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Child’s FBAR Requirements | FBAR Tax Lawyer & Attorney

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I often receive questions concerning a child’s FBAR requirements. Many taxpayers automatically assume that, if their children are below the age of majority, these children do not have to file FBARs. Unfortunately, this is not the case – a child’s FBAR requirements are every bit as extensive of those of his parents.

Child’s FBAR Requirements: FBAR Background Information

A US Person must file FinCEN Form 114, the Report of Foreign Bank and Financial Account, commonly known as “FBAR”, if he has a financial interest in or a signatory authority or any other authority over a foreign financial account and the highest value of this account (in the aggregate with any other foreign accounts of this US person) is in excess of $10,000. FBAR is filed separately from the tax return.

Failure to file FBAR can lead to very high penalties. In fact, FBAR has the most severe penalty system in comparison to any other forms related to foreign accounts; it includes even criminal penalties. Even when a person was not willful in his non-filing of FBAR, he may still be subject to FBAR non-willful civil penalties of up to $10,000 (as adjusted for inflation) per account per year.

Child’s FBAR Requirements: Age Does Not Matter

The gruesome consequences of a failure to file FBAR make the determination of who is required to file FBARs one of the most important tasks of an international tax lawyer. This is why understanding a child’s FBAR requirements is so important. Let’s clarify this issue right now.

The rule is that a US Person is subject to the FBAR filing requirement regardless of his age. In other words, even an infant must file an FBAR.

Hence, it is important for an international tax lawyer (and his clients) to always check whether minor children have any foreign accounts. A typical fact pattern in this context involves situations where grandparents set up foreign savings accounts for their US grandchildren.

It is especially important to keep this in mind during an offshore voluntary disclosure. Oftentimes, a voluntary disclosure is focused on parents; children’s accounts are often neglected.

Child’s FBAR Requirements: FBAR Filing

Generally, a child is responsible for filing his own FBAR. Again, this responsibility arises irrespective of the age of the child.

The IRS understands, however, that a child would normally be unable to file his own FBARs. In such cases, the responsibility for filing FBARs is placed on the legally responsible person (such as parents, guardians, et cetera). The legally responsible person will be allowed to sign and file FBARs on behalf of the child.

Contact Sherayzen Law Office With Respect to Your Child’s FBAR Requirements

If your child has foreign accounts, contact Sherayzen Law Office for professional FBAR help. We have helped hundreds of US taxpayers around the world with their FBAR obligations, and We Can Help You!

Contact Us Today to Schedule Your Confidential Consultation!

International Tax Lawyer & Attorney | April 2019 IRS Compliance Campaigns

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On April 16, 2019, the IRS Large Business and International division (LB&I) announced the approval of three additional compliance campaigns. Let’s discuss in more detail these April 2019 IRS compliance campaigns.

April 2019 IRS Compliance Campaigns: Background Information

In the mid-2010s, after extensive planning, the IRS decided to move LB&I toward issue-based examinations and a compliance campaign process. 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 and five campaigns on October 30, 2018. With the additional three April 2019 IRS compliance campaigns, there are fifty-three total IRS compliance campaigns outstanding as of the time of this writing.

The IRS has created each campaign after careful strategic planning, re-deployment of resources, creation of new training and tools as well as careful taxpayer population selection through metrics and feedback. The IRS has also built a supporting infrastructure inside LB&I for each specific campaign.

Three New April 2019 IRS Compliance Campaigns

Here are the new three new campaigns: Captive Services Provider Campaign, Offshore Private Banking Campaign and Loose-Filed Forms 5471. Each of these five campaigns was identified through LB&I data analysis and suggestions from IRS employees.

April 2019 IRS Compliance Campaigns: Captive Services Provider Campaign

The section 482 regulations and the OECD Transfer Pricing Guidelines provide rules for determining arm’s length pricing for transactions between controlled entities, including transactions in which a foreign captive subsidiary performs services exclusively for the parent or other members of the multinational group. The arm’s length price is determined by taking into consideration data available on companies performing functions, employing assets, and assuming risks that are comparable to those of the captive subsidiary.

Excessive pricing for these services would inappropriately shift taxable income to these foreign entities and erode the U.S. tax base. The goal of this campaign is to ensure that U.S. multinational companies are paying their captive service providers no more than arm’s length prices. The treatment streams for this campaign are issue-based examinations and soft letters.

April 2019 IRS Compliance Campaigns: Offshore Private Banking Campaign

US tax residents are subject to tax on worldwide income from all sources, including income generated outside of the United States. It is not illegal or improper for US taxpayers to own offshore structures, accounts or assets, but they must comply with income tax and information reporting requirements associated with these foreign activities.

Through FATCA, bilateral information exchange treaties, the Swiss Bank Program, offshore voluntary disclosures and audits, the IRS has accumulated a great pile of records that identify taxpayers with transactions and/or accounts at offshore private banks. This campaign addresses tax noncompliance and the information reporting associated with these offshore accounts. The IRS will initially address tax noncompliance through the examination and soft letter treatment streams. Additional treatment streams may be developed based on feedback received throughout the campaign.

April 2019 IRS Compliance Campaigns: Loose-Filed Forms 5471

Form 5471, Information Return of US Persons With Respect to Certain Foreign Corporations, must be attached to an income tax return (or a partnership or exempt organization return, if applicable) and filed by the return’s due date including extensions. Some taxpayers are incorrectly filing Forms 5471 by sending the form to the IRS without attaching it to a tax return.

