International tax lawyer, FBAR lawyer, FATCA lawyer, FBAR tax lawyer, international tax attorney, international tax lawyers, international tax attorney Minneapolis, international tax attorney New York, international tax lawyer Minnesota

Streamlined Foreign Offshore Procedure | International Tax Lawyer & Attorney

/in /by

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 Austin, TX. I’m standing in front of the IRS campus that processes Offshore Voluntary Disclosures. What I would like to do is to focus on Offshore Voluntary Disclosures in this vlog; in particular, a very important and probably the best voluntary disclosure option that exists right now: Streamlined Foreign Offshore Procedures or SFOP, not to be confused with Streamlined Domestic Offshore Procedures (SDOP). These are two very different options.

Generally speaking, SFOP is better than SDOP as long as you can satisfy the eligibility requirements. What are the eligibility requirements?

We’ll highlight the three most important ones:

First, you have to satisfy strict a foreign residency requirement.

Second, you have to be able to certify under the penalty of perjury that you were non-willful with respect to your prior noncompliance with US International tax laws and you have to be able to certify it with respect to both foreign income that was not disclosed on the original US tax returns and US International information returns, each US International information return that applies to your case. If you have to file FBARs, then with respect to FBARs, if it is concerning Form 8938, then you have to certify it with respect to Form 8938. If it is concerning Form 5471, then you have to be able to certify your non-willfulness with respect to Form 5471.

Finally, the third requirement: your foreign income should be from a legal source. This requirement applies to both SDOP and SFOP and it is important to understand that it has to be a legal source from the federal point of view; not from the state point of view.

Let me give you an example: certain drugs which are legal under state law may not be legal under federal law. If some of your income is derived from the sales of those drugs, because they are legal in a certain state, or maybe the sales occurred overseas or you used a foreign subsidiary in order to make this income. It would be considered foreign-source income; so, if that income is legal even under foreign law, there’s a lot more stuff which is legal in some of the Central American countries that would not be legal here in the United States. That income would be considered illegal under federal law and so you cannot make a voluntary disclosure. You really have to think from the US federal tax perspective when it comes to determination of whether you can do a voluntary disclosure or you cannot do a voluntary disclosure.

The benefits of the Streamlined Foreign Offshore Procedures are tremendous; it is definitely the best option for US taxpayers for both income tax noncompliance and noncompliance with US International information returns. For example, if you have an FBAR noncompliance and you have income associated with the unreported accounts, Streamlined Foreign Offshore Procedures is the best way. There are no penalties; it is the closest approximation to a true amnesty program that the IRS has ever offered. You just have to pay the extra tax with interest; that’s it. There are no penalties imposed on the level of the US International information returns and there are no penalties imposed for income tax noncompliance. It’s a really great option. You only have to amend three years of tax returns, you don’t have to go back farther. You can actually file late returns under the Streamlined Foreign Offshore Procedures, something that is a big no-no under the Streamlined Domestic Offshore Procedures.

You can resolve your entire US International tax noncompliance in a very easy penalty-free way. It is a great option, but you need to consult with an attorney to make sure that you can certify under the penalty of perjury that you were non-willful. Usually, this type of certification involves a long explanation that would be attached to Form 14653 which is the certification form and that explanation should be drafted by an attorney.

If you would like to learn more about Streamlined Foreign Offshore Procedures, you can call me at (952) 500-8159 or you can email me at: [email protected]

Thank you for watching, until the next time.

Moving Outside of the US: Main Tax Considerations | International Tax Lawyer & Attorney

/in /by

Good morning and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, I am welcoming you from Santa Monica, California. Yesterday, I had a very interesting conversation and that conversation, gave me an idea of a whole series of vlogs about steps you should be taking if you are thinking about moving to live outside of the United States. When you leave the United States, you need to take into consideration three very important topics:

First: the loss of a new host nation; what will be your new compliance requirements?

Second: you need to take steps to end your current state tax residency; for example if you live in California, you are a tax resident of California. So what are the steps you should be taking to end it? It’s very important because you may find yourself in a very strange situation where your state will still tax your worldwide income even though you don’t live in that state.

Finally, and most importantly, you need to understand the US international tax requirements that will apply to you once you move outside of the United States.

These are the topics I will be exploring in the coming days.

Thank you for watching, until the next time.

US Tax Residency & Living Outside the US | International Tax Lawyer & Attorney Santa Monica CA Blog

/in /by

Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, I am continuing my series of vlogs from Santa Monica, California. If you recall, in a previous vlog, I raise the issue of US citizens moving to live outside of the United States. It seems like a good topic to pick, while in California. I’ve raised three main issues that should be considered by anyone who’s leaving the United States.

  1. Local tax compliance
  2. Ending state tax residency
  3. US international tax compliance

I addressed the first two issues in previous vlogs and today I’d like to begin addressing the third one. We’ll start with the income tax considerations. When you move outside of the United States, as long as you are a US citizen, you are considered to be a tax resident of the United States no matter to which country you move. Even if you move to North Korea, you still will be a tax resident of the United States.

What does it mean for you? It means that you have the obligation to continue to file US tax returns and to report your worldwide income on the tax returns.

We will continue discussing this topic in more detail in the follow-up vlogs.

Thank you for watching, until the next time.

Knowledge of FBAR Existence & Willfulness | FBAR Lawyer Beverly Hills Los Angeles California

/in /by

Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

Today, we are continuing our series of vlogs from Beverly Hills, California and today I’d like to talk to you about FBAR compliance and particular where an obligation to file an FBAR was known to the taxpayer but the taxpayer has not acted on it. Is the taxpayer’s inaction in and of itself sufficient to automatically prove early non-compliance was willful and the answer is no, automatically no. We have to look at all facts and circumstances but is this a negative fact? Absolutely. The passage of time between the time when the taxpayer learned about the existence of FBAR and when he took action is a very important consideration, not only for the reasonable cause purposes, but also for non-willfulness purposes.

If you would like to learn more about FBAR compliance, in particular the issue of willfulness vs. non-willfulness, in the context of FBAR non-compliance, call me at (952) 500-8159 or you can email me at: [email protected]

Thank you very much and until the next time.

Worldwide Income Reporting while living outside the US | International Tax Lawyer

/in /by

Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I am an international tax attorney and owner of Sherayzen Law Office, Ltd.

We are continuing a series of blogs from Santa Monica, California. Today, I’m standing on the beach in front of the Pacific ocean and I’d like to talk to you about a topic I raised last time. Where I said if you decide to move outside of the United States, you continue to be a tax resident of the United States and you have to report your worldwide income on your US tax returns.

Today, I’d like to answer a few questions that often arise in the context of that statement. First of all: Does the worldwide income requirement mean that all of your income have to be disclosed or only elective income or passive income? The answer to that question is ALL income has to be disclosed; all foreign and domestic. It doesn’t matter if it’s subject to local taxation. It doesn’t matter whether it’s non-taxable in the local country. Here, you have to operate as a US tax resident by US tax rules, so all of your worldwide income is reportable on your US tax returns.

Does that mean that you won’t be able to take advantage of the fact that you are taxed locally? Does it mean that you will be suject to double taxation? Not necessarily. The United States has plenty of tax treaties around the world with many countries, the vast majority of countries and you should be able to take a foreign tax credit to minimize your US tax liability, though it may not be dollar for dollar, there may be complications which is an issue to be discussed in the context of specific facts but you’re likely not to be subject to full double taxation. There should be a way for you to plan out your tax affairs and a way to minimize your US tax exposure. We’ll continue exploring this subject of US international tax reporting requirements in the following blogs.

Thank you for watching, until the next time.