international tax lawyers

IRS Limited Practice Exceptions | Tax Lawyer St Paul Minnesota

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Generally, only attorneys, CPAs, enrolled agents and enrolled actuaries can act as taxpayer representatives before the IRS.  However, Circular 230 §10.7 contains several limited exceptions to this general requirement. Let’s explore these IRS limited practice exceptions.

IRS Limited Practice Exceptions: Standard of Conduct

Before we discuss the exceptions, I would like to point out that all non-practitioners who engage in limited practice before the IRS must follow the same standards of conduct as those applicable to practitioners. Circular 230 §10.7(c)(2)(iii).  Moreover, the IRS reserves the right to deny eligibility to engage in limited practice to any individual who has engaged in conduct that may be subject to a sanction under Circular 230 §10.50. See Circular 230 §10.7(c)(2)(ii).

It should be kept in mind that an individual can represent before the IRS not only a taxpayer in the United States, but also any individual or entity who is outside of the United States.

IRS Limited Practice Exceptions: Self-Representation

Obviously, every taxpayer has a basic right to represent himself before the IRS without any enrollment into IRS practice. This right can be found in Circular 230 §10.7(a). Circular 230 §10.7(e) explains that a fiduciary such as a trustee, receiver, guardian, personal representative, administrator, or executor is considered to be the taxpayer, not a representative of a taxpayer.

IRS Limited Practice Exceptions: Relationship-Based Representation

The IRS would permit an individual to represent another taxpayer before the IRS if this individual has some type of a close relationship to the taxpayer (whether the taxpayer is an individual or an entity). Circular 230 §10.7(c)(1) specifically lists the following exceptions:

(i) An individual may represent a member of his or her immediate family.

(ii) A regular full-time employee of an individual employer may represent the employer.

(iii) A general partner or a regular full-time employee of a partnership may represent the partnership.

(iv) A bona fide officer or a regular full-time employee of a corporation (including a parent, subsidiary, or other affiliated corporation), association, or organized group may represent the corporation, association, or organized group.

(v) A regular full-time employee of a trust, receivership, guardianship, or estate may represent the trust, receivership, guardianship, or estate.

(vi) An officer or a regular employee of a governmental unit, agency, or authority may represent the governmental unit, agency, or authority in the course of his or her official duties.

It is important to point out that subclause (iv) does not clash with Form 4764 (Large Case Examination Plan) which allows a corporate taxpayer to designate an employee to discuss tax matters, provide information, discuss adjustments, et cetera.  The reason for it is that the Form 4764 authorization only allows an employee to simply accept materials, deliver materials, provide general explanation. If the employee advocates, negotiates, disputes or does anything else, then he engages in taxpayer representation that requires the filing of Form 2848.

Another important note concerning subclause (iv) is that an employee of a corporation may represent a corporate subsidiary in a tax matter concerning the subsidiary if the parent corporation owns, directly or indirectly, 50% or more of the subsidiary’s voting stock and if the employee’s services are not rendered in a manner that might misrepresent his professional status.

IRS Limited Practice Exceptions: Specific Matter Representation

Circular 230 §10.7(d) allows the IRS to authorize any individual to represent another person without enrollment for a specific matter. Circular 230 does not really describe what are the requirements for such a specific matter representation. Given past practice, however, we can deduce that Circular 230 is most likely referring to persons who are not active tax practitioners but may possess certain competency in tax matters (such an attorney without a license, a retired CPA, a law student representing his clients through a tax clinic in a law school, etc.).

Sherayzen Law Office Is Auhorized to Practice Before the IRS

Mr. Eugene Sherayzen, the owner of Sherayzen Law Office, is an attorney licensed to practice in the State of Minnesota.  Hence, he is authorized to represent taxpayers before the IRS.

Contact Sherayzen Law Office for professional help with all matters concerning US international tax laws.

IRS Sports Industry Campaign: Sport Teams and Owners Targeted

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On January 16, 2024, the IRS Large Business and International division announced a new compliance campaign: the IRS Sports Industry Campaign.  While the announcement is recent and certain details are not yet available, let’s discuss the general direction of this IRS new compliance tax enforcement effort.

IRS Sports Industry Campaign: Background Information

In the mid-2010s, after extensive tax planning, the IRS decided to restructure LB&I in a way that would focus the division on issue-based examinations and compliance campaign processes. The idea was to let LB&I itself decide which compliance issues presented the most risk and required a response in the form of one or multiple treatment streams to achieve compliance objectives. The IRS came to the conclusion that this was the most efficient approach that assured the best use of IRS knowledge and appropriately deployed the right resources to address specific noncompliance issues.

