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Who Benefits from IRS Offshore Voluntary Disclosure | International Tax Lawyer Minneapolis Minnesota

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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’m continuing my series of vlogs from Minneapolis, Minnesota. As I had said in previous videos from this series, this series is devoted to Offshore Voluntary Disclosures.

In the previous vlog, I explained what is an offshore voluntary disclosure; today I would like to talk about who is affected or who can take advantage of an offshore voluntary disclosure program.

In order to participate in an offshore voluntary disclosure, you have to be in violation of one or more US International tax reporting requirements and that applies equally to individuals and to businesses. It’s very important to understand that an offshore voluntary disclosure is not limited to individuals; a business can participate in an offshore voluntary disclosure program.

Unfortunately, it happens too often that an offshore voluntary disclosure can involve a situation where an accountant of a business, a CPA even did not realize that there were additional US international tax reporting requirements and because of that, the business became noncompliant. It is okay for the business, in this situation to participate in an offshore voluntary disclosure program, but how does one know that one needed to file something to be compliant with his/her or its (in the case of a company) international tax obligations?

In order to do that, there is no alternative but to schedule a consultation with an international tax attorney, someone like me, or me.

One of the purposes of a consultation is precisely to do that: identify your US international tax reporting requirements. Many times I found that clients do not really know what they’re required to do or they may only know of one form but don’t know of another form. For example: fairly recently, I did a voluntary disclosure in a case where the client discovered that she was required to file a form 3520 for the year 2023 but she didn’t know that she needed to file FBAR and form 8938. This is a bit of a surprising case because usually it’s the other way around; people know about FBAR but they don’t know about form 3520. In this case, it was a particular case where the client was able to discover 3520 but not the FBAR. During the consultation, I was able to identify these additional reporting requirements and use them to build a voluntary disclosure strategy for her case which we have successfully completed in early 2025.

If you would like to know more about your US international tax obligations and your offshore voluntary disclosure options to fix your prior international tax noncompliance, you can call me at (952) 500-8159 or you can email me at: [email protected]

Thank you for watching, until the next time.

IRS Offshore Voluntary Disclosure: New Series | International Tax Lawyer Minnesota

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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’m starting a new series of vlogs from my home state of Minnesota. Right now I’m standing in the sculpture garden in front of the Walker Art Center in Minneapolis. Part of this series is going to be filmed in Minneapolis and part of it is going to be filmed in St. Paul, in other words the Twin Cities and the subject of the series of vlogs is going to be: Offshore Voluntary Disclosures.

What is it? How many voluntary disclosures are there? Who is affected? What are its requirements? What are the potential IRS penalties? And other similar questions. All of these questions, I will address in this new series of vlogs.

I want to remind the viewers that offshore voluntary disclosures is the core area of practice of Sherayzen Law Office. We have done hundreds of these types of disclosures involving assets from over eighty countries. Assets that include bank accounts, life insurance policies, investment accounts, precious metal accounts, foreign trusts, foreign business ownership including corporations, partnerships and disregarded entities. We have filed thousands of FBARs, forms 8938, 8621, 8865, 5471, 8858, 926 etcetera. In other words, we have an extensive experience in this area and I would like to share some of the wisdom I have acquired throughout the years of almost being twenty years as an international tax attorney with you.

Stay tuned for future vlogs. In the next vlog, I will address the issue of ‘What is an Offshore Voluntary Disclosure?’

Thank you for watching, until the next time.

US International Tax Attorney Veracruz Mexico: New “Port” Series Begins

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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’m beginning a new series of vlogs from Veracruz, Mexico and I’m standing here in the port of Veracruz and thinking about the similarities between a port and taxation. At first you would think: ‘What are the similiarities’? A port is where the ships enter and taxation is usually done at an office but if you take a closer look, you will see there are some striking similarities, especially relevant to my area of practice: US International tax law.

First of all, a port means international commerce. A port is crucial to international commerce, so is international taxation. International tax is also a very important factor in international commerce, maybe from a very different angle but still a very important factor.

Second, a port means basically an open door, an open door to anyone who wants to come in and anyone who wants to get out; similarly, a voluntary disclosure is an open door. It’s an open door to anyone who has not been compliant with their US international tax obligations and wants to resolve their prior tax noncompliance.

In this series of vlogs, there will be two parts: the first part is that I will do an overview of major US international tax reporting requirements which are most common in causing noncompliance. In the second part, I will talk about the open door: the IRS voluntary disclosure programs that the IRS has put into place and which are currently still open and I’m right now filming in December of 2024.

