FBAR Lawyers Denver Archives - Sherayzen Law Office

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Denver FBAR Attorney | International Tax Lawyer Colorado

January 21, 2024/in FBAR Lawyers, Legal Notes /by Manager

If you reside in Denver, Colorado and have unreported foreign bank and financial accounts, you may be looking for a Denver FBAR Attorney. Sherayzen Law Office, Ltd. (“Sherayzen Law Office”) is a leader in FBAR compliance and you should consider us in your search. Let’s understand why this is the case.

Denver FBAR Attorney: International Tax Lawyer

First of all, it is very important to understand that, by looking for Denver 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.

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

When retaining Denver 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.

Denver 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 Denver, Colorado. On the contrary, consider international tax attorneys who reside in other states and help Denver 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 Denver, Colorado.

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

FBAR Financial Interest Definition | FBAR International Tax Lawyer & Attorney | FinCEN Form 114

March 30, 2019/in FBAR, Lead Article /by Manager

In this article, I discuss one of the most important aspects of FBAR compliance – the FBAR financial interest definition.

FBAR Financial Interest: Legal Relevance and Context

FBAR is the acronym for the Report of Foreign Bank and Financial Accounts, FinCEN Form 114. A US person who has a financial interest in foreign bank and financial accounts must file FBARs to report these accounts as long as their aggregate value exceeds the FBAR filing threshold. The key issue here is the definition of “financial interest” for FBAR purposes.

FBAR Financial Interest: Classification of Financial Interest

As I just stated, the FBAR financial interest definition describes a situation when a US person has a “financial interest” in a foreign account. It turns out that there are six possible situations when a US person may have a financial interest in a foreign account.

These situations can be divided into three categories: direct ownership, indirect ownership and constructive ownership. Let’s explore them in more detail.

FBAR Financial Interest: Direct Ownership

A US person has a financial interest in a foreign account if he is the owner of record or holder of legal title for this account. It does not matter whether he maintains the account for his own benefit or for the benefit of another person (US or foreign). As long as he is the owner of the account, he has a financial interest in the account and must file an FBAR to report it if the account’s highest value (together with all other foreign accounts of this person) exceeds $10,000.

FBAR Financial Interest: Indirect Ownership

There are four different scenarios which may result in having a reportable indirect FBAR financial interest in a foreign account:

1. Indirect Ownership Through a Corporation

A US person has a financial interest in a foreign account if the owner of record of holder of legal title is a corporation in which a US person owns directly or indirectly: (i) more than 50 percent of the total value of shares of stock; or (ii) more than 50 percent of the voting power of all shares of stock.

This means that, if a US corporation owns a foreign company which has a foreign account, then this US corporation has a financial interest in this account through its direct ownership of the foreign company. In other words, the US corporation will need to file an FBAR for the foreign company’s foreign bank and financial accounts.

One of the most frequent sources of FBAR noncompliance, however, is with respect to indirect ownership of the foreign account by the owners of a US corporation. For example, if a Nevada corporation owns 100% of a French corporation and a US owner owns 51% of the US corporation, then, the US owner must disclose on his FBAR his financial interest in the French corporation’s foreign accounts. This financial interest is acquired through indirect 51% ownership of the French corporation.

2. Indirect Ownership Through a Partnership

This scenario is very similar to that of corporations. A US person has a financial interest in a foreign account if the owner of record or holder of legal title is a partnership in which the US person owns directly or indirectly: (i) an interest in more than 50 percent of the partnership’s profits (distributive share of partnership income taking into account any special allocation agreement); or (ii) an interest in more than 50 percent of the partnership capital.

3. Indirect Ownership Through a Trust

This is a more complex category which includes two scenarios. First, a US person has a financial interest in a foreign account if the owner of record or holder of legal title is a trust and this US person is the trust grantor who has an ownership interest in the trust under the 26 U.S.C. §§ 671-679.

Second, a US person has a financial interest in a foreign account if the owner of record or holder of legal title is a trust in which the US person has a greater than fifty percent (50%) beneficial interest in the assets or income of the trust for the calendar year. This second scenario is a true FBAR trap for US taxpayers, because while grantors may anticipate their FBAR requirements, beneficiaries are usually completely oblivious to this requirement.

