Form 8938: Who Must File The Frankenstein Son of FBAR

In an earlier article, I discussed in general that the IRS imposed a new tax reporting requirement on individual taxpayers who hold specified foreign financial assets with an aggregate value exceeding a relevant threshold.   Such taxpayers will need to report those assets on the new IRS Form 8938, which must be attached to the taxpayer’s [...]

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Controlled Foreign Corporations: Subpart F History through 1962

The purpose of the article is to provide a brief historical overview of the circumstances leading up to the enactment of the famous “Subpart F” rules through the year 1962. Subpart F of Subtitle A, Chapter 1, Subchapter N, Part III of the Internal Revenue Code (IRC Sections 951-965) was first enacted by the U.S. [...]

Foreign Qualified Dividend Income

In U.S. tax law, classification of income plays a very important role in determining your tax liability. One of the most important classifications is whether you have qualified dividend income eligible reduced tax rates applicable to certain capital gains – in most case, this means 15% tax rate. As with almost every issue in U.S. [...]

AMT Exemption Amounts for the Tax Year 2011

The Alternative Minimum Tax (the “AMT”) attempts to ensure that anyone who benefits from certain tax advantages pays at least a minimum amount of tax. Congress created the AMT in 1969, targeting higher-income taxpayers who could claim so many deductions they owed little or no income tax. The AMT provides an alternative set of rules [...]

IRS Announces Procedures Adjusted for APA and Certain Competent Authority Requests

The Internal Revenue Service, Deputy Commissioner (International), Large Business and International Division (“LB&I”), announced certain organizational and administrative changes and transitional procedures in connection with the creation of the Advance Pricing and Mutual Agreement (“APMA”) program. Prior to February 26, 2012, the Advance Pricing Agreement (“APA”) program was part of the Office of the Associate [...]

Official Treasury Currency Conversion Rates of December 31, 2011

The U.S. Department of Treasure recently published its official currency conversion rates for December 31, 2011 (they are called “Treasury’s Financial Management Service rates”). These rates are important for many reasons, but one reason especially stands out for persons who are required to file the FBARs. The latest (January 2012) FBAR instructions require the use [...]

IRS Form W-9, FATCA and FBAR Compliance

The Foreign Account Tax Compliance Act (“FATCA”) produced a major catalyst for the usage of Form W-9 by the banks in order to identify whether their client are U.S. taxpayers. This article explores the connection between the IRS Form W-9, FATCA and FBAR compliance. IRS Form W-9 The essence of the IRS Form W-9 is [...]

IRS Form 944 Basics

General Obligations To Deposit Payroll and Income Tax Withholdings Under federal law, employers must withhold Social Security, Medicare and Federal income taxes from their employees’ paychecks and deposit them with the federal government (together with the employer’s own payroll tax contributions). In addition to the deposit requirements, the employers are also obligated to file Form [...]