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Happy New Year 2024 From International Tax Law Firm Sherayzen Law Office!!!

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Dear clients, followers, readers and colleagues:

Mr. Eugene Sherayzen, an international tax attorney, and the entire international tax team of Sherayzen Law Office, Ltd. wishes you a very Happy New Year 2024!!!

Dear clients and prospective clients, in the New Year 2024, you can continue to rely on Sherayzen Law Office for:

  1. Resolution of your prior FBAR, FATCA and other US international tax noncompliance through offshore voluntary disclosure, including Streamlined Domestic Offshore Procedures (SDOP), Streamlined Foreign Offshore Procedures (SFOP), Delinquent FBAR Submission Procedures, Delinquent International Information Return Submission Procedures, IRS Voluntary Disclosure Practice and Reasonable Cause Disclosures;
  2. Help with your IRS audits and examination, including audits of: your prior SDOP and SFOP submissions (as well as other voluntary disclosure options) and your annual international tax compliance. We can also help you fight the imposition of IRS penalties for prior international tax noncompliance, including FBAR penalties, Form 8938 penalties, Form 3520 and 3520-A penalties, Form 5471 penalties, Form 5472 penalties, Form 8865 penalties, Form 926 penalties, et cetera;
  3. Preparation of your annual US international tax compliance, including the reporting of foreign income and preparation of FBAR, FATCA Form 8938 and other US international tax compliance forms such as: Forms 3520, 3520-A, 5471, 8621, 8865, 8938 and 926 and
  4. Your international tax planning (inbound and outbound), including individual and business tax planning, We intend to continue to help US firms with conducting business overseas, US owners of foreign businesses and foreign businesses who wish to expand their presence to the United States (including real estate investors).

In resolving all of your current US international tax issues, we will continue to employ ethical creativity, diligence, professionalism and many years of experience with helping other clients. We will also continue to utilize an individual, customized approach, understanding each client’s particular situation.

In 2024, the US international tax compliance requirements will likely grow even more complex, detailed and extensive. The IRS will continue to demand more and more information from US taxpayers, employing its expanding number of revenue agents to enforce US tax laws across the globe and especially in the United States.

In order to deal with this ever-increasing US tax compliance burden, you will need the professional help of Sherayzen Law Office. In this New Year 2024, we can help you!

Your professional US international tax help is but a phone call away from you! Contact us today to schedule a confidential consultation in this New Year 2024!

HAPPY NEW YEAR 2024 EVERYONE!!!

November 21 2019 BSU Seminar in Minsk, Belarus | International Tax News

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On November 21, 2019, Mr. Eugene Sherayzen, an international tax attorney and founder of Sherayzen Law Office, Ltd., conducted a seminar at the Belarusian State University Law School (the “2019 BSU Seminar”) in Minsk, Belarus. Let’s explore the 2019 BSU Seminar in more detail.

2019 BSU Seminar

2019 BSU Seminar: Topic and Attendance

The topic of the seminar was “Unique Aspects of the US International Tax System”. The seminar was well-attended (more than 80 attendees) by the students of the Belarusian State University (“BSU”), BSU law school faculty and attorneys from the Minsk City Bar Association.

The seminar with the follow-up Q&A session lasted close to two and a half hours.

2019 BSU Seminar Part I: Mr. Sherayzen Biography As Illustration of a Successful Career of an International Tax Attorney

The first part of the seminar was devoted to the discussion of Mr. Sherayzen’s legal career. He commenced by describing his educational path: a bachelor’s degree in Political Science, History and Global Studies with Summa Cum Laude honors and a Juris Doctor degree in Law with Cum Laude honors from the University of Minnesota Law School. Then, Mr. Sherayzen discussed how he acquired the passion for US international tax law, founded Sherayzen Law Office at the end of the year 2005 and developed his career as a successful international tax attorney.

