Portland Oregon International Tax Lawyer: Streamlined Disclosure of Foreign Inheritance in Thailand
Hello and welcome to Sherayzen Video Blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd.
Today, I’m continuing a series of blogs from Portland, Oregon. As part of the series, I’m discussing the cases that I’ve handled in the past with respect to Asian Americans and Asians who became US tax residents and today I’d like to talk to you about a case from Thailand that I had a few years ago. The essence of this case is foreign inheritance.
A client came to me a few years actually after receiving a sizeable foreign inheritance. As it turns out to be the case, this was not only issue. It appears that before his death, her father actually gifted her a large number of accounts in Thailand, all of them in Thai Bahts. None of these accounts were ever disclosed to the IRS on FBAR or Form 8938. When my client came to me, we could immediately identify several problems: FBAR, Form 8938 and Form 3520. As we started digging deeper into her assets, it turns out that a large amount of her assets were invested in life insurance policies. Now, Thai life insurance policies come in two parts: Simple life insurance policies and Investment life insurance policies.
When we talk about investment-type life insurance policies, we’re talking about PFIC compliance; these are almost always foreign mutual funds that they’re invested into. In addition to all of the forms I have mentioned, we also needed to do tax compliance concerning Form 8621.
The case was not an easy one but thankfully everything went well; we’ve done our due diligence; we’ve discovered all of the accounts, identified all of the compliance issues, we’ve completed the Streamlined Domestic Offshore Procedures disclosure and the IRS accepted it. There was no follow-up audit with respect to this voluntary disclosure.
This is a good example of how complex foreign inheritance compliance can be. It’s not only about the assets that you inherit, it’s also (about) the assets you had before that. It’s understanding the history of the foreign inheritance; it’s understanding the relationship in the family. It’s being diligent and getting through all of the facts in the case: analyzing the primary documents, bank statements etcetera.
I’ve handled hundreds of voluntary disclosures and I can tell you that every one of these has it’s certain individual face: meaning it has its own characteristics which are unlike any other case. Now, some of the cases, of course can be very similar but there’s always something in that particular case that will differ this case from another.
In the next blog, I will continue talking about my experience with respect to doing voluntary disclosures for Asian Americans and Asians who became US tax residents.
Thank you for watching, until the next time.
