Happy New Year 2017! | International Tax Attorney Minneapolis

Sherayzen Law Office, PLLC wishes a very Happy New Year 2017 to all of our clients and readers of our blog! We wish you great health, happiness and prosperity in this New Year 2017! And, to stay in full compliance with US tax laws!

Twin Cities international tax lawyer

The New Year 2017 is going to be a complicated one when it comes to international tax compliance. Let us focus today on two primary updates.

The first notable novelty of the New Year 2017 is the shift in the FBAR deadline; from now on, the FBAR is going to be due on April 15. At this point, the IRS guidance is that this deadline is set for April 15 irrespective of whether it falls on a Saturday, Sunday or a holiday. Hence, it is important to remember that the 2016 FBAR will be due on April 15, 2017, even though US tax returns will be due on April 18, 2017. Please, look for additional articles on this issue in January of 2017.

Second, for the first time ever, FATCA Form 8938 will apply to domestic corporations, partnerships and trusts that hold specified foreign financial assets if the total value of those assets exceeds $50,000 on the last day of the tax year or $75,000 at any time during the tax year. The IRS has been threatening this expansion of the application of Form 8938 since 2011. Now, in the New Year 2017, US domestic entities will need to comply with these new requirements on their 2016 US tax returns. Sherayzen Law Office will be providing additional updates on this issue throughout this year’s tax season.

There are many New Year 2017 updates made to various forms by the IRS. Some of these updates are fairly specific to certain classes of taxpayers, whereas other updates are more general in nature. Our professional legal and tax team at Sherayzen Law Office closely follows these IRS updates and developments to make sure that we provide our clients with the highest quality of service.

As in prior years, if you are a client of Sherayzen Law Office in this New Year 2017, you can rest assured that your US tax compliance is in good hands and you have an intelligent advocate of your interests on your side.

Hence, enjoy the New Year 2017 celebrations and contact Sherayzen Law Office during this year’s tax season for the high-quality professional legal and tax help!

Latvian Micro-Enterprise Tax Law Update | International Tax Lawyer Cleveland

On December 20, 2016, the Saeima (Latvian Parliament) approved new amendments to Latvian Micro-Enterprise tax law. While the modifications to the law represented a compromise solution, the overall tax rate went up.

History of Latvian Micro-Enterprise Tax Law

The Latvian Micro-Enterprise Tax Law first entered into force on September 1, 2010. It primary purpose was to establish a lower tax rate for very small businesses, which were defined as businesses with turnover not exceeded 100,000 euros per calendar year. If a business qualified as a small business, under the Latvian Micro-Enterprise Tax Law, it would pay only a 9% tax rate. This rate was included in everything – corporate income tax, social tax and personal income tax.

Changes to Latvian Micro-Enterprise Tax Law

The December 20 changes came after an intense dispute over the best approach to the small business tax. In fact, on November 23, 2016, the Saeima first approved amendments to the law that would lower the income tax to a mere 5%, but the small business owners would have been forced to withhold social insurance contributions from each employee.

In the end, the November 23 amendments were discarded. The December 20 version of the law simply increased the micro-enterprise tax rate to 15% and eliminated the November 23 social insurance contribution withholding requirement due to the fact that it would have been excessively burdensome for small businesses.

It is important to point out, however, that the new changes to the Latvian Micro-Enterprise Tax Law carved-out a limited one-year exception for businesses with a turnover of only 7,000 euros per year; these businesses will only pay a 12% tax rate. This reduced tax rate will only be in effect through December 31, 2017

Furthermore, the Saeima also repealed the November 23 amendment that would have terminated the Latvian Micro-Enterprise Tax Law on December 31, 2018. Instead, the Saeima asked the Latvian Cabinet of Ministers to submit the draft new tax law for small businesses.

Latvia Remains One of the Lowest Tax Jurisdictions in the European Union

Even with the recent changes to Latvian Micro-Enterprise Tax Law, Latvia remains a jurisdiction with one of the lowest tax burdens in the European Union. This fact is often not appreciated by the West European tax professionals, often due to their cultural prejudice against doing business in Eastern Europe. This omission in Latvia may be a serious mistake on their part, depending on the client’s situation.

Sherayzen Law Office follows the development of tax laws in Latvia and believes that there are situations where these laws can offer significant advantages to the firm’s clients for tax planning purposes.

Boston Foreign Trust Lawyer | International Tax Attorney

Bostonians who are beneficiaries or owners of a foreign trust face a large number of very complex US tax requirements. Failure to properly identify and comply with these requirements may result in imposition of severe tax penalties. For this reason, these Bostonians need to secure the help of a Boston Foreign Trust Lawyer in order to assure timely and correct compliance with all of the US tax requirements associated with foreign trusts. How does one choose the right Boston Foreign Trust Lawyer? Who is considered to be a Boston Foreign Trust Lawyer? Answering these two questions is the purpose of this article.

