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Houston FBAR Attorney | International Tax Lawyer Texas

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If you reside in Houston, Texas and have unreported foreign bank and financial accounts, you may be looking for a Houston FBAR Attorney.  Sherayzen Law Office, Ltd. is a leader in FBAR compliance, including offshore voluntary disclosures concerning delinquent FBARs, consider us in your search. Let’s understand why this is the case.

Houston FBAR Attorney: International Tax Lawyer

First of all, it is very important to understand that, by looking for Houston FBAR attorney, in reality, you are searching for an international tax lawyer who specializes in FBAR compliance.

The reason for this conclusion is the fact that FBAR enforcement belongs to a very special field of US tax law – US international tax law. FBAR is an information return concerning foreign assets, which necessarily involves US international tax compliance concerning foreign assets/foreign income. Moreover, ever since the FBAR enforcement was turned over to the IRS in 2001, the term FBAR attorney applies almost exclusively to tax attorneys.

Hence, when you look for an FBAR attorney, you are looking for an international tax attorney with a specialty in FBAR compliance.

Houston FBAR Attorney: Broad Scope of Compliance and Offshore Voluntary Disclosures

When retaining Houston FBAR attorney, consider the fact that such an attorney’s work is not limited only to the preparation and filing of FBARs. Rather, the attorney should be able to deliver a variety of tax services and freely operate with experience and knowledge in all relevant areas of US international tax law, including the various offshore voluntary disclosure options concerning delinquent FBARs.

Moreover, as part of an offshore voluntary disclosure, an FBAR Attorney often needs to amend US tax returns, properly prepare foreign financial statements according to US GAAP, correctly calculate PFICs, and complete an innumerable number of other tasks.

Mr. Sherayzen and his team of motivated experienced tax professionals of Sherayzen Law Office have helped hundreds of US taxpayers worldwide to bring their tax affairs into full compliance with US tax laws. This work included the preparation and filing of offshore voluntary disclosures concerning delinquent FBARs. Sherayzen Law Office offers help with all kinds of offshore voluntary disclosure options, including: SDOP (Streamlined Domestic Offshore Procedures), SFOP (Streamlined Foreign Offshore Procedures), DFSP (Delinquent FBAR Submission Procedures), DIIRSP (Delinquent International Information Return Submission Procedures), IRS VDP (IRS Voluntary Disclosure Practice) and Reasonable Cause disclosures.

Houston FBAR Attorney: Out-Of-State International Tax Lawyer

Whenever you are looking for an attorney who specializes in US international tax law (which is a federal area of law, not a state one), you do not need to limit yourself to lawyers who reside in Houston, Texas. On the contrary, consider international tax attorneys who reside in other states and help Houston residents with their FBAR compliance.

Contact Sherayzen Law Office for Professional FBAR Help

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance, including FBARs. While our office is in Minneapolis, Minnesota, we help taxpayers who reside throughout the United States, including Houston, Texas.

Thus, if you are looking for a Houston FBAR Attorney, contact Mr. Sherayzen as soon as possible to schedule Your Confidential Consultation!

Child FBAR Obligations | FBAR Tax Lawyer & Attorney

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Child FBAR filing obligations is a topic that comes up fairly often in my practice. In this short essay, I will discuss whether a child is required to file an FBAR and how it should be done.

Child FBAR Obligations: What is FBAR

FBAR is a common abbreviation for the Report of Foreign Bank and Financial Accounts, officially called FinCEN Form 114, Report of Foreign Bank and Financial Accounts (used to be TD F 90-22.1). This form is used by US persons to report to the IRS a financial interest in or signatory authority over foreign financial accounts.  This is one of the most important forms that US taxpayers need to file in order to comply with their US international tax law requirements. A failure to file an FBAR when required may result in an imposition of severe IRS penalties.

Child FBAR Obligations: No Age Limitations

All US Persons are potentially subject to the FBAR requirement with no regard for their age. In other words, minor children with foreign accounts that satisfy the FBAR filing threshold must file FBARs. Even a newborn infant may have to file an FBAR. See BSA Electronic Filing Requirements For Report of Foreign Bank and Financial Accounts (FinCEN Form 114), p. 6.

