FBAR (Report on Foreign Bank and Financial Accounts) is due on June 30, 2010

Pursuant to the Bank Secrecy Act, 31 U.S.C. §5311 et seq., the Department of Treasury (the “DOT”) has established certain recordkeeping and filing requirements for United States persons with financial interests in or signature authority (and other comparable authority) over financial accounts maintained with financial institutions in foreign countries. If the aggregate balances of such foreign accounts exceed $10,000 at any time during the relevant year, FinCEN Form 114 formerly Form TD F 90-22.1 (the FBAR) must be filed with the DOT.

The FBAR must be filed by June 30 of each relevant year, including this year (2010).

Trademark Lawyers Minneapolis: Advantages of Federal Trademark Registration

Obtaining federal registration of a trademark can bestow on the trademark owner (“registrant”) a number of evidentiary and substantive advantages:

1. Federal trademark registration is a prima facie evidence of the validity of a registered mark, the registrant’s ownership of the mark, the continued use since the filing date of the application and the exclusive right to use the mark in commerce (in connection with specified class of goods or services);

2. Federal trademark registration give the registrant nation-wide rights (with certain exceptions);

3. Federal trademark registration provides a constructive notice of the registrant’s claim of ownership of the mark;

4. Federal trademark registration allows the registrant to file the lawsuit for trademark infringement in a federal court;

5. Federal trademark registration entitles the registrant to statutory remedies, including treble damages and criminal penalties in counterfeit cases;

6. Federal trademark registration allows the registrant to obtain “incontestability” (which precludes cancellation of a trademark registration based on prior use or descriptiveness) after five years of continuous use and filing of necessary paperwork with the USPTO (United States Patent and Trademark Office);

7. Federal trademark registration establishes registrant’s rights under the Paris Convention, including priority rights on foreign filings and the right to register abroad based on the U.S. registration;

8. Federal trademark registration provides the registrant with an ability to bar importation of goods which bear infringing trademarks. The registrant will need to deposit a copy of its U.S. trademark registration with the U.S. customs.

Call Now at (612) 790-7024 to discuss your trademark registration with an experienced Minneapolis trademark lawyer!

Understanding Your Contract: Top Seven Questions to Ask Yourself Before Signing a Contract

The standard definition of a contract states that: a contract is a promise or set of promises, for breach of which the law gives a remedy, or the performance of which the law in some way recognizes as a duty. Therefore, an enforceable contract, whatever its type or form, inevitably creates rights and obligations. This is why it is so important to make sure you understand the contract before you sign it. Therefore, ask yourself the following questions before you bind yourself to an agreement with another party:

1. Do I understand exactly the extent, timing, and nature of my contractual obligations?

2. Do I understand exactly the extent, timing, and nature of the other party’s contractual obligations?

3. Do I understand exactly my rights under the contract and when I can enforce them?

4. Do I understand exactly the other party’s contractual rights and when they can enforce them?

5. Am I personally liable (i.e. your personal assets are at risk) for the promises made in the contract?

6. Is the contract enforceable?

7. If the contract is enforceable, where and under which state’s or country’s laws can it be enforced?

There are many more detailed questions that should be asked before you sign a contract. Never, however, sign a contract without at least positively answering these seven questions.

Obviously, it is best if a contract attorney reviews your agreement before you sign it. Sherayzen Law Office has extensive experience in drafting and reviewing a wide variety of U.S. and international contracts, including but not limited to: confidentiality agreements, disclaimers, distributor agreements, sale of goods contracts, personal services contracts, general employment contracts, independent contractor agreements, franchise agreements, manufacturing agreements, non-compete agreements, lease agreements, licensing agreements, operating agreements, partnership agreements, and sale/purchase of business contracts.

Call Now at (612) 790-7024 to discuss your contract with a Minnesota and international contract lawyer.

Reporting Canadian Registered Retirement Savings Plan (RRSP) and Registered Retirement Income Fund (RRIF) Income to the IRS

U.S. citizens and resident aliens (for U.S. tax purposes) who have financial interest in Canadian Registered Retirements Savings Plans RRSPs)and/or Registered Retirement Income Funds (RRIFs) must report their RRSP and RRIF income to the IRS by using Form 8891. The taxpayers (even if resident aliens from Canada) must comply with this reporting requirement even if their earnings from these retirement plans are not considered as taxable income in Canada.