At that point, Mr. Sherayzen described his main specialties in US international tax law: (1) offshore voluntary disclosure of foreign assets and foreign income; (2) IRS international tax audits; (3) US tax compliance concerning foreign gifts and foreign inheritance; (4) US tax compliance concerning US information returns, including FBAR and FATCA compliance; and (5) US international tax planning.

2019 BSU Seminar Part II: Discussion of Eight Unique Characteristics of the US International Tax Law

The second pat of the seminar was devoted to the long discussion of eight main unique characteristics of US international tax law. Mr. Sherayzen commenced this part with the concept of “Voluntary Compliance” and its significance for a taxpayer’s personal liability for the accuracy of his IRS submissions. Then, the attorney discussed the enormous complexity and extremely invasive nature of US international tax law. Mr. Sherayzen also separately emphasized the potentially huge penalty exposure as the fourth characteristic of the US international tax law, specifically referring to FBAR penalties.

The attorney continued the discussion with the description of the worldwide reach of the US tax jurisdiction. Here, he used the Foreign Account Tax Compliance Act (“FATCA”) as an example.

Then, Mr. Sherayzen described the obscurity that surrounds many US international tax provisions and explained how such obscurity presents problems and opportunities for US taxpayers. The attorney concluded the second part of the 2019 BSU seminar with the discussion of the flexibility of US international tax system and how the US tax system should be considered a source of endless opportunities to knowledgeable US international tax attorneys and their clients.

2019 BSU Seminar Part III: Basic Unique Principles of US International Tax System

The next part of the seminar focused on the basic principles of the US international tax system. Mr. Sherayzen organized this part from the perspective of how US taxpayers should declare their foreign assets and taxable income. The structure of this part was based on answering three questions: “who”, “what” and “when”.

The first question was: who should declare their foreign assets and pay taxes on their income? In this context, Mr. Sherayzen defined the concept of “US tax residency”. He further emphasized that non-resident aliens who are not US tax residents may still need to file non-resident US tax returns with the IRS.

The next question was: what income is subject to US taxation and what assets should be declared to the IRS? Here, Mr. Sherayzen describes the most fundamental principle of US international tax law that applies to US tax residents – the worldwide income taxation requirement. He also emphasized that US tax residents must declare on their US international information returns virtually all classes of their foreign assets with the exception of directly-owned real estate.

Then, as part of his discussion of US tax responsibilities of non-residents (for tax purposes), the attorney introduced the “source of income” rules used to characterize income as US-source income or foreign-source income. He provided the audience with the basic rules concerning sourcing of bank interest, dividends, earned income, rental income and royalties.

The final question was: when should the tax be paid on income? In this context, Mr. Sherayzen explained the concept of “realized income” and the general principle that income becomes taxable when it is realized for US tax purposes. He also described the anti-deferral regimes and the Section 250 full participation exemption as exceptions to the general principle of income recognition.

2019 BSU Seminar Part IV: International Information Returns and Conclusion

During the final part of the seminar, Mr. Sherayzen briefly discussed the most important US international information returns. He concluded his lecture by re-stating that US international tax provisions reflect the reality of US position in the world economy and other countries should understand this basic fact before they attempt to copy any US international tax provisions.

FFI FATCA Requirements: Introduction | FATCA Tax Lawyer & Attorney

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Since July 1, 2014, the Foreign Account Tax Compliance Act (“FATCA”) has imposed a heavy compliance burden on Foreign Financial Institutions (“FFIs”). Many of these FFIs have struggled with developing a good understanding of their new FATCA requirements even to this day. In this brief essay, I want to provide a general overview of these FFI FATCA requirements so that readers can begin to develop an understanding of FATCA.

FFI FATCA Requirements: Background Information

FATCA was enacted into law in 2010. The most important idea behind the new law was to combat US tax noncompliance of US taxpayers with foreign financial assets.