Child FBAR Obligations: How to file a Child’s FBAR

While a child is responsible for the filing of his own FBAR, the child’s parent, guardian or other legally responsible person must file the FBAR for the child if the child is unable to do it himself.  Id. In such cases, the responsible person, parent or guardian must sign the FBAR on behalf of the child as “Parent/Guardian filing for child”.

Contact Sherayzen Law Office for Professional Help with Your Child FBAR Obligations

Parents often overlook their children’s FBAR obligations.  Time and again, I discover that otherwise fully-compliant taxpayers completely neglected their children’s FBARs.

If your child has not filed the required FBARs or he needs help complying with his current FBAR obligations, contact Sherayzen Law Office for professional help.  We are a highly-experienced team of international tax professionals led by an international tax attorney, Mr. Eugene Sherayzen.  We have helped hundreds of people around the world with their FBAR obligations, including offshore voluntary disclosures, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Tax Treaty Election FBAR Obligations | FBAR Lawyer & Attorney

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In my practice, I often receive calls from people who are confused about their FBAR obligations.  A recent call raised an important issue of whether a tax treaty election may affect one’s FBAR obligations.  In this brief article, I would like to address this issue of tax treaty election FBAR obligations.

Tax Treaty Election FBAR Obligations: What is FBAR ?

FinCEN Form 114, Report of Foreign Bank and Financial Accounts (used to be TD F 90-22.1) is commonly known as FBAR, the Report of Foreign Bank and Financial Accounts. This form is used by US persons to report to the IRS a financial interest in or signatory authority over foreign financial accounts.  This is one of the most important forms that US taxpayers need to file in order to comply with their US international tax law requirements. A failure to file an FBAR when required may result in an imposition of severe IRS penalties.

Tax Treaty Election FBAR Obligations: US Person

In another article, I already addressed in great detail the definition of a US Person.  Here, I will just briefly state the categories of persons who fall under the definition of a US Person for FBAR purposes:

(1) US citizens;

(2) residents of the United States;

(3) an entity, such as a corporation, partnership and a limited liability company, created or organized in the United States or under the laws of the United States;

(4) a trust formed under the laws of the United States; and

(5) an estate formed under the laws of the United States.

Tax Treaty Election FBAR Obligations: US Person & Tax Treaty Election

Now, we have come to the critical point and the main subject of this essay: would a tax treaty election to be treated as a resident of another country under a valid income tax treaty affect one’s FBAR obligations? In other words, can you elect out of being a US Person by making a tax treaty election?

The main general answer is no – a tax treaty does not and cannot affect FBAR filing obligations. See Amendment to the Bank Secrecy Act Regulations—Reports of Foreign Financial Accounts, 76 Fed. Reg. 10, 234 & 238 (Feb. 24, 2011); also, IRM 4.26.16.2.1.2(6) (11-06-15).  If a person meets the definition of a resident alien under IRC §7701(b) (i.e. he meets the FBAR definition of a US Person), even if he is not treated as a resident for income tax purposes due to an election under an income tax treaty, he will still be subject to FBAR.

The main exception to this rule would be an abandonment of US permanent residency through a tax treaty election, because it would affect the definition of a resident alien under IRC §7701(b).

Contact Sherayzen Law Office for Help with Your FBAR Compliance and FBAR Voluntary Disclosure

Sherayzen Law Office specializes in FBAR compliance and Offshore Voluntary Disclosures that involve prior FBAR noncompliance. We have helped hundreds of US taxpayers around the world with their FBAR issues, and we can hep you!

Contact Us Today to Schedule Your Confidential Consultation!

Form 114 US Person Definition | FBAR Tax Lawyer

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FinCEN Form 114 US Person definition is a highly important component of FBAR and US international tax compliance.  In this essay, I will discuss in detail the FinCEN Form 114 US Person definition and highlight some common issues that arise with respect to this definition.