In the next vlog, I will begin the discussion of the main US tax reporting requirements.

Thank you for watching, until the next time.

Introduction to PFIC Compliance | Form 8621 International Tax Lawyer Veracruz Mexico

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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’m continuing a series of vlogs from Veracruz, Mexico. This series of vlogs is devoted to two things: first the discussion of the most common US international tax forms which are most likely to cause non-compliance among US taxpayers and the second part is devoted to IRS Offshore Voluntary Disclosure options.

Right now we’re in the first part and in this first part and in this first part, I had already discussed the issue of FBAR and Form 8938 compliance.

In this vlog, I would like to focus on PFIC compliance or Form 8621 compliance. This is a very complex issue and it is a very obscure issue. In fact, it is so obscure that in most cases accountants would not be able to identify it; they simply do not know about it or even if they heard something about it, they don’t know how to comply with it.

Let’s discuss what a PFIC is. First of all, a little bit of history: PFIC was part of the tax reform of the late 1980s under Ronald Reagan and it is effective all the way back to 1987, technically even further.

There are two legal tests for determination of PFICs: an asset test and an income test. First of all, it is important to state that a PFIC is a corporation; it is a foreign corporation that satisfies one of the two tests that I just mentioned. The asset test is basically whether the corporation has 50% or more of assets as passive assets. If more than 50% of the assets are passive assets then you have a PFIC. The second one is if the foreign corporation has 75% or more of it’s income as passive income, it is a PFIC. Some companies satisfy both tests; some companies satisfy either test and others do the satisfy either test. Just based on this definition, you can see one of the most common categories are foreign corporations that will fall into the category of PFICs are foreign mutual funds. They are meant to hold various parts of foreign corporations and most of their income would be in the form of dividends, interest or capital gains. As such, foreign mutual funds are the most common problem for US taxpayers.

Form 8621 on which the PFICs are reported, in of itself, is a four page form but it is being expanded and undergoing revisions, so it depends in what year you are watching this video. With respect as to which year in having to comply with this form.

PFICs calculations are very complex and there’s not just one PFIC regime, there are various PFIC regimes and each PFIC regime has it’s own complexities; in some situations, they are simply impossible to have elected. In another situation, you just have to go with the default option and face the consequences and the consequences are heavy; you are being taxed at the highest marginal tax in existence with an interest charge on top of that.

Irrespective of your actual tax bracket, that’s the problem with the default methodology. I will not discuss the PFIC regimes in detail here; I just want to mention it as one of the most common ones to produce compliance with respect to US taxpayers and I want you to know the countries where this is especially likely. They are Spain, England, Germany and France. Basically all of main Western European countries, also Australia, New Zealand and one of the biggest ones – India and you’d be surprised to learn, also Mexico. The reason for it is that often-times Mexican banks will offer investments to US taxpayers who come to Mexico to open up a bank account and they say ‘why don’t you open another account like this?’ without realizing that they are getting them into trouble with US international tax law.

If you would like to learn more about your PFIC compliance, you can call me at (952) 500-8159 or you can email me at: [email protected]

Thank you for watching, until the next time.

Worldwide Income Taxation for US Persons in Mexico | US International Tax Lawyer Alvarado Veracruz

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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.

I’m continuing a series of vlogs from Alvarado, Mexico. In the first half of the series, I have focused on debunking various myths concerning US taxation for US persons who reside outside of the United States and in particular, in line with the general theme of this series of vlogs: Mexicans who acquired US tax status and continued to reside in Mexico.

Now that we’ve discussed where the wrong beliefs about US tax obligations of these persons, it is time now to turn our attention toward the actual, correct reporting obligations of US persons who reside in Mexico and we will begin with the most basic of them: worldwide income tax reporting.

A US person who resides in Mexico, and when I say a US person, I include Mexicans who acquired either US permanent residency or US citizenship and continue to reside in Mexico, for most of the year, at least. These persons must disclose their worldwide income on their US tax returns. Not just US-sourced income but worldwide income on their US tax returns. This is an absolute requirement and all US persons who reside in Mexico must comply with it.

This means reporting US-sourced income, Mexican-sourced income and any other income from whatever source or whatever country, it must be disclosed on US tax returns.

In the next vlog, I will continue discussing US tax obligations of Mexicans who acquired US status and continue to reside in Mexico.

Thank you for watching, until the next time.