This category of FBAR financial interest definition is even more complicated by the fact that it requires a very nuanced understanding of US property law and FBAR regulations. For example, how many taxpayers can answer this question: if a US person has a remainder interest in a trust that has a foreign financial account, should he disclose this account on his FBAR?

4. Indirect Ownership Through Any Other Entity

This a “catch-all” category of indirect FBAR financial interest definition. If a situation does not fall within any of the aforementioned categories, a US person still has a financial interest in a foreign account if the owner of record or holder of legal title is any other entity in which the US person owns directly or indirectly more than 50% of the voting power, more than 50% of the total value of equity interest or assets, or more than 50% of interest in profits.

FBAR Financial Interest: Constructive Ownership

This is a very dangerous category of FBAR financial interest definition, because, in the event of an unfavorable determination by the IRS, it may have highly unfavorable consequences, including the imposition of FBAR willful penalties and even FBAR criminal penalties. A US person has a financial interest in a foreign account if the owner of record or holder of legal title is a person who acts on behalf of the US person with respect to the account. Various classes of persons fall under this description: agents, nominees and even attorneys.

This category of FBAR financial interest definition targets situations where a US person is trying to hold his money under the name of a third party. It is not easy, however, to determine whether the foreign person is holding this money on behalf of the US person.

The key consideration here is the degree of control that the US person exercises over the account. If the agent can only access the account in accordance with the instructions from the US person, if there is an understanding that the agent holds the account on behalf of the US person and if the agent does not independently distribute funds for his own needs, then the IRS is likely to find that the US person has a financial interest in the account for FBAR purposes.

On the other hand, if the account owner uses the funds for his own purposes and makes gifts to third parties, the situation becomes increasingly unclear. In this case, one has to retain an international tax attorney to analyze all facts and circumstances, including the origin of funds.

Contact Sherayzen Law Office for FBAR Help, Including the Determination of FBAR Financial Interest in a Foreign Account

FBAR is a very dangerous form. FBAR noncompliance penalties are truly draconian. They range from FBAR criminal penalties (of up to ten years in prison) to civil FBAR willful penalties (with 50% of the account or $100,000 (adjusted for inflation) whichever is higher) and even civil FBAR non-willful penalties of up to $10,000 (adjusted for inflation) per account per year. FBAR’s unusual Statute of Limitation of six years also means that the IRS has an unusually long period of time to assess these penalties.

This is why, if you have foreign bank and financial accounts, contact Sherayzen Law Office for professional help. We are a highly-experienced international tax law firm that specialized in US international tax compliance and offshore voluntary disclosures (including for prior FBAR noncompliance). We have helped hundreds of US taxpayers around the world, and We can help You!

FinCEN Form 114 and FBAR Are the Same Form | FBAR Tax Lawyers

January 7, 2019/in FBAR, Legal Notes /by Manager

In my practice, I often receive phone calls from prospective clients who treat FinCEN Form 114 and FBAR as two different forms. Of course, these are the same forms, but I have asked myself: why do so many taxpayers believe that FinCEN Form 114 and FBAR are two different forms?

The simplest answer, of course, would be that taxpayers are simply so unfamiliar with US international tax law that they do not know the form with which both titles, FinCEN Form 114 and FBAR, should be associated. There is definitely a lot of truth to this conclusion, but it does not tell the whole story.

Upon more profound exploration, I found that a significant amount of potential clients believed that either FBAR or FinCEN Form 114 was a tax form while the other form was something else. In other words, some of the taxpayers think that FinCEN Form 114 is a tax form while FBAR is not a tax form while other taxpayers believe that FBAR is a tax form while FinCEN Form 114 is something else.

After making this discovery, I realized that the very nature of FBAR is at the heart of the problem, because FBAR is not a tax form and has nothing to do with Title 26 (i.e. the Internal Revenue Code) of the United States Code. Rather, the Report of Foreign Bank and Financial Accounts, FinCEN Form 114, commonly known as FBAR, was created by the Bank Secrecy Act of 1970. The Bank Secrecy Act forms part of Title 31 of the United States Code. In fact, prior to September 11, 2001, the IRS had almost nothing to do with FBAR.

