Watered-Down Build Back Better (BBB) For High-Income Taxpayers
After months of negotiations, the Democratic-led House of Representatives advanced the Build Back Better (BBB) Act to the Senate. The table below shows how the tax provisions have evolved since September. Many of the most controversial tax increase provisions were
Charitable Planning Strategies High-Net-Worth Individuals Need to Know for Year-End Tax Planning
This year has a few charitable tax law changes unique to 2021. We have compiled our top charitable tax planning ideas you may want to consider implementing this year before December 31st. 1. Take advantage of the higher limit this
IRS Provides Form 5471 Information-Filing Relief For Dormant Foreign Corps.
Every foreign corporation in which a U.S. person is generally involved in any capacity with at least 10% interest must be reported to the IRS on Form 5471. This is the way for the IRS to prevent the disguised accumulation
IRS Updates Process for FAQs
IRS finally figured out that taxpayers need help with IRS frequently asked questions (FAQs). IRS places FAQs on its website and taxpayers naturally read them and believe them to be true and reliable. IRS has issued more than 1,100 FAQs
New Tax Changes are Blowing in the Wind
There are several tax proposals that are under Congressional consideration, and the Biden administration released information concerning his proposal, the “American Families Plan.” The U.S. House Ways and Means Committee released proposed budget reconciliation legislation on September 13, 2021. The
FBAR Deadline Extended to December 31, 2021
The Financial Crimes Enforcement Network (FinCEN) today issued a notice extending the filing date of Reports of Foreign Bank and Financial Account (FBARs) for victims of recent natural disasters, including Hurricane Ida, the California Wildfires, and Tropical Storm Fred. Victims
Pandora’s Box Has Opened: Pandora Papers
An unprecedented leak of financial records known as the Pandora Papers has revealed the offshore financial assets of dozens of current and former world leaders and hundreds of politicians from Asia and the Middle East to Latin America. The International Consortium of Investigative
New Comments on the IRS Voluntary Disclosure Program
We are members of the American Bar Association Section of Taxation, which on September 28, 2021 submitted comments to the IRS on the IRS Voluntary Disclosure Program (“VDP”), the Streamlined Domestic Offshore Program (“SDOP”), and the Streamlined Foreign Offshore Program (“SFOP”). In the
An Ill-advised IRS Streamlined Filing Compliance Procedure Filing
Yesterday the US Department of Justice announced here the indictment of Mark Anthony Gyetvay, who filed to enter IRS “Streamlined Filing Compliance Procedures in which he attested that his prior failure to file FBARs and tax returns was non-willful.” Apparently, his Streamlined
Parag Patel Esq. speaks at New Jersey Society of Certified Public Accountants (NJCPA) Webinar “What Tax Professionals Should Know About Trusts and Estates: Estate Tax Reform and the 2021 Planning Window”.
Parag Patel Esq. will be a featured speaker at a virtual New Jersey Society of Certified Public Accountants (NJCPA) Webinar panel entitled “What Tax Professionals Should Know About Trusts and Estates: Estate Tax Reform and the 2021 Planning Window”. Mr.