Prior to year 2003, the IRS maintained that RRSPs and RRIFs are foreign trusts and the annuitants and beneficiaries of these plans must annually file Form 3520 with the IRS. See IRS Announcement 2003-25. IRS was authorized to impose heavy penalties for failure to file Form 3520. 26 U.S.C. §6677.

In 2003, however, the IRS adopted a new simplified reporting regime which is still the current law. Under the new rules, U.S. citizens and resident aliens who hold interests in RRSPs and RRIFs only need to file the new Form 8891 in lieu of the burdensome Form 3520 required earlier. See IRS Announcement 2003-75. Moreover, in the new form, the filers are able to make the election under Article XVIII(7) of the U.S.-Canada income tax convention to defer U.S. income taxation of income accrued in the RRSP or RRIF. Id. The filers are still required to maintain supporting documentation relating to information required by Form 8891 (such as Canadian Forms T4RSP, T4RIF, or NR4, and periodic or annual statements issued by the custodian of the RRSP or RRIF). Id. Nevertheless, the new simplified reporting regime substantially reduces the reporting burden of taxpayers who hold interests in RRSPs and RRIFs.

If you have any questions with respect to your RRSP and/or RRIF income, or if you failed to disclose this income during the prior years, CALL Sherayzen Law Office to discuss your case NOW!

Definition of “U.S. person” for FBAR (Report on Foreign Bank and Financial Accounts) Purposes

Since October of 2008, the definition of a “U.S. person” has been going through a turbulent phase of uncertainty with periodic expansions and retractions. The pre-2008 FBAR instructions (dating back to July of 2000 version) defined the “U.S. person” broadly as: “(1) a citizen or resident of the United States, (2) a domestic partnership, (3) a domestic corporation, or (4) a domestic estate or trust.” See IRS Announcement 2010-16.

Two important features of this definition stand out. First, the term “person” is defined to include not only individuals, but also virtually any type of business entity, estate or trust. 31 C.F.R. §103.11(z) Even a single-member LLC, which is generally disregarded for tax purposes, may be classified as a U.S. person because it has a separate juridical existence from its owner. A partnership or a corporation created or organized in the United States is considered to “domestic” under 26 U.S.C. §7701(a)(4). Second, the definition of who should be considered as a U.S. resident is interpreted under 26 U.S.C. §7701. Under 26 U.S.C. §7701(b), an individual is a U.S. resident if he meets any of the three bright-line tests: (1) lawful admission for permanent residence to the United States (“green card”); (2) substantial presence in the U.S.: the sum of the number of days on which such individual was present in the United States during the current year and the 2 preceding calendar years (when multiplied by the applicable multiplier determined under the following table) equals or exceeds 183 days; (3) and first-year election to be treated as a resident under 26 U.S.C. §7701(b)(4). Thus, the definition of a U.S. resident under the tax rules is much broader than the one used in immigration law.

In October of 2008, the IRS revised the FBAR instructions and further expanded the definition of a “U.S. person” by including the persons “in and doing business in the United States.” This revision caused a widespread confusion among tax professionals. The outburst of comments and questions prompted the IRS to issue Announcements 2009-51 and 2010-16, suspending FBAR filing requirement through June of 2010 (i.e. for calendar years 2008 and 2009) for persons who are not U.S. citizens, U.S. residents, and domestic entities. Instead, the tax professionals were referred back to July of 2000 FBAR definition of a “U.S. person.”

In the meantime, in February of 2010, the IRS published new Proposed FBAR regulations under 31 C.F.R. §103. The proposed rules modify the definition of a “U.S. person” as follows: “a citizen or resident of the United States, or an entity, including but not limited to a corporation, partnership, trust or limited liability company, created, organized, or formed under the laws of the United States, any state, the District of Columbia, the Territories, and Insular Possessions of the United States or the Indian Tribes.” 75 Fed. Reg. 8845 (proposed February 23, 2010) (to be codified as 31 C.F.R. 103.24(b)). This definition applies even if an entity elected to be disregarded for tax purposes. Id. The determination of a U.S. resident status is to be done according to 26 U.S.C. §7701(b) and regulations there under, except the meaning of the “United States”(which is to be defined by 31 U.S.C. 103.11(nn)). Id.

Thus, if the proposed regulations will ultimately be codified in their current form, the definition of the “U.S. person” will be slightly broader than that of the July of 2000, but will represent a major regression from October 2008 definition. Nevertheless, based on even existing (July of 2000) definition of the “U.S. person,” the IRS has been able to cast a wide net over U.S. taxpayers, trying to force disclosure of as many foreign financial accounts as possible.