It was only after the 9/11 terrorist attacks in the United States when the Congress decided to turn over the enforcement of FBAR to the IRS. Initially, the official purpose was to facilitate the Treasury Department’s fight against terrorism. Within a year, though, it became clear that the IRS would use FBAR in its fight against offshore tax evasion and other noncompliance with US international tax laws.

Using the draconian FBAR penalty structure (at that time, the form was still called TD F 90-22.1) against noncompliant US taxpayers turned out to be a highly effective intimidation tool for the IRS – a tool which works very well even today. Once the Treasury Department mandated the e-filing of FBARs, the name of FBAR was changed from TD F 90-22.1 to FinCEN Form 114.

Thus, the confusion over the relationship between FinCEN Form 114 and FBAR stems from FBAR’s peculiar legal history. Most of US taxpayers do not know any of it; they are simply confused by the fact that the IRS is enforcing a form that has two names and which has nothing to do with the Internal Revenue Code.

Adding Children to a Foreign Account and FBAR Issues | IRS FBAR Lawyer

January 2, 2017/0 Comments/in FBAR Lawyers, Legal Notes /by Manager

FBAR problems and parental love – at first, it seems that nothing can be more contradictory. Yet, in reality, parental love may often cause grave US tax problems for children if this love extends to adding children to a foreign account, and especially if this is done without the knowledge of the children. In this article, I would like to explore some of the common patterns of adding children to a foreign account and how this act of parental love may cause grave FBAR problems for the children.

FBAR Background

FinCEN Form 114 (the Report of Foreign Bank and Financial Accounts – commonly known as FBAR) is one of the most important information returns for US taxpayers. Generally, FBAR requires a US person to disclose his financial interest in and signatory authority over foreign bank and financial accounts if these accounts, in the aggregate, exceed $10,000 at any point during a calendar year.

The importance of FBAR is tied to its draconian penalties, which include willful penalties of up to 50% of the account or $100,000 (whichever is greater) per violation; each undisclosed account in each year is a violation. Criminal penalties, including jail time, are also possible.

Common Four Patterns of Adding Children to a Foreign Account

While there are many ways of adding children to a foreign account, we can distinguish the four most common patterns for the purposes of this article. The first pattern of adding children to a foreign account is creation of joint accounts with minor and student children; this usually occurs when the parents and their children still live outside of the United States. Millions of parents create joint accounts with a minor child to help him get a credit history, learn about financial responsibility and exercise control over their children’s expenses. The same pattern often applies to already adult children who begin their college lives.

These accounts often still remain in existence long after the expiration of the original purpose of adding children to a foreign account. Most often, this happens as a matter of fact – just out of habit or indifference to the account. Sometimes, the account starts to play a new role of a conduit of financial transactions between adult children and their parents. Whichever is the reason, these foreign accounts often continue to exist even after the children move to the United States.

The second common pattern of adding children to a foreign account occurs on the opposite end of the spectrum of life for estate planning purposes. Under this pattern, non-resident alien parents add their adult children (who may already be US tax residents) to their foreign accounts to make sure that the children have access to the parents’ accounts in case of an emergency or death. Furthermore, in countries with a difficult court system (India is a prominent example), adding children to a foreign account may assure that these children and no one else inherit the funds.

The third common pattern of adding children to a foreign account occurs as part of business succession planning. Children are granted shares of a foreign corporation and are provided with a signatory authority over the corporate accounts in order to assure smooth transition of business ownership and corporate leadership. This pattern is very close to the previous one, but the difference here is that the process of adding children to a foreign account here is done as an integral part of running a foreign business, whereas the second pattern is concerned mostly with non-business estate planning.

Finally, the fourth common pattern involves a situation where parents (usually operating under a power of attorney provided by their children) engage in various business and real estate transactions under their childrens’ names. The act of adding children to a foreign account merely constitutes one more part of these transactions. Especially in Southeast Asia (most notably, India, South Korea and China), but also in South America, the parents are conducting various transactions under their children’s names often without ever informing their children about these transactions. The parents can even sign and file local tax returns under their children’s names.

How Adding Children to a Foreign Account Can Cause FBAR Problems

Setting aside the issue of income tax compliance complications, adding children to a foreign account may be highly problematic from the FBAR compliance standpoint. The problems usually occur for three reasons.