Form 114 US Person Definition: What is Form 114 and What is its Relation to FBAR

FinCEN Form 114, Report of Foreign Bank and Financial Accounts (used to be TD F 90-22.1) is commonly known as FBAR, the Report of Foreign Bank and Financial Accounts. This form is used by US persons to report to the IRS a financial interest in or signatory authority over foreign financial accounts.  This is one of the most important forms that US taxpayers need to file in order to comply with their US international tax law requirements. A failure to file an FBAR when required may result in an imposition of severe IRS penalties.

Form 114 US Person Definition: Only US Persons are Required to File FBARs

It is important to understand that only “US Persons”, as defined by the IRS for the FBAR compliance purposes, are required to file FBARs.  What is the legal basis for this and where does this term “US Person” come from?

BSA (Bank Secrecy Act) §5314(a) states that the Secretary of the Treasury shall require a “resident or citizen of the United States or a person, in, and doing business in, the United States, to keep records, file reports”.  This seems like the FBAR requirement may apply a hugely broad group of people (far beyond US residents and citizens), especially if one takes into account that the “United States” is defined to include all 50 states, the District of Columbia, the territories, and insular possessions of the United States and the Indian lands as defined in the Indian Gaming Regulatory Act. 31 CFR §§1010.350(b) and 1010.100(hhh).  The territories and possessions of the United States include American Samoa, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, and the US Virgin Islands (see BSA Electronic Filing Requirements for Report of Foreign Bank and Financial Accounts (FinCEN Form 114), p. 5.).

Despite this initial impression, the actual definition that we use today is much smaller than what is mandated by §5314(a) and it is thanks to BSA §5314(b).  BSA §5314(b) states that the IRS has the discretion to interpret what this provision actually means and who is exempt from the FBAR filing requirement.

Armed with this authority, on February 26, 2010, the IRS issued proposed regulations, which for the first time defined that only “US Persons” needed to file FBARs. This is why we discuss the definition of a US Person when we discuss who is required to file FBARs.

Form 114 US Person Definition: Who is a Person

Before we turn to the definition of a “US Person”, we need to discuss who is considered to be a “Person” for the Form 114 purposes. Under 31 CFR §1010.350(b), a “person” includes:  natural persons (US citizens and US residents) and entities, including but not limited to: corporations, partnerships, trusts, or limited liability companies formed under the laws of the United States.  This definition includes entities disregarded for tax purposes (as long as they are US persons).

Additionally, pension and welfare plans are also US entities that need to file FBARs. See Amendment to the Bank Secrecy Act Regulations—Reports of Foreign Financial Accounts, 76 Fed. Reg. 10, 234 (Feb. 24, 2011); IRM 4.26.16.2.1.3(3) (06-24-21).  Even though the regulations do not mention it, the Form 114 instructions expand the “person” definition to estates.  It is important to note that, according to page 6 of the FBAR electronic filing instructions, an executor of an estate has a fiduciary obligation to file FBAR on behalf of the estate and on behalf of the decedent in the year following the decedent’s death.

Form 114 US Person Definition: General Definition of a US Person

The definition of a US person includes the following categories of persons:

(1) US citizens;

(2) residents of the United States;

(3) an entity, such as a corporation, partnership and a limited liability company, created or organized in the United States or under the laws of the United States;

(4) a trust formed under the laws of the United States; and

(5) an estate formed under the laws of the United States.

Let’s analyze each of these categories in more detail.

Form 114 US Person Definition: US Citizens

All US citizens are subject to the FBAR filing requirement, even minor children.  The general definition of a US citizen is contained in 8 USC §1401.

Form 114 US Person Definition: US Residents

All US residents are subject to FBAR filing requirements.  Pursuant to 31 CFR §1010.350(b)(2), the definition of “US residents” follows the definition of a resident alien under §7701(b) with one modification – the definition of the “United States” still follows 1010.100(hhh) described above. Also, see IRM 4.26.16.2.1.2 (11-06-15).