The first thirteen campaigns were announced by LB&I on January 13, 2017. Then, the IRS added eleven campaigns on November 3, 2017, five campaigns on March 13, 2018, six campaigns on May 21, 2018, five campaigns on July 2, 2018, five campaigns on September 10, 2018, five campaigns on October 30, 2018, and so on.  The IRS Sports Industry campaign is the latest one to be announced at the time of this writing.

IRS Sports Industry Campaign: What Does the IRS Say?

The IRS stated that it will conduct its Sports Industry Losses campaign to identify partnerships within the sports industry that report significant tax losses in order to determine whether the income and deductions driving the losses are reported in compliance with the applicable sections of the Internal Revenue Code.

IRS Sports Industry Campaign: Main Target

It is clear from the announcement that the IRS now decided to target sports teams for the losses that they are reporting.  It is indeed true — in the industry renowned for its high profits, the reporting of losses may look suspicious.  

However, when one looks at the fact that it is sports-related partnerships who report much of the losses, it becomes clear that the IRS is really after the beneficial owners of these partnerships.  Who are their owners? Ultra high-net-worth individuals, who are at the center of the IRS newly-funded (by the Inflation Reduction Act) effort to bridge the so-called “tax gap”.

Contact Sherayzen Law Office for Professional Tax Help

If you have been contacted by the IRS as part of this campaign, contact Sherayzen Law Office for professional help. We have helped hundreds of US taxpayers around the world with their US tax compliance issues, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

June 17 Connecticut Deadline Tax Relief | US Tax Lawyer & Attorney

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On January 22, 2024, the Internal Revenue Service announced tax relief for individuals and businesses in parts of Connecticut affected by severe storms, flooding and a potential dam breach that began on January 10, 2024.  These taxpayers now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.

June 17 Connecticut Deadline: Areas Affected by Tax Relief

The IRS is offering relief to any area designated by the Federal Emergency Management Agency (FEMA). Currently, this includes New London County, including the Mohegan Tribal Nation and Mashantucket Pequot Tribal Nation. Individuals and households that reside or have a business in these localities qualify for tax relief.  The same relief will be available to any other Connecticut localities added later to the disaster area. The current list of eligible localities is always available on the disaster relief page on IRS.gov.

The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. These taxpayers do not need to contact the agency to get this relief.

It is possible an affected taxpayer may not have an IRS address of record located in the disaster area, for example, because they moved to the disaster area after filing their return. In these kinds of unique circumstances, the affected taxpayer could receive a late filing or late payment penalty notice from the IRS for the postponement period. The taxpayer should call the number on the notice to have the penalty abated.

June 17 Connecticut Deadline:  Deadlines Affected

The tax relief postpones various tax filing and payment deadlines that occurred from January 10, 2024, through June 17, 2024 (“postponement period”). As a result, affected individuals and businesses will have until June 17, 2024, to file returns and pay any taxes that were originally due during this period.

This means, for example, that the June 17, 2024, deadline will now apply to:

  • Individual income tax returns and payments normally due on April 15, 2024.
  • 2023 contributions to IRAs and health savings accounts for eligible taxpayers.
  • Quarterly estimated income tax payments normally due on January 16 and April 15, 2024.
  • Quarterly payroll and excise tax returns normally due on January 31 and April 30, 2024.
  • Calendar-year partnership and S corporation returns normally due on March 15, 2024.
  • Calendar-year corporation and fiduciary returns and payments normally due on April 15, 2024.
  • Calendar-year tax-exempt organization returns normally due on May 15, 2024.
  • In addition, penalties for failing to make payroll and excise tax deposits due on or after January 10, 2024, and before Jan. 25, 2024, will be abated as long as the deposits are made by January 25, 2024.

The IRS disaster relief page has details on other returns, payments and tax-related actions qualifying for relief during the postponement period.

In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.

June 17 Connecticut Deadline: Additional Tax Relief

Individuals and businesses in a federally declared disaster area who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred or the return for the prior year. Taxpayers have extra time – up to six months after the due date of the taxpayer’s federal income tax return for the disaster year (without regard to any extension of time to file) – to make the election.  Be sure to write the FEMA declaration number – 3604-EM − on any return claiming a loss.