The first and most common reason is the simple fact that, in many cases, parents never inform their children about the fact that they added them to their foreign accounts. This often occurs because the parents simply do not know that adding children to a foreign account obligates the children to report such a joint account to the IRS. Since the children do not know about their ownership of a foreign account, they cannot report it on the FBAR (assuming that they know about the existence of this form), thereby subjecting themselves to the draconian FBAR noncompliance penalties. This reason can be present in all four patterns described above.

The second reason for FBAR problems is closely tied to the first pattern of adding children to a foreign account. In cases where accounts have been open for a very long time without active usage, children may simply forget about the existence of these accounts or mentally ignore them as a matter of habit of treating these accounts as childhood accounts that should not be taken seriously.

Finally, the third reason is closely tied to the fourth pattern of adding children to a foreign account. In such cases, children often feel that the accounts do not belong to them since the parents opened them in their interests only as part of their own local business transactions. Hence, the children erroneously believe that these accounts are not reportable on their FBARs, exposing themselves to FBAR penalties. Such cases may present additional difficulties to international tax lawyers because of the amount of documentation (local tax returns under the children’s names, all transaction documents in children’s names, deposits remaining on the children’s accounts, et cetera) that may convince the IRS that FBAR noncompliance was willful.

Contact Sherayzen Law Office for Professional Help With Undisclosed Foreign Accounts and Foreign Income

Parents love their children and are prepared to do anything for them. Sometimes, though, parents may unintentionally complicate their children’s lives by adding their children to a foreign account. Failure to report such an account on FBAR may expose the children to draconian civil and criminal FBAR penalties.

In such cases, the help of an experienced international tax law firm is indispensable. Sherayzen Law Office, Ltd. is a highly experienced international tax law firm that specializes in FBAR compliance, including offshore voluntary disclosures. We have helped hundreds of US taxpayers around the globe to bring their US tax affairs into full compliance and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Denver FBAR Lawyer | Foreign Accounts Tax Attorney

August 22, 2016/0 Comments/in FBAR Lawyers, Legal Notes /by Manager

Finding a good Denver FBAR Lawyer is not easy, especially if you do not know what exactly Denver FBAR Lawyer means. In this essay, I will define what lawyers fit into the definition of a Denver FBAR Lawyer and why you should retain the services of my firm, Sherayzen Law Office, Ltd.

Denver FBAR Lawyer Definition: Legal FBAR Services Provided in Denver, Colorado

Some of the readers may be surprised to learn that the definition of a Denver FBAR Lawyer is not limited by the physical presence of the lawyer. Rather, a Denver FBAR Lawyer is any international tax lawyer who offers legal and tax services related to FBARs in Denver, Colorado. This means that your FBAR lawyer can reside in Minneapolis and still be considered as Denver FBAR Lawyer even if he has never been to Denver.

Why is that? The reason is simple: FBAR is federal law, not state law; i.e. the city of Denver and the State of Colorado have absolutely nothing to do with the implementation of FBAR. Since there is no local input, the physical residence of your lawyer gives you no advantage whatsoever when it comes to legal services related to FBARs.

Denver FBAR Lawyer Must Be an International Tax Lawyer

While the physical location of a your FBAR lawyer is irrelevant, his competence in FBARs and the US international tax law is an indispensable quality. It is important to understand that, in the great majority of cases, the FBAR issues are tightly intertwined with other international tax compliance requirements, and it is the interaction between the FBAR and other international tax issues that is relevant to the determination of a taxpayer’s legal position. This is why your Denver FBAR lawyer should be highly knowledgeable in other areas of international tax law in addition to FBARs.

Denver FBAR Lawyer: the Convenience of Communication

Perhaps, while the readers agree that the definition of a Denver FBAR lawyer should include any experienced international tax lawyer who provides FBAR-related services in Denver, they may still point to old belief of the ease of communication with a local lawyer. In essence, this myth holds that while an out-of-state FBAR lawyer may be more competent in international tax law, it is better to rely on a local FBAR lawyer because it would be easier to communicate with him.

This myth is simply incorrect, because it does not take into account the development modern communications technology and it incorrectly represents a client’s communication with their Denver FBAR lawyer.

