Welcome to part 1 of our Allen Barron International Tax Primer for US Taxpayers and Expatriates. The United States is one of the few countries in the world that taxes its citizens on their worldwide income. US taxpayers are required to report all sources of income, worldwide, not just income...
The Tax Implications of Offshore Bank Accounts and Investment
What are the tax implications of offshore bank accounts and investments as well as foreign corporate ownership? Allen Barron is uniquely positioned to provide proven international tax advice, as well as legal counsel and supporting accounting services. Tax, legal and accounting in a single source vendor. The IRS and California's...
Costly Facts About IRS PFIC Rules US Taxpayers Should Know
What are some other unfortunate and costly facts you must know about IRS PFIC rules and your investments? There has been a growing issue with Passive Foreign Investment Company or PFIC designations by the IRS. US taxpayers are consistently surprised to learn that their investment qualifies under IRS PFIC rules....
Updates on Offshore Investments and IRS FBAR Reporting Requirements
The world is still unpacking the impact of FATCA and the IRS' intent to track offshore bank accounts, investments and corporations. The result is continuing pressure on offshore investments and IRS FBAR reporting requirements including PFIC tax calculations and the continuing expansion of 50% penalties on specific institutions identified by...
Year End Tax Planning – Why Turbo Tax is No Solution for FBAR
Why are there so many people who have used Turbo Tax and other home tax software solutions (including the free IRS version) who are now facing tens of thousands of dollars in FBAR penalties, fines and IRS audits? Because Turbo Tax is no solution for FBAR or any other remotely...
The California Waters Edge Election
What is the California Waters Edge Election and how does that affect taxation for certain taxpayers with offshore business income and assets? The California water's edge election was established in 1986 and was designed to restrict California's "application of the worldwide combined reporting method of determining income from California sources." Instead...
World Leaders Developing New Standards to Identify and Exchange Beneficial Ownership Information
The goal of financial transparency worldwide is gaining momentum. The US FATCA initiative has spawned like legislation around the globe. The benefit of taxation derived from the discovery of offshore taxpayer financial accounts and interests has world leaders developing new standards to identify and exchange beneficial ownership information for bank...
IRS Form 5471 Carries Heavy Penalties and Consequences
If you have any ownership position in an offshore or foreign corporation it is important to understand your reporting responsibilities to the IRS. If you own 10% or more of any foreign corporation's voting authority, you are required to accurately and transparently complete IRS Form 5471 and attach it to your federal return...
IRS FBAR Audits and Prosecutions Have Begun
The IRS FBAR audits and prosecutions have begun and the clock is ticking for those who have yet to come into full FBAR compliance with the IRS. A Connecticut man recently plead guilty to the offshore scheme he used to conceal income from the IRS. The man, a duty-free importer...