Qualified disaster relief payments are generally excluded from gross income. In general, this means that affected taxpayers can exclude from their gross income amounts received from a government agency for reasonable and necessary personal, family, living or funeral expenses, as well as for the repair or rehabilitation of their home, or for the repair or replacement of its contents.

Sherayzen Law Office continues to monitor the situation concerning IRS tax reliefs for natural disasters and other events.

Plano Foreign Trust Attorney | International Tax Lawyer Texas

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If you live in Plano, Texas, and you are an owner or a beneficiary of a foreign trust, you need to secure the help of a Plano Foreign Trust Attorney to properly comply with US international tax laws.

You should consider retaining Sherayzen Law Office as your Plano Foreign Trust Attorney. Sherayzen Law Office is a leading US international tax firm concerning US tax compliance of US beneficiaries and owners of a foreign trust. Our experience covers US taxpayers with a beneficiary and/or ownership interest in most of the countries that allow for the creation of a trust, including such important jurisdictions as: Australia, the Bahamas, Bermuda, Canada, Cook Islands, India, Japan, Jersey, New Zealand, Saint Kitts and Nevis, the United Kingdom and others. We also have an experience dealing with trusts organized in the United States that are treated as foreign trusts and, vice versa, trusts organized outside of the United States but treated as US trusts.

Plano Foreign Trust Attorney: Foreign Trust Annual US Tax Compliance

Sherayzen Law Office is an experienced US international tax law firm that helps its clients to stay in full compliance with the US international tax reporting requirements concerning foreign trusts, including Forms 3520, 3520-A, 4970, 8938 and FBAR. This applies to both, US beneficiaries and US owners (including US grantors, US trustees and deemed US owners) of a foreign trust.

Plano Foreign Trust Attorney: Foreign Trust Offshore Voluntary Disclosure

Sherayzen Law Office also helps its clients to remedy past noncompliance with respect to reporting of their beneficiary and/or ownership interests in a foreign trust as well as income from a foreign trust.  The primary legal vehicle for remedying such past tax noncompliance is an offshore voluntary disclosure.

Since 2005, Sherayzen Law Office has developed a profound expertise in all forms of offshore voluntary disclosures, including: Streamlined Domestic Offshore Procedures, Streamlined Foreign Offshore Procedures, Delinquent International Information Return Submission Procedures and Reasonable Cause voluntary disclosure (also known as “Noisy Disclosures” or “Statutory Disclosures”).   Due to its unique expertise, our firm is able to handle both, the legal and the accounting sides of an offshore voluntary disclosure; i.e. we prepare all of the legal documents and tax forms for you within one firm.

Plano Foreign Trust Attorney: Foreign Trust Tax Planning

Sherayzen Law Office assists its clients with all aspects of US tax planning concerning foreign trusts.  Foreign trust tax planning can be very complex and involve multiple tax jurisdictions, but it remains one of the most effective tools to ethically and legally reduce your current income tax compliance burden.

Plano Foreign Trust Attorney:  Challenging IRS Classification and IRS Penalties

Sherayzen Law Office represents its clients before the IRS with respect to challenging IRS classification of a foreign trust as well as high IRS penalties imposed for prior tax noncompliance concerning foreign trusts.

Contact Sherayzen Law Office for Professional Help With Your US International Tax Compliance Concerning Your Beneficiary or Ownership Interest in a Foreign Trust

Timing is highly important in cases involving a foreign trust. Hence, if you have a beneficiary or ownership interest in a foreign trust, you contact us in order to maximize the positive impact of our involvement.

We can help You! Contact Us Today to Schedule Your Confidential Consultation!

First Quarter 2024 IRS Interest Rates on Overpayment & Underpayment of Tax

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On November 17, 2023, the IRS announced that the First Quarter 2024 IRS interest rates on overpayment and underpayment of tax will not change from the Fourth Quarter of 2023.

This means that, the First Quarter 2024 IRS interest rates will be 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 overpayment exceeding $10,000.

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.

Pursuant to the IRC §6621(b)(1), the First Quarter 2024 IRS interest rates were computed based on federal short-term rates for October 2023 to take effect on November 1, 2023, based on daily compounding.

It is important to note that the First Quarter 2024 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 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 pursuant to Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures.

Finally, the First Quarter 2024 IRS 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 First Quarter 2024 IRS interest rates.