2023 Form 5471 Deadline in 2024 | International Tax Lawyer & Attorney

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IRS Form 5471 is one of the most important US international information returns. In this brief essay, I will discuss the tax year 2023 Form 5471 deadline in the calendar year 2024.

2023 Form 5471 Deadline: What is Form 5471

Form 5471 is a US international information return. In general, the IRS uses Form 5471 to collect information about certain US persons who are officers, directors, or shareholders in certain foreign corporations. These US persons, in turn, use Form 5471 to satisfy the reporting requirements of the IRC (Internal Revenue Code) §§965, 6038 and 6046 as well as related regulations. In other words, US taxpayers utilize Form 5471 to comply with their reporting obligations concerning their ownership of and transactions with a foreign corporation.

Form 5471, however, is more than just an international information return. It also contains the relevant schedules related to income recognition by US owners of foreign corporations through the operation of anti-deferral tax regimes such as Subpart F rules, 965 tax and GILTI tax.

2023 Form 5471 Deadline: Who Must File It

Determining whether you are required to file a Form 5471 and which schedules you must attach to it may also be very complicated. As a result of the 2017 tax reform, Form 5471 now sports a total of five categories of required filers; two of these categories contain three sub-categories. In other words, the instructions to Form 5471 describe now a total of nine categories of filers!

Once you determine that you fall into one of these categories, you must carefully determine which schedules, statements and attachments you must complete in order to fully comply with your Form 5471 obligations.

I should also note that a separate Form 5471 is required for each applicable foreign corporation. This is the case even if one foreign corporation owns the other; there is no consolidated group filing under Form 5471.

2023 Form 5471 Deadline: Complexity

Form 5471 is incredibly complex. It forces its filers to convert foreign financial statements to US GAAP. It further requires reporting of an astounding range of transactions between a foreign corporation and its US owners as well as the affiliates of US owners. Finally, as it was already mentioned above, US taxpayers use Form 5471 schedules to calculate the income that they must recognize under the various anti-deferral tax regimes.

Thus, completing a Form 5471 may require a significant effort and a lot of time. This is why you need plan well ahead to make sure that you file your Form 5471 timely.

2023 Form 5471 Deadline: Penalties

A failure to timely file an accurate Form 5471 may result in imposition of large IRS penalties. Moreover, since Form 5471 is used to satisfy a variety of tax obligations, different penalties may be imposed under different IRC sections.

For example, a failure to file Form 5471 Schedule M may result in the imposition of a $10,000 penalty pursuant to §6038(a). A failure to file Form 5471 Schedule O is a violation of §6046 and the IRS may assess a separate section 6046 is subject to a $10,000 penalty for each reportable transaction.

2023 Form 5471 Deadline: When to File and Where

All filers (unless they fall under an exception) must attach their Forms 5471 to their income tax returns (if applicable, a partnership return or tax exempt organization return). Both, the income tax return and Form 5471 must be filed by the due date, including extensions, for that return.

In other words, if you are an individual filing Form 1040, your 2023 Form 5471 deadline is April 15, 2024. If you file an extension, the deadline will shift to October 15, 2024.

Contact Sherayzen Law Office for Professional Help With Your 2023 Form 5471 Deadline

If you are required to file a Form 5471 for the tax year 2023, contact Sherayzen Law Office for professional help. We have successfully helped US taxpayers around the world with their Form 5471 compliance, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

2023 FBAR Deadline in 2024 | FinCEN Form 114 International Tax Lawyer & Attorney

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The 2023 FBAR deadline is a critical deadline for US taxpayers this calendar year 2024. What makes FBAR so important are the draconian FBAR penalties which may be imposed on noncompliant taxpayers. Let’s discuss the 2023 FBAR deadline in more detail.

2023 FBAR Deadline: Background Information

The official name of FBAR is FinCEN Form 114, the Report of Foreign Bank and Financial Accounts. US Persons must file FBAR if they have a financial interest in or signatory or any other authority over foreign financial accounts if the highest aggregate value of these accounts is in excess of $10,000. FBARs must be timely e-filed separately from federal tax returns.

Failure to file an FBAR may result in the imposition of heavy FBAR penalties. The FBAR penalties vary from criminal penalties and willful penalties to non-willful penalties. You can find more details about FBAR penalties in this article.

2023 FBAR Deadline: Pre-2016 FBAR Deadline

For the years preceding 2016, US persons needed to file FBARs by June 30 of each year. For example, the 2013 FBAR was due on June 30, 2014. No filing extensions were allowed. The last FBAR that followed the June 30 deadline was the 2015 FBAR; its due date was June 30, 2016. .

2023 FBAR Deadline: Changes to FBAR Deadline Starting with the 2016 FBAR

For many years, the strange FBAR filing rules greatly confused US taxpayers. First of all, it was difficult to learn about the existence of the form. Second, many taxpayers simply missed the unusual FBAR filing deadline.

