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Specified Individual | FATCA International Tax Lawyers and Attorneys

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Specified Individual is a key tax term that must be correctly understood in order to properly identify the persons who are required to file FATCA Form 8938. In this brief article, I will describe the general definition of a Specified Individual for Form 8938 purposes.

Specified Individual: FATCA Form 8938 Background

In 2010, one of the most important events in modern history of US taxation happened – the passage and signing of the Foreign Account Tax Compliance Act or FATCA. FATCA completely revolutionized the entire landscape of international tax law, elevating the international exchange of tax-related and account-related information to an unprecedented level. FATCA also created a brand-new requirement called Form 8938.

Form 8938 requires US taxpayers to report to the IRS their Specified Foreign Financial Assets (“SFFA”) together with the taxpayers’ US tax returns. Prior to tax year 2016, only a Specified Individual was required to report his SFFA to the IRS. Starting tax year 2016, a Specified Domestic Entity is also required to disclose its SFFA on Form 8938.

Specified Individual Definition

Treas. Reg. §1.6038D-1(a)(2) defines a “specified individual” as anyone who is: (I) US citizen; (ii) resident alien of the United States for any portion of the taxable year; (iii) nonresident alien for whom an election under 26 U.S.C. §6013(g) or (h) is in effect (i.e. nonresident alien who makes an election to be treated as a resident alien in order to file a joint US tax return); or (iv) nonresident alien who is a bona fide resident of Puerto Rico or a section 931 possession (as defined in Treas. Reg. §1.931-1(c)(1) – i.e. Guam, American Samoa and Northern Mariana Islands).

Resident alien includes anyone who is a US permanent resident or meets the substantial presence test.

Contact Sherayzen Law Office for Help With Form 8938 If You Are a Specified Individual

If you are a specified individual who has undisclosed foreign accounts or any other SFFA, contact Sherayzen Law Office as soon as possible to explore your offshore voluntary disclosure options. Sherayzen Law Office is a highly experienced international tax law firm that specializes in offshore voluntary disclosures, including Streamlined Compliance Procedures (both Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures), Delinquent FBAR Submission Procedures, Delinquent International Information Return Submission Procedures and Reasonable Cause (so-called Noisy) Disclosures.

We have helped hundreds of US taxpayers all around the globe to bring their US tax affairs into full compliance with US tax laws, and We can Help You! Contact Us Today to Schedule Your Confidential Consultation!

Swiss-Indian AEOI Declaration Signed | FATCA Lawyer New York

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On November 22, 2016, Switzerland and India signed a joint declaration on the introduction of the automatic exchange of information (AEOI) in tax matters on a reciprocal basis. The joint declaration (Swiss-Indian AEOI Declaration) was signed by Sushil Chandra, chair of India’s Central Board of Direct Taxes, and Gilles Roduit, deputy chief of mission of the Swiss Embassy in India.

Swiss-Indian AEOI Declaration Will Follow CRS

The Swiss-Indian AEOI Declaration foresees that AEOI will be based on the Common Reporting Standard (CRS) adopted by OECD. From the Swiss legal perspective, the AEOI with India will be based on the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). The MCAA is based on the international standard for the exchange of information developed by the OECD. The OECD introduced the standard in February of 2014; the G-20 leaders approved it in November of 2015 during the G-20 summit in Brisbane, Australia.

Implementation Time Frame for Swiss-Indian AEOI Declaration

Both governments committed to start collecting the CRS-required data in 2018. The actual exchange of the CRS data will commence in 2019 and continue onwards. Both governments must notify each other of relevant developments regarding the implementation of the CRS in their domestic legislation.

Implications of Swiss-Indian AEOI Declaration for US Taxpayers

The Swiss-Indian AEOI Declaration increases the probability of the IRS being able to obtain FATCA data from both countries regarding noncompliant US taxpayers with assets in Switzerland and/or India. The reason is simple: as financial institutions comb through their client data, there is an increased probability that they may encounter that some of their taxpayers are US taxpayers whose information needs to be reported to the IRS under FATCA.

Moreover, under the Swiss-Indian AEOI Declaration, both countries anticipate that their taxpayers will participate in a local voluntary disclosure program as part of the transaction to the AEOI system. Both countries must notify each other about these programs and it is possible that more information than usual will be revealed during these voluntary disclosures. Hence, the local Swiss and Indian voluntary disclosure programs further increase the probability that the IRS may find out about the assets of noncompliant US taxpayers.

Contact Sherayzen Law Office for Help With the IRS Voluntary Disclosure of Your Unreported Foreign Assets and Foreign Income

If you are a US tax resident with undisclosed assets in India and/or Switzerland, you should contact Sherayzen Law Office for professional help with your IRS voluntary disclosure of these assets as soon as possible. In today’s world, the probability that the information regarding your undisclosed assets will be detected by the IRS has increased exponentially as the recent Swiss-Indian AEOI Declaration demonstrates. Combined with FATCA, you are running an unacceptable risk of IRS detection that may result in the imposition of draconian IRS penalties, including criminal penalties.

Over the past more than 10 years, Sherayzen Law Office has helped hundreds of US taxpayers with assets around the globe to bring their tax affairs into full compliance with US tax laws, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!