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Debunking the “Only US Citizens” Myth About US International Income Tax Compliance | FBAR Lawyer

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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.

In this vlog from Alvarado, Mexico, I would like to continue focusing on the theme of debunking various tax myths that exist concerning the tax obligations of US tax persons who reside in Mexico; myths which are absolutely false but widely believed.

One of such myths is one I call the ‘US Citizens Only Myth’. Sometimes it has a variation of ‘US Permanent Residents and US Citizens Only Myth’. The idea behind these myths are very simple and very believable, this is why they are so wide-spread. That even though you may have qualified for under the substantial presence test to become a US tax resident, only US citizens or sometimes only US permanent residents and US citizens have to disclose their worldwide income and foreign assets on their US tax returns. The rest do not; they’re either not US citizens or they’re not US permanent residents or as I said there are variations on this myth.

This is completely false. As long as you are a tax resident, whether you are a tax residency comes from the substantial presence test, the fact that you are a permanent resident or the fact that you are a US citizen; it doesn’t really matter, what the precise source of this belief but as long as you are a US tax resident, you must disclose your worldwide income on your US tax returns and you must disclose your foreign assets to the IRS.

Thank you for watching, until the next time.

Obligation to Report Foreign Account to the IRS is Universal | US International Tax Attorney 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 my series of vlogs from Alvarado, Mexico. In the first part of this series, I’m focusing on debunking various myths that exist concerning US obligations of Mexicans who reside in Mexico and one of the most popular myths is what I call ‘The Big Fish Myth’.

‘The Big Fish Myth’ is basically a belief that only people who are multimillionaires and multibillionaires need to disclose their foreign accounts and foreign income to the IRS. This is completely wrong.

While the extent of your tax reporting obligations may be affected by the amount of assets that you have, if you have assets outside of the United States and if you have income outside of the United States, you must disclose it.

Your worldwide income obligations are not affected by the fact that you have $1,000 of foreign income or you have $1,000,000 of foreign income; you still must report it. Your obligations may change in number and intensity but the basic obligation to disclose foreign assets to the IRS and disclose foreign income on your US tax returns remains unchanged.

Thank you for watching, until the next time.

The Big Fish Myth: Who Really Needs to Report Foreign Accounts | US International Tax Lawyer 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 my series of vlogs from Alvarado, Mexico. In this vlog, I would like to continue working on the same theme of debunking popular US tax myths that prevent US taxpayers from being fully compliant on their US tax returns. In this vlog, I will discuss what I call the ‘Big Fish Myth’.

The Big Fish Myth is basically a belief that only multi billionaires need to disclose their foreign accounts and foreign income to the IRS – that the rest of the people don’t really need to worry about this at all. This is completely wrong. US taxpayers’ obligation to disclose their foreign accounts and foreign income in the United States is not affected by how many millions, billions or how many thousands they may have as long as they meet the threshold filing requirements, they must disclose their foreign assets and foreign income on their US tax returns.

Obviously, if you only have $1,000 in US accounts and foreign accounts, then your obligations are going to be a lot smaller than if you have $1,000,000 in foreign accounts. But your obligation to disclose your foreign assets and particularly foreign financial accounts are not affected by how much money or how many millions you have. As long as you meet the thresholds, you must file the relevant tax forms with your US tax returns.

In the next vlog, I will continue discussing your US tax obligations and debunk various tax myths concerning US tax compliance.

Thank you for watching, until the next time.

Debunking the Separation Myth | US International Tax Lawyer Alvarado 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 my series of vlogs from Alvarado, Mexico and in this vlog I’d like to focus on what I call the separation myth. Basically a belief that if you reside, that you only need to report income in the jurisdiction where it was earned and only in that jurisdiction; that’s why it’s a separation myth. Basically, you separate your income by jurisdiction where it was earned and reported only in that jurisdiction.

This is a very common myth. I receive clients every single month who believe in this myth; actually, I have already lost count of how many people have come to me and said “Oh, you know what? I thought that everything that I had in Mexico is really only relevant to Mexico and everything we have in the United States is only relevant to the United States”. Or “Everything we have in Thailand is only relevant to Thailand and everything in the United States is only relevant to the United States”. “Everything in France is relevant only to France and everything I earn in the United States is only relevant to the United States” and “I’ve always disclosed my US-sourced income on my US tax returns and my foreign income either was not disclosed at all anywhere because it was not required to be so or it was disclosed on local tax returns”.

This myth is completely wrong. If you are a US person; if you are a US tax resident to be more exact, then you must disclose your worldwide income on your US tax returns. It’s not a matter of choice, it’s an obligation and it is absolute.

The only exceptions, and there are few, are contained in some tax treaties, most commonly in the US-France tax treaty. Otherwise, the income must be disclosed on US tax returns if you are a US tax resident.

Be careful and do not fall victim to this myth. In the next vlog, I will continue debunking common myths concerning US tax compliance.

Thank you for watching, until the next time.

Santander Bank Polish PFIC Investments | International Tax Lawyers Chicago Illinois

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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 Chicago, Illinois. Today I would like to discuss a difficult but very interesing subject of PFIC compliance concerning Polish investments. In particular, (I mean) those very popular former WBK bank (now it’s Santander Bank) investments in Polish mutual funds.

These investments are considered to be PFICs for US international tax compliance purposes. PFICs – Passive Foreign Investment Companies have very special and very unfavorable treatment in US international tax law. If you are a US Person who is doing these types of investments, you should be very careful because these investments have to be worth it. Why? PFIC tax compliance could cost you more than a potential gain that you can get from those PFIC investments, especially if we’re talking about small investments. The trouble that they can bring you could be enormous.

Not only are those investments reportable on FBAR and Form 8938 but you also have to consider the fact that you could/would be paying potentially tax at the highest marginal rate in existence on income related to gains from foreign mutual funds.

If you have any of these former WBK bank investments (now Santander bank investments) in Polish mutual funds you should contact me at (952) 500-8159 or email me at: [email protected]

Thank you for watching, until the next time.