Boston Foreign Trust Lawyer Definition: Legal Foreign Trust Services Provided in Boston, Massachusetts

In order to answer a question about who is considered to be a Boston Foreign Trust Lawyer, it is important to first explore the legal origin of the foreign trust laws for which the compliance is required. Since Form 3520, Form 3520-A, Form 8938 and all other related forms are administered by the US Department of Treasury, it becomes clear that Bostonian foreign trust owners and foreign trust beneficiaries are dealing with federal law, not just the local state or city laws.

This means that any international tax lawyer who is licensed to practice in any state of the United States can offer his foreign trust tax services in Massachusetts – i.e. the physical presence in Boston, Massachusetts, is not necessary.

This conclusion clarifies the definition of a Boston Foreign Trust Lawyer. First, the definition includes all of the international tax lawyers who reside in Boston. Second, the definition extends to all US international tax lawyers who offer their tax services with respect to foreign trust compliance who reside outside of Boston or even the State of Massachusetts. This means that your lawyer can physically reside in Minneapolis and still be considered as a Boston Foreign Trust Lawyer.

Boston Foreign Trust Lawyer Must Be an International Tax Lawyer

Throughout the last paragraph, I repeatedly referred to “international tax lawyers”. This is not accidental; on the contrary, it was intentional – a Boston Foreign Trust Lawyer should be an international tax lawyer whose main area of practice is US international tax law and who deeply knows various international tax provisions related to US foreign trust tax compliance.

Where does such a strict competence criteria come from? As it was explained above, US foreign trust compliance is part of a much larger US federal law. However, this is a very specific part of US federal law – US international tax law. We can see now why only an international tax lawyer can be a Boston Foreign Trust Lawyer.

Sherayzen Law Office Can Be Your Boston Foreign Trust Lawyer

Sherayzen Law Office is an international tax law firm that specializes US international tax compliance, including foreign trusts. Its legal team, headed by international tax lawyer Eugene Sherayzen, Esq., has extensive experience concerning all major relevant areas of US international tax law relevant to foreign trust compliance including Form 3520, Form 3520-A, foreign business ownership by a foreign trust, FBAR and FATCA compliance and other relevant requirements.

This is why, if you are looking for a Boston Foreign Trust Lawyer, contact Sherayzen Law Office today to schedule Your Confidential Consultation!

Mistake as Reasonable Cause | Offshore Voluntary Disclosure Lawyer

This article is a continuation of a series of articles on the Reasonable Cause Exception as a defense against various IRS penalties. Today, we will be exploring whether a mistake made by a taxpayer satisfies the ordinary business care and prudence standard and can be considered a reasonable cause.

Mistake Alone Does Not Constitute Reasonable Cause

Generally, the IRS takes the view that a mistake alone is not sufficient to establish a reasonable cause defense to an imposition of an IRS penalty, because it is not considered to be a conduct that would qualify as ordinary business care and prudence – i.e. generally, situations when a taxpayer acted prudently, reasonably and in good faith (taking that degree of care that a reasonably prudent person would exercise) and still could not comply with the relevant tax requirement.  We remind the readers that the ordinary business care and prudence standard is at the heart of the Reasonable Cause Exception.

Mistake Can Help Establish Reasonable Cause

While a taxpayer’s mistake alone is insufficient to establish a reasonable cause, the Internal Revenue Manual (IRM) specifically foresees a possibility that a mistake can help assert a reasonable cause defense. IRM 20.1.1.3.2.2.4 (12-11-2009) specifically states that the Reasonable Cause Exception may be established if mistake with “additional facts and circumstances support the determination that the taxpayer exercised ordinary business care and prudence but nevertheless was unable to comply within the prescribed time”.

In other words, if mistake, in combination with other facts and circumstances, established that a taxpayer’s behavior was consistent with the ordinary business care and prudence standard, the IRS may agree that the tax noncompliance was caused by a reasonable cause.

IRS Factors Supporting Mistake as a Reasonable Cause

IRM 20.1.1.3.2.2.4 (12-11-2009) does not limit the number of factors that will be considered by the IRS in deciding whether there are sufficient facts and circumstances supporting mistake as a reasonable cause. However, it provides five specific factors to which the IRS will pay special attention:

1. When and how the taxpayer became aware of the mistake;

2. The extent to which the taxpayer corrected the error;

3. The relationship between the taxpayer and the subordinate (if the taxpayer delegated the duty);

4. If the taxpayer took timely steps to correct the failure after it was discovered;

5. The supporting documentation.

Contact Sherayzen Law Office for Professional Legal Help with Establishing a Reasonable Cause Exception in Your Case

If the IRS imposed a penalty for your prior tax noncompliance, contact Sherayzen Law Office for the legal help. We will thoroughly review the facts of your case, determine available defense options, including the Reasonable Cause Exception defenses, implement the case strategy with which you feel comfortable, and negotiate the abatement or reduction of your IRS penalties.

Contact Us Today to Schedule Your Confidential Consultation!