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Austin TX: The Hotbed of US International Tax Compliance | FBAR & FATCA Austin Texas

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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 in Austin, Texas. In fact, I’m on the famous 6th Street and you can see behind me that there’s the old Driskill Hotel built in 1886.

Since I’m starting out this series of blogs from Austin, I want to say why I came to this city besides meeting with a client here and conducting a consultation here; I came here because I wanted to get to know this great city and as a huge source of clients for my firm. Now, Austin is truly prolific when it comes to clients for my firm. In fact, I would say that it is in the top five cities in the United States. Sometimes, I get more clients from Austin that I get from New York and Boston combined. Why is that? Well, the answer is very simple: there are a lot of immigrants here in Austin that come here from all over the world. They come here from Germany, from Switzerland, from Australia and New Zealand, England, Brazil, Mexico, etc. When these immigrants come to Austin, they usually do not come empty-handed. They still maintain ties to their home countries; they still have assets there, they may be the beneficiary of a foreign trust in New Zealand and they may have received an inheritance in the United Kingdom, they may be running businesses in Mexico. Wherever it is that they have, has US tax reporting consequences here in the United States. Unfortunately, many of them are not aware of these consequences and do not understand them. This is why many of them tend to be non-compliant with US tax reporting requirements and later they will come to me to help them fix it.

In future blogs, I will continue talking about US tax reporting requirements that apply to these immigrants that come to Austin, Texas.

Thank you for watching, until the next time.

FinCEN Form 114 Introduction | FBAR Tax Lawyer & Attorney San Francisco

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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 am in San Francisco, California and today I’m starting a new series of blogs (from San Francisco) and I’d like to start it out traditionally with a discussion of FBARs for residents who reside in San Francisco.

San Francisco is a very interesting city because it is a city where a lot of people want to come to have fun, to work and to invest in real estate. There are other people here from China, France, Italy, Spain, Mexico, Colombia, Germany; basically from all over the world. A lot of these people come here already with a substantial amount of wealth because San Francisco is not a cheap city to live in. This wealth is often distributed among various asset classes, including cash sitting in bank accounts and what these individuals often forget about is that they need to report these foreign bank accounts to the IRS and this is where FBAR comes in: FinCEN Form 114 commonly known as FBAR (foreign bank accounts reporting), full name is report of foreign financial bank accounts. This form is required to be filed by US taxpayers with respect to ownership interest in or signature authority over foreign bank and financial accounts. The non-compliance penalties with respect to this form are steep and can be described as draconian. This is why if you have not reported your foreign bank accounts on FBAR or any other form that I will discuss in future blogs, you can call me at (952) 500-8159 or you can email me at: [email protected]

Thank you for watching, until the next time.

FBAR Voluntary Disclosure for Chinese Structured Products | International Tax Lawyer Portland Oregon

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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 blogs from Portland, Oregon. What I would like to talk about today is a very interesting recent case that I had with respect to a Chinese American who’s lived in the United States for many years – over twenty years and became a US citizen and she had accounts at ICBC, the Industrial and Commercial Bank of China in China. In other words, she’s had those accounts for a long time and she didn’t know about her reporting requirements. No one told her about the fact that she needed to disclose her foreign bank accounts in the United States and she never reported them. Then by accident, she found out about the FBAR requirement and she came to me for help.

The interesting thing about ICBC (and this client in particular) is that she didn’t just have regular bank accounts. What she had were structured products. ICBC issued a number of structured products which are not that easy to track. One of the problems with Chinese banks is that often times, they can give you the current information but if you try to dig into the past information, it’s not that easy to do. On top of that, it’s not easy to track each of these structured products. If a person, say has $300,000 invested in these structured products, she may have anywhere between 15 to 30 structured products at the same time and that is problematic, because keeping track of 30 products is not that easy, especially over a six year period. On top of that, one of the issues that we had is the fact that these structured products – they operate sort of like fixed deposit accounts, except that you can deposit and withdraw money, pretty much at any period of time. Every time you withdraw the money, you actually withdraw the interest as well; so, there’s no penalty for it charged by the bank. There’s no tax levied on it by the Chinese government, at least there was no tax at that point.

