International Tax Lawyers Seattle | Foreign Exceptionalism Trap
The Foreign Exceptionalism Trap: This is a belief that certain business transactions or events that occur completely outside of the United States do not have any US Tax Consequences for US Persons involved in these transactions.
This is probably one of the most dangerous traps. One of the most common and one of the most dangerous.
It’s very dangerous because it’s completely false. If a US Person is involved in a transaction, there will be US Tax Consequences no matter where the transaction takes place. I want to repeat that: no matter where a transaction takes place there will be US Tax Consequences.
It might be in the form of tax; it might be in the form of the tax reporting but there will be US Tax Consequences. This trap usually occurs when there is a complete and full reliance on Foreign Accountants and Foreign Tax Advisors in general.
It’s usually associated, obviously with the failure to coordinate this entire transaction with a US International Tax Attorney.