There are three classes of US residents: (1) US permanent residents; (2) persons who satisfied the Substantial Presence Test; and (3) persons who elected to be treated as US residents.  Let’s discuss each of these classes of US residents in more detail.

1.  US Permanent Residents (the “Green Card Test”)

A person is considered a US person if at any time during the calendar year the person has been lawfully granted the privilege of residing permanently in the United States under the immigration laws and such status has not been revoked. 26 USC §§7701(b)(1)(A)(i) and 7701(b)(6).

One of the most common issues occurs when a person has been issued a green card and he has not yet physically entered the United States. In such cases, this person would not be considered as a resident alien until he actually physically enters the United States. 26 USC §7701(b)(2)(A)(ii).  Once he enters the country, however, he becomes a US permanent resident and continues to be one until the green card is revoked or considered abandoned either judicially or administratively. See 26 CFR §301.7701(b)-1(b)(2) and 26 CFR §301.7701(b)-1(b)(3).

2.  Substantial Presence Test

Even if a person is not a US permanent resident, he may still be considered a US Person if he meets the IRC §7701(b)(3) substantial presence test.  In reality, there are two substantial presence tests.

The first substantial presence test is met if a person is physically present in the United States for at least 183 days during the calendar year. 26 USC §7701(b)(3).  The second substantial presence test is met if two conditions are satisfied: (1) the person is present in the United States for at least 31 days during the calendar year; and (2) the sum of the days on which this person was present in the United States during the current and the two preceding calendar years (multiplied by the fractions found in §7701(b)(3)(A)(ii)) equals to or exceeds 183 days. 26 USC 7701(b)(3)(A).

Let’s focus on the mechanics of the second calculation.  The way to determine whether the 183-day test is met is to add: (a) all days present in the United States during the current calendar year (i.e. the year for which you are trying to determine whether the Substantial Presence Test is met) + (b) one-third of the days spent in the United States in the year immediately preceding the current year + (c) one-sixth of the days spent in the United States in the second year preceding the current calendar year. See 26 USC §7701(b)(3).

Note that the Internal Revenue Code (IRC) provides a number of important exceptions to the Substantial Presence Test.  In this article, I am just providing the general rule.

3.  Election to be Treated as a US Resident Alien

A person who makes the first-year election to be treated as a US resident alien pursuant to §7701(b)(4) is a US Person for FBAR purposes.   Note, however, that this rule applies only to elections made under this provision.  A nonresident alien spouse of a US person who makes an election under the IRC §§6013(g) and 6013(h) to be treated as a resident alien will not be considered as a US person for the FBAR compliance purposes.  This is an important divergence between the income tax and FBAR rules.

Form 114 US Person Definition: US Entities, Trusts & Estates

Entities (corporations, partnerships, limited liability companies, et cetera), trusts and estates created, organized or formed in the United States or under the laws of the United States are generally considered to be US Persons for FBAR purposes.

A foreign subsidiary of a US parent will not have any FBAR obligations as long as it is not formed, created or organized under the laws of the United States. However, the US parent company may be required to include the foreign accounts of its foreign subsidiary on its FBAR. 31 CFR §1010.350(e)(2)(ii).

Moreover, a foreign entity organized in and under the laws of a foreign country will not be subject to the FBAR requirements even if it elects to be treated as a US entity for US tax purposes. See Amendment to the Bank Secrecy Act Regulations—Reports of Foreign Financial Accounts, 76 Fed. Reg. 10, 234-238 (Feb. 24, 2011).

Contact Sherayzen Law Office for Professional Help with Your FBAR Compliance

If you need questions concerning your FBAR compliance or a voluntary disclosure concerning your prior FBAR noncompliance, contact Sherayzen Law Office for professional help!  Our firm specializes in FBAR compliance and offshore voluntary disclosures to remedy prior FBAR noncompliance.

We have helped hundreds of clients around the world and we can help you! Contact Us Today to Schedule Your Confidential Consultation!