There are several important parts of FATCA, but the most important one of them was forcing FFIs to identify US owners of foreign financial assets, collect certain information about them and share it with the IRS. Failure to do so meant facing a FATCA penalty in the form of a 30% withholding tax on the gross amount of all transactions with a noncompliant FFI. In essence, FATCA turned FFIs around the world into free IRS informants.

FFI FATCA Requirements: Three Categories

What precisely does FATCA require FFIs to do in order to be FATCA-compliant? If we look broadly at the FFI FATCA requirements, we can group all of these requirements into three broad categories. Each of these categories consists of a myriad of smaller but still fairly complex FATCA compliance requirements and requires a deep understanding of new FATCA terms.

The first and most important category of FATCA requirements is to collect the required due diligence information concerning all account holders, investors and payees. “Collecting” here means obtaining the required due diligence information and documentation. In other words, FATCA has to be part of an FFI’s “Know Your Client” (“KYC”) procedures.

Additionally, these new due diligence requirements apply not only to new customers, but also to pre-existing account holders. Pre-existing account holders are the account holders who already had accounts with an FFI as of the time FATCA was implemented (i.e. July 1, 2014) or sometimes a different date.

The second requirement is to report to the IRS three categories of persons: (a) all US account holders; (b) recalcitrant account holders; and © non-participating (i.e. FATCA-noncompliant) FFIs. This means that, under FATCA, FFIs must turn over to the IRS the identifying information concerning accounts held by US persons as well as point out the “bad apples” who refuse to comply with FATCA.

Recalcitrant account holders is a fairly complex FATCA term. In its most basic form, it refers to an account holder who does not supply the required FATCA information and who does not fall under any types of a waiver. In a future article, I will provide a more detailed description of this term, but, at this point, I would like to refer the readers to Treas Reg § 1.1471-5(g)(2).

Finally, the FFIs are charged with the requirement to coordinate FATCA withholding as necessary. In other words, the FFIs are required to impose FATCA noncompliance penalties on any FATCA non-compliant FFI, thereby turning FATCA in a worldwide self-enforcing system from which no FFI can escape.

FFI FATCA Requirements Are Interconnected

Needless to say that all three of these FFI FATCA requirements are deeply related to each other. For example, the due diligence requirement is essential to an FFI’s ability to properly comply with its FATCA reporting and withholding obligations. It is important to keep this connection between different FFI FATCA Requirements in mind while building an effective FATCA compliance system.

Contact Sherayzen Law Office to Find Out More About Your FFI FATCA Requirements

Sherayzen Law Office is a US international tax law firm that specializes in US international tax compliance, including FATCA compliance. We also help FFIs develop an effective FATCA compliance program as well as analyze existing FATCA compliance programs.

Contact Us Today to Schedule Your Confidential Consultation!

Specified Domestic Entity Seminar | International Tax Lawyer & Attorney

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On August 17, 2017, the owner of Sherayzen Law Office, Mr. Eugene Sherayzen, conducted a seminar on the new FATCA reporting requirement concerning Form 8938, specifically the new filing category of Specified Domestic Entities (the “Specified Domestic Entity Seminar”). Mr. Sherayzen is a highly experienced attorney who specializes in U.S. international tax compliance, including FATCA Form 8938. The Specified Domestic Entity Seminar was organized by the International Business Law Section of the Minnesota State Bar Association.

The Specified Domestic Entity Seminar commenced with the historical overview of FATCA. Then, it continued to analyze the three principal parts of FATCA (as relevant to the seminar), including Form 8938.

The next part of the Specified Domestic Entity Seminar focused on the filing requirements of FATCA, including the definition of the Specified Foreign Financial Assets. Mr. Sherayzen devoted considerable time to the exploration of various categories of Form 8938 filers and their respective filing thresholds. He explained to the audience that Form 8938 was previously required to be filed only by Specified Individuals. The tax attorney then stated that, starting tax years after December 31, 2015, a domestic corporation, partnership or trust classified as a Specified Domestic Entity was required to file Form 8938.