The US Congress took action in 2015 to alleviate this problem. As it usually happens, it did so when it passed a law that, on its surface, had nothing to do with FBARs. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (the “Act”) changed the FBAR deadline starting with the 2016 FBAR. Section 2006(b)(11) of the Act requires the FBARs to be filed by the due date of that year’s tax return (i.e. usually April 15), not June 30.

Furthermore, the IRS granted to US taxpayers an automatic extension of the FBAR filing deadline to October 15. For now, taxpayers do not need to make any specific requests in order for an extension to be granted.

Thus, starting with the 2016 FBAR, the Act adjusted the FBAR due date to coincide with the federal income tax filing deadlines. This is the case even if federal law requires a different filing date. For example, in situations where the tax return due date falls on a Saturday, Sunday, or legal holiday, the IRS must delay the due date until the next business day; the FBAR deadline will follow suit and also shift to the next business day.

2023 FBAR Deadline

Based on the current law, for the vast majority of filers, the 2023 FBAR deadline will be April 15, 2024. However, the deadline is automatically extended to October 15, 2024.

The 2023 FBAR must be e-filed through the US Financial Crimes Enforcement Network’s (FinCEN) BSA E-filing system.

Contact Sherayzen Law Office for Professional Help With Your FBAR Compliance

If you have unreported foreign accounts, contact Sherayzen Law Office as soon as possible. Sherayzen Law Office is a leader in US international tax compliance and offshore voluntary disclosures. We have successfully helped hundreds of US taxpayers around the globe with their FBAR compliance and FBAR voluntary disclosures; and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

2023 IRS Quarterly Interest Rates on Overpayment/Underpayment of Tax

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The 2023 IRS quarterly interest rates IRS interest rates are relevant for a great variety of purposes. Let’s highlight three of its most important uses. First, these rates will determine the interest a taxpayer will get on any IRS refunds.

Second, the 2023 IRS quarterly interest rates will also be used to establish the interest to be added to any additional US tax liability on amended or audited tax returns. This also applies to the tax returns that were amended under the Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures.

Finally, the 2023 IRS quarterly interest rates will be used to calculate PFIC interest on any relevant §1291 PFIC tax. This PFIC interest will be reported on the relevant Form 8621 and ultimately Form 1040.

We at Sherayzen Law Office constantly deal with the IRS interest rates on overpayments and underpayments of tax. This is why we closely follow any changes in these IRS interest rates, including the 2023 IRS quarterly interest rates.

Below, I lay our the 2023 IRS quarterly interest rates for each quarter.

How the 2023 IRS quarterly Interest Rates Are Calculated

Internal Revenue Code (“IRC”) §6621 establishes the IRS interest rates on overpayments and underpayments of tax. Under §6621(a)(1), the overpayment rate is the sum of the federal short-term rate plus 3 percentage points for individuals and 2 percentage points in cases of a corporation. There is an exception to this rule: with respect to a corporate overpayment of tax exceeding $10,000 for a taxable period of time, the rate is the sum of the federal short-term rate plus one-half of a percentage point.

Under §6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points. Again, there is an exception for a large corporate underpayment: in such cases, §6621(c) requires the underpayment rate to be the sum of the relevant federal short-term rate plus 5 percentage points. The readers should see §6621(c) and §301.6621-3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining the applicable date.

2023 First Quarter IRS Interest Rates

On November 29, 2022, the IRS announced another increase in the IRS interest rates on overpayment and underpayment of tax.

This means that, effective on January 1, 2023 the First Quarter 2023 IRS interest rates are as follows:

seven (7) percent for overpayments (six (6) percent in the case of a corporation);

seven (7) percent for underpayments;

nine (9) percent for large corporate underpayments; and

four and a half (4.5) of a percent for the portion of a corporate underpayment exceeding $10,000.

2023 Second Quarter IRS Interest Rates

On February 13, 2023, the Internal Revenue Service announced that interest rates would remain the same for the calendar quarter beginning April 1, 2023.  In other words, the first quarter and the second quarter IRS interest rates were exactly the same.

2023 Third Quarter IRS Interest Rates

On May 22, 2023, the Internal Revenue Service announced that interest rates would remain the same for the calendar quarter beginning July 1, 2023.  In other words, the IRS interest rates remained the same for the first three quarters of 2023.

2023 Fourth Quarter IRS Interest Rates

On August 25, 2023, the Internal Revenue Service announced that it would increase the interest rates for the calendar quarter beginning October 1, 2023.

  • This means that, the Fourth Quarter 2023 IRS interest rates are as follows:
  • eight (8) percent for overpayments (seven (7) percent in the case of a corporation);
  • eight (8) percent for underpayments;
  • ten (10) percent for large corporate underpayments; and
  • five and a half (5.5) of a percent for the portion of a corporate underpayment exceeding $10,000.

