a taxpayer that falsely says “no” when asked if he engaged in tax evasion can be criminally liable. Apparently this means that the correct answer is to plead the Fifth Amendment in that case, and otherwise say nothing.
The presence of these statutes, and the way they have been historically applied, makes it very difficult for IRS to carry off the model of being a customer service agency. Taxpayers need to remember that they can be liable for criminal prosecution for even casual conversations with IRS agents in the course of their duties, without any written penalties of perjury statement being violated.