Having finished the review of the background information, Mr. Sherayzen proceeded to analyze the definition of Specified Domestic Entity. At this point, the Specified Domestic Entity Seminar turned very technical and analytical.

After stating the general definition of Specified Domestic Entity, the tax attorney divided the definition into various parts and analyzed each part in detail. In particular, the Specified Domestic Entity seminar covered the following topics: definition of “domestic” (as defined specifically for the purposes of domestic trusts and domestic business entities), Specified Foreign Financial Assets and the phrase “formed or availed of”.

As part of the analysis of the latter, Mr. Sherayzen discussed the Closely-Held Test and the Passive Tests with their varying applications to domestic trusts and domestic business entities. The tax attorney also discussed the highly unusual attribution rules within the context of the Closely-Held Test.

After the explanation of the Form 8938 filing threshold for Specified Domestic Entities, Mr. Sherayzen concluded the Specified Domestic Entity Seminar and opened the Q&A session.

2018 Egyptian Tax Amnesty | International Tax Lawyer & Attorney

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Egyptian Law 174 of 2018 announced the 2018 Egyptian Tax Amnesty program that commenced on August 15, 2018. Egypt is no stranger to tax amnesties; in fact, the very first documented tax amnesty program in the world is believed to be the one announced by Ptolemy V Epiphanes in 197 B.C.

The 2018 Egyptian Tax Amnesty program is a continuation of the worldwide trend to fight tax noncompliance with amnesty programs. If they are structured well (such as the US OVDP) and combined with effective tax administration, these amnesty programs can be highly effective, generating large revenue streams for national governments. There are, however, numerous examples of failed amnesty programs (like the ones in Pakistan) due to either poor structuring or other factors. Let’s acquaint ourselves with the 2018 Egyptian Tax Amnesty program.

2018 Egyptian Tax Amnesty: Term

The 2018 Egyptian Tax Amnesty program will last a total 180 days starting August 15, 2018.

2018 Egyptian Tax Amnesty: Taxes and Penalties Covered

The 2018 Egyptian Tax Amnesty program will cover stamp duty, personal income tax, corporate income tax, general sales tax, and VAT liabilities that matured before August 15, 2018.

The interest and penalties on the outstanding tax liabilities related to the listed taxes will be reduced according to a fairly rigid schedule which benefits most taxpayers who go through the program within 90 days after the Program opens on August 15, 2018. These taxpayers can expect a whopping 90% reduction in penalties and interest!

If a taxpayer misses the 90-day deadline, but settles his outstanding tax debts within 45 days after the deadline, he will be entitled to a waiver of 70% of the tax debt and interest.

If a taxpayer misses both, the 90-day deadline and the 45-day deadline, but settles his outstanding tax debts within 45 days after the 70%-waiver deadline (i.e. 135 days after August 15, 2018), he can still benefit from a 50% reduction in tax penalties and interest.

US Tax Amnesty & 2018 Egyptian Tax Amnesty

US taxpayers who participate in the Egyptian Tax Amnesty should also consider pursuing a voluntary disclosure option in the United States with respect to their unreported Egyptian income and Egyptian assets. There is a risk that the information disclosed in the Egyptian Tax Amnesty may be turned over to the IRS, which may lead to an IRS investigation of undisclosed Egyptian assets and income for US tax purposes.

While the IRS Offshore Voluntary Disclosure Program closes on September 28, 2018, there is still a little time left to utilize this option. Additionally, US taxpayers should consider other relevant voluntary disclosure options, such as Streamlined Offshore Compliance Procedures.

Contact Sherayzen Law Office for Professional Help With Offshore Voluntary Disclosure of Egyptian Assets in the United States

If you have undisclosed Egyptian assets and/or Egyptian income, you should contact Sherayzen Law Office for professional help. We have helped hundreds of US taxpayers around the world to successfully settle their US tax noncompliance, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!