We had quite a bit of work to do trying to keep track of everything over a six-year period of time, keeping all the interest and calculations in line, putting everything together for the Streamlined Domestic Offshore Procedures disclosure. In the end, we succeeded and the disclosure went through just fine but it’s something to keep in mind that a lot of people don’t realize that these structured products can be troublesome. They’re very troublesome in Switzerland but they’re also troublesome in China.

Thank you for watching, until the next time.

Offshore Voluntary Disclosure Must Be Timely | International Tax Lawyers Portland Oregon

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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 blogs from Oregon – Portland. Now, you can see a train leaving behind me and this kind of reminds me of an important issue: to make sure that you’re able to do your voluntary disclosure. You have to make sure that you make this train; that is, that you do your voluntary disclosure timely. If you try to do a voluntary disclosure after an IRS agent already started an investigation into your case, then you won’t be able to do a voluntary disclosure; that train has left. What you need to do is to make sure that as soon as you learn about your non-compliance with US tax laws, that you would come to me to discuss your voluntary disclosure options as soon as possible.

Thank you for watching, until the next time.

Streamlined Domestic Offshore Disclosure: Japanese Foreign Inheritance | Form 5471 Lawyer Portland Oregon

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Good morning 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 blogs from Portland, Oregon. As part of that series, I’m doing case reviews related to Asian Americans or Asians who became US tax residents.

Today, I’d like to talk about a case related to Japan. About two years ago, I had a case where a married couple came to me. The husband is a US citizen born in the United States and the wife is a US citizen born in Japan. They came to me because they discovered that a foreign inheritance may have US tax consequences. They read something about it, didn’t understand it; so, they came to me. It turns out that the wife received a foreign inheritance about three years prior to the time they came to me for an initial consultation. As part of that foreign inheritance, she inherited a series of various stocks, bank accounts – savings – checking and real estate properties.

I took this case and we started working on the voluntary disclosure and discovered some new bank accounts; there were other issues that came up but the most interesting thing that I want to talk to you about is what happened sometime toward the end of the consultation. I received some new documents from the client related to one of her foreign accounts and there was another name on this account (I don’t speak Japanese but realized it was not her name). I inquired of the client about it and she said that it was a name of a corporation, so from that we started to investigate further and it turns out that as part of her foreign inheritance, she also inherited a foreign corporation and in reality, the real estate in Japan was owned by that Japanese corporation. Now, after we’d done all of this work with respect to FBAR compliance, Form 8938 compliance, all of a sudden, we had to do work with respect to Form 5471 because this form is used to report US ownership of foreign companies; foreign corporations to be precise. Since this was a controlled foreign corporation, a form 5471 had to be filed for each year. We received the financials from a Japanese lawyer, worked on them, converted them to US GAAP and then completed Forms 5471 and then submitted a voluntary disclosure.

The most important lesson here is that voluntary disclosures almost always contain surprises, even if a client is 100% certain that she found out everything there is to know about her foreign assets; even if she provided a summary of everything. An attorney must always be diligent in his investigation of foreign clients; meaning, you review the documents, minutely review the documents, look at the transactions, see what’s going on there, understand the transactions, understand the logic behind the transactions, understand what may be missing because clients sometimes simply do not know what they need to be looking for and it is the job of an attorney to guide them. Too many times, I have seen where accountants and sometimes even attorneys do not do that. But in reality, it is the job of an attorney to make sure that the voluntary disclosure that is being submitted is the best that can be submitted under the circumstances. In the case of this Japanese inheritance, something like a foreign corporation was so well hidden in the documents, that it was only through extra due diligence that I was able to discover it.

In a next blog, I will discuss another case related to Southeast Asia.

Thank you for watching, until the next time.