The modern communications technology has virtually eliminated the entire advantage of retaining a local Denver FBAR Lawyer. Email, telephone, fax and Skype video conferences provide ample opportunities to communicate with your lawyer wherever he is and at any point of time. In fact, as an international tax lawyer, I have continuously relied on these means of communication to successfully represent all of my out-of-state clients, including Denver, Colorado. There has not been a single case where my geographical location was of any importance.

Furthermore, it is important to understand that, aside from the initial consultation (which can also be conducted on Skype or telephone), almost all of your communication with a local Denver FBAR lawyer will be through the same modern means of communication – email and telephone. This means that 98% of communication between you and your lawyer will be done in the same manner irrespective of whether he resides in Denver!

Sherayzen Law Office is a Top Choice for Your Denver FBAR Lawyer

Sherayzen Law Office occupies a leading position in the world on this subject with extensive knowledge and experience concerning all major relevant areas of international tax law including PFIC compliance, Subpart F rules, all types of US international reporting returns, US income tax returns (individual, partnership and corporate) for domestic and foreign persons, et cetera. Furthermore, this is one of the leading international tax law firms in the world with experience in all major IRS voluntary disclosure programs, including 2009 OVDP, 2011 OVDI, 2012 OVDP and 2014 OVDP (now closed).

This is why, if you are looking for a Denver FBAR lawyer, contact Sherayzen Law Office, Ltd. today to schedule Your Confidential Consultation!

Posts

Denver FBAR Attorney | International Tax Lawyer Colorado

Denver FBAR Attorney: International Tax Lawyer

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

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

Contact Sherayzen Law Office for Professional FBAR Help

FBAR Financial Interest Definition | FBAR International Tax Lawyer & Attorney | FinCEN Form 114

FBAR Financial Interest: Legal Relevance and Context

FBAR Financial Interest: Classification of Financial Interest

FBAR Financial Interest: Direct Ownership

FBAR Financial Interest: Indirect Ownership

FBAR Financial Interest: Constructive Ownership

Contact Sherayzen Law Office for FBAR Help, Including the Determination of FBAR Financial Interest in a Foreign Account

FinCEN Form 114 and FBAR Are the Same Form | FBAR Tax Lawyers

Adding Children to a Foreign Account and FBAR Issues | IRS FBAR Lawyer

FBAR Background

Common Four Patterns of Adding Children to a Foreign Account

How Adding Children to a Foreign Account Can Cause FBAR Problems

Contact Sherayzen Law Office for Professional Help With Undisclosed Foreign Accounts and Foreign Income

Denver FBAR Lawyer | Foreign Accounts Tax Attorney

Denver FBAR Lawyer Definition: Legal FBAR Services Provided in Denver, Colorado

Denver FBAR Lawyer Must Be an International Tax Lawyer

Denver FBAR Lawyer: the Convenience of Communication

Sherayzen Law Office is a Top Choice for Your Denver FBAR Lawyer

International Tax Law Websites

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Tag Archive for: FBAR Lawyers Denver

Posts

Denver FBAR Attorney: International Tax Lawyer

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

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

Contact Sherayzen Law Office for Professional FBAR Help

FBAR Financial Interest: Legal Relevance and Context

FBAR Financial Interest: Classification of Financial Interest

FBAR Financial Interest: Direct Ownership

FBAR Financial Interest: Indirect Ownership

FBAR Financial Interest: Constructive Ownership

Contact Sherayzen Law Office for FBAR Help, Including the Determination of FBAR Financial Interest in a Foreign Account

FBAR Background

Common Four Patterns of Adding Children to a Foreign Account

How Adding Children to a Foreign Account Can Cause FBAR Problems

Contact Sherayzen Law Office for Professional Help With Undisclosed Foreign Accounts and Foreign Income

Denver FBAR Lawyer Definition: Legal FBAR Services Provided in Denver, Colorado

Denver FBAR Lawyer Must Be an International Tax Lawyer

Denver FBAR Lawyer: the Convenience of Communication

Sherayzen Law Office is a Top Choice for Your Denver FBAR Lawyer

International Tax Law Websites

Categories

Recent Posts