Child FBAR Obligations | FBAR Tax Lawyer & Attorney

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Child FBAR filing obligations is a topic that comes up fairly often in my practice. In this short essay, I will discuss whether a child is required to file an FBAR and how it should be done.

Child FBAR Obligations: What is FBAR

FBAR is a common abbreviation for the Report of Foreign Bank and Financial Accounts, officially called FinCEN Form 114, Report of Foreign Bank and Financial Accounts (used to be TD F 90-22.1). This form is used by US persons to report to the IRS a financial interest in or signatory authority over foreign financial accounts.  This is one of the most important forms that US taxpayers need to file in order to comply with their US international tax law requirements. A failure to file an FBAR when required may result in an imposition of severe IRS penalties.

Child FBAR Obligations: No Age Limitations

All US Persons are potentially subject to the FBAR requirement with no regard for their age. In other words, minor children with foreign accounts that satisfy the FBAR filing threshold must file FBARs. Even a newborn infant may have to file an FBAR. See BSA Electronic Filing Requirements For Report of Foreign Bank and Financial Accounts (FinCEN Form 114), p. 6.

Child FBAR Obligations: How to file a Child’s FBAR

While a child is responsible for the filing of his own FBAR, the child’s parent, guardian or other legally responsible person must file the FBAR for the child if the child is unable to do it himself.  Id. In such cases, the responsible person, parent or guardian must sign the FBAR on behalf of the child as “Parent/Guardian filing for child”.

Contact Sherayzen Law Office for Professional Help with Your Child FBAR Obligations

Parents often overlook their children’s FBAR obligations.  Time and again, I discover that otherwise fully-compliant taxpayers completely neglected their children’s FBARs.

If your child has not filed the required FBARs or he needs help complying with his current FBAR obligations, contact Sherayzen Law Office for professional help.  We are a highly-experienced team of international tax professionals led by an international tax attorney, Mr. Eugene Sherayzen.  We have helped hundreds of people around the world with their FBAR obligations, including offshore voluntary disclosures, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Tax Treaty Election FBAR Obligations | FBAR Lawyer & Attorney

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In my practice, I often receive calls from people who are confused about their FBAR obligations.  A recent call raised an important issue of whether a tax treaty election may affect one’s FBAR obligations.  In this brief article, I would like to address this issue of tax treaty election FBAR obligations.

Tax Treaty Election FBAR Obligations: What is FBAR ?

FinCEN Form 114, Report of Foreign Bank and Financial Accounts (used to be TD F 90-22.1) is commonly known as FBAR, the Report of Foreign Bank and Financial Accounts. This form is used by US persons to report to the IRS a financial interest in or signatory authority over foreign financial accounts.  This is one of the most important forms that US taxpayers need to file in order to comply with their US international tax law requirements. A failure to file an FBAR when required may result in an imposition of severe IRS penalties.

Tax Treaty Election FBAR Obligations: US Person

In another article, I already addressed in great detail the definition of a US Person.  Here, I will just briefly state the categories of persons who fall under the definition of a US Person for FBAR purposes:

(1) US citizens;

(2) residents of the United States;

(3) an entity, such as a corporation, partnership and a limited liability company, created or organized in the United States or under the laws of the United States;

(4) a trust formed under the laws of the United States; and

(5) an estate formed under the laws of the United States.

Tax Treaty Election FBAR Obligations: US Person & Tax Treaty Election

Now, we have come to the critical point and the main subject of this essay: would a tax treaty election to be treated as a resident of another country under a valid income tax treaty affect one’s FBAR obligations? In other words, can you elect out of being a US Person by making a tax treaty election?

The main general answer is no – a tax treaty does not and cannot affect FBAR filing obligations. See Amendment to the Bank Secrecy Act Regulations—Reports of Foreign Financial Accounts, 76 Fed. Reg. 10, 234 & 238 (Feb. 24, 2011); also, IRM 4.26.16.2.1.2(6) (11-06-15).  If a person meets the definition of a resident alien under IRC §7701(b) (i.e. he meets the FBAR definition of a US Person), even if he is not treated as a resident for income tax purposes due to an election under an income tax treaty, he will still be subject to FBAR.

The main exception to this rule would be an abandonment of US permanent residency through a tax treaty election, because it would affect the definition of a resident alien under IRC §7701(b).

Contact Sherayzen Law Office for Help with Your FBAR Compliance and FBAR Voluntary Disclosure

Sherayzen Law Office specializes in FBAR compliance and Offshore Voluntary Disclosures that involve prior FBAR noncompliance. We have helped hundreds of US taxpayers around the world with their FBAR issues, and we can hep you!

Contact Us Today to Schedule Your Confidential Consultation!