Upcoming live video webinar: U.S.-India Tax Planning: Reporting Issues, Traps to Avoid, Tax Treaties, FTC, FACTA/FBAR Reporting, Passive Income
I am pleased to announce that I will be speaking in an upcoming Strafford live video webinar, “U.S.-India Tax Planning: Reporting Issues, Traps to Avoid, Tax Treaties, FTC, FACTA/FBAR Reporting, Passive Income” scheduled for Thursday, October 21, 1:00pm-2:30pm EDT. Our panel will provide
The IRS Needs Help
The IRS is a malfunctioning mess. A recent report from the National Taxpayer Advocate, states that the IRS has failed to answer taxpayers’ requests for assistance. I have been a tax lawyer for decades and have seen many different IRS problems over
Parag Patel Esq. presents new tax law changes at Broward Chapter of The Florida Society of Enrolled Agents (FSEABC) Webinar
Parag Patel Esq. will be the main speaker at a virtual Broward Chapter of The Florida Society of Enrolled Agents (FSEABC) Webinar panel entitled “Upcoming federal tax law changes: What to Expect”. Mr. Patel will discuss the new tax changes
New IRS procedures for Streamlined Filing Compliance Procedures for 2017 transition tax filers
The IRS quietly created new procedures for Streamlined Filing Compliance Procedures earlier this month relating to filings with “transition tax” due under Internal Revenue Code Section 965. The new procedures apply to Streamlined Domestic Offshore submissions and Streamlined Foreign Offshore
Unfiled FBAR Penalties Survive Death
Do FBAR penalties survive death? According to a new court ruling, the answer is clearly yes (unfortunately). In United States v. Gill, 2021 U.S. Dist. LEXIS 12203 (S.D. Tex. 6/30/21), the court ultimately held that an FBAR nonwillful penalty survives
FBAR Deadline Automatic Extension
All U.S. citizens and permanent residents are required to annually file a U.S. income tax return reporting their worldwide income from all sources. Additionally, U.S. citizens and permanent who have an interest in or signatory authority over foreign bank and
Solution: Streamlined Domestic Offshore Procedures
In the midst of tough tax season, many U.S taxpayers are unfortunately surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their tax and reporting obligation, there are
Dormant foreign corporations not subject to complicated Form 5471 filing requirements
The reporting requirements for IRS Form 5471 are complex, including ‘category of filer’ and required schedules. However, very few taxpayers know that there are special simplified filing rules for a foreign dormant corporation. Although not widely published, IRS Revenue Procedure
Happy Birthday Streamlined Filing Compliance Procedure
The Streamlined Filing Compliance Procedure (SFCP) was “born” six years ago. Six years ago the IRS publicly announced the SFCP, which has been used by many non-compliant US taxpayers with the disclosure of foreign assets. SFCP has two sub-programs: one
What is a SLAT?
While a slat is commonly known as a thin, narrow strip or bar of wood or metal, a SLAT is also known to estate planning professionals as a Spousal Lifetime Access Trust (SLAT). With the current lifetime estate and gift
New Form 3520 Penalties
In November 2020, the IRS changed the rules for assessing penalties for Form 3520, the Annual Return to Report Receipt of Foreign Gifts. Form 3520 is filed for any U.S. Taxpayer who receives a foreign gift or inheritance totaling over
US Tax Implications of Foreign Life Insurance
The U.S. tax code contains excellent tax benefits for U.S. (domestic) life insurance companies, and the owners of their life insurance policies. However, for U.S. citizens and U.S. residents to obtain those tax benefits with respect to a foreign life insurance policy,
Malta pension plans listed on “Dirty Dozen” list of “tax scams”
Last week, the Internal Revenue Service (IRS) placed certain Malta-based pension plan arrangements on its annual “Dirty Dozen” list of “tax scams.” In its recent news release, the IRS warns that it is evaluating the validity of such arrangements and
Money Laundering 101
Over the years, some clients and advisors have asked us about how to detect possible money laundering activities. To do so, an explanation of the basics is required. Money laundering is the process in which criminals obscure the origins of
Consequences of Filing False Streamlined Filings
The IRS Streamlined Domestic Offshore Program (“SDOP”) allows eligible U.S. Taxpayers who failed to disclose foreign financial accounts to voluntarily disclose their conduct to the IRS and pay a reduced penalty. However, to be eligible for the SDOP program, the
Implications of United States v. Horowitz: Reckless = Willful?
In a recent court case, a court found that “willfulness” in the context of civil FBAR penalties is satisfied by recklessness and does not require disregard of a known legal duty. In United States v. Horowitz, (4th Cir. Oct.
The IRS’ Complex Statute of Limitations
An IRS tax audit can be expensive and stressful. That is why is always important to check whether the IRS statute of limitations has expired for the audit. The expiration of the statute of limitations can terminate an audit. When
Willful FBAR Penalties
U.S. Citizens who have a financial interest in or signature authority over foreign bank accounts that hold an aggregate amount greater than $10,000 are required to report the accounts to the IRS each year by filing a Report of Foreign
What to do After Receiving Notice CP 15 or CP 215 for Failure to Timely File Form 3520
When receiving a penalty for failure to timely file Form 3520, Notice CP 15 or CP 215 is sent to the taxpayer notifying the taxpayer which requires a timely response. When receiving Notice CP 15 or CP 215 a Taxpayer
Penalties for Not Filing Form 3520
The IRS requires a U.S. person receiving a gift from a foreign individual, corporation, partnership, or estate to report by filing Part IV Form 3520. Failure to file or late, incorrect, or incomplete filing is subject to a severe penalty.