Taiwanese Bank Accounts & Corporation Voluntary Disclosure Case | FBAR 5471 International Tax Lawyer
Hello and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd.
Today, I’d like to talk to you about a case that I completed about a year and a half ago with respect to a Taiwanese corporation. The case initially, came to me as a couple, an American who married a Tawainese woman, who have lived in the United States for awhile and she eventually became a permanent resident of the United States (still not a Citizen of the United States) and she had foreign bank accounts about which she had no idea because she gave her mother the Power of Attorney to open up bank accounts in her name.
This is very common in Southeast Asia where parents take liberties with their children’s finances and often times, they would open up bank accounts without their knowledge. Eventually on one of the trips to Taiwan, she found out from her mother that there were bank accounts that she needed to account for. She started researching what she needed to do with respect to those accounts in the United States and eventually found out about FBAR and the foreign income reporting, Form 8938 reporting, etc. etc. After that, she came to me to fix the problem.
While we were doing this voluntary disclosure, we discovered through a series of indirect hints that something else was going on there. Eventually, it turned out that her father assigned 50% of a Taiwanese corporation to her, also without her knowledge. Now in addition to FBAR, Form 8938 and foreign income reporting, and actually also PFIC reporting; she also needed to file a Form 5471 and she also needed to account for her Taiwanese corporation on Form 8938 because she is a minority owner; it’s not a controlled foreign corporation, so the Form 5471 was not required in some of the years; it was only required in the first year.
Eventually we completed the voluntary disclosure and it went through just fine but this is an important lesson to learn, that in a voluntary disclosure, you never know what kind of surprises may come in, even something as unexpected as ownership of a foreign company.
In the next blog, I will continue review of a series of cases that I’ve done for Asian Americans and Asians who became US Tax Residents.
Thank you for watching, until the next time.