If a Form 5471 is required to be filed and was not attached to an original return, an amended return with the Form 5471 attached should be filed. The goal of this campaign is to improve compliance with the requirement to attach a Form 5471 to an income tax, partnership or exempt organization return.

Contact Sherayzen Law Office for Professional Tax Help

If you have been contacted by the IRS as part of any of its campaigns, you should 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!

2018 FBAR Currency Conversion Rates | FBAR Tax Lawyer & Attorney

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2018 FBAR and 2018 Form 8938 instructions both require that 2018 FBAR Currency Conversion Rates be used to report the required highest balances of foreign financial assets on these forms. In the case of 2018 Form 8938, the 2018 FBAR Currency Conversion Rates is the default choice, not an exclusive one.

The U.S. Department of Treasury  already published the 2018 FBAR Currency Conversion Rates online (they are called “Treasury’s Financial Management Service rates” or the “FMS rates”).

Since the 2018 FBAR Currency Conversion Rates are very important to US taxpayers, international tax lawyers and international tax accountants, Sherayzen Law Office provides the table below listing the official 2018 FBAR Currency Conversion Rates (note that the readers still need to refer to the official website for any updates).

Country – Currency

Foreign Currency to $1.00
AFGHANISTAN – AFGHANI

74.576
ALBANIA – LEK

107.05
ALGERIA – DINAR

117.898
ANGOLA – KWANZA

310.0000
ANTIGUA – BARBUDA – E. CARIBBEAN DOLLAR

2.7000
ARGENTINA – PESO

37.642
ARMENIA – DRAM

485.0000
AUSTRALIA – DOLLAR

1.4160
AUSTRIA – EURO

0.8720
AZERBAIJAN – NEW MANAT

1.7000
BAHAMAS – DOLLAR

1.0000
BAHRAIN – DINAR

0.3770
BANGLADESH – TAKA

84.0000
BARBADOS – DOLLAR

2.0200
BELARUS – NEW RUBLE

2.1600
BELGIUM – EURO

0.8720
BELIZE – DOLLAR

2.0000
BENIN – CFA FRANC

568.6500
BERMUDA – DOLLAR

1.0000
BOLIVIA – BOLIVIANO

6.8500
BOSNIA – MARKA

1.7060
BOTSWANA – PULA

10.6610
BRAZIL – REAL

3.8800
BRUNEI – DOLLAR

1.3610
BULGARIA – LEV

1.7070
BURKINA FASO – CFA FRANC

568.6500
BURUNDI – FRANC

1790.0000
CAMBODIA (KHMER) – RIEL

4103.0000
CAMEROON – CFA FRANC

603.8700
CANADA – DOLLAR

1.3620
CAPE VERDE – ESCUDO

94.8800
CAYMAN ISLANDS – DOLLAR

0.8200
CENTRAL AFRICAN REPUBLIC – CFA FRANC

603.8700
CHAD – CFA FRANC

603.8700
CHILE – PESO

693.0800
CHINA – RENMINBI

6.8760
COLOMBIA – PESO

3245.8000
COMOROS – FRANC

428.1400
CONGO, DEM. REP – CONGOLESE FRANC

1630.0000
COSTA RICA – COLON

603.5000
COTE D’IVOIRE – CFA FRANC

568.6500
CROATIA – KUNA

6.3100
CUBA – PESO

1.0000
CYPRUS – EURO

0.8720
CZECH REPUBLIC – KORUNA

21.9410
DENMARK – KRONE

6.5170
DJIBOUTI – FRANC

177.0000
DOMINICAN REPUBLIC – PESO

49.9400
ECUADOR – DOLARES

1.0000
EGYPT – POUND

17.8900
EL SALVADOR – DOLARES

1.0000
EQUATORIAL GUINEA – CFA FRANC

603.8700
ERITREA – NAKFA

15.0000
ESTONIA – EURO

0.8720
ETHIOPIA – BIRR

28.0400
EURO ZONE – EURO

0.8720
FIJI – DOLLAR

2.1080
FINLAND – EURO

0.8720
FRANCE – EURO

0.8720
GABON – CFA FRANC

603.8700
GAMBIA – DALASI

50.0000
GEORGIA – LARI

2.6700
GERMANY – EURO

0.8720
GHANA – CEDI

4.8250
GREECE – EURO

0.8720
GRENADA – EAST CARIBBEAN DOLLAR

2.7000
GUATEMALA – QUENTZAL

7.7150
GUINEA – FRANC

9076.0000
GUINEA BISSAU – CFA FRANC

568.6500
GUYANA – DOLLAR

215.0000
HAITI – GOURDE

77.1180
HONDURAS – LEMPIRA

25.0000
HONG KONG – DOLLAR

7.8320
HUNGARY – FORINT

280.1700
ICELAND – KRONA

116.1100
INDIA – RUPEE

69.8000
INDONESIA – RUPIAH

14440.0000
IRAN – RIAL

42000.0000
IRAQ – DINAR

1138.0000
IRELAND – EURO

0.8720
ISRAEL – SHEKEL

3.7490
ITALY – EURO

0.8720
JAMAICA – DOLLAR

126.0000
JAPAN – YEN

109.8500
JERUSALEM – SHEKEL

3.7490
JORDAN – DINAR

0.7080
KAZAKHSTAN – TENGE

375.1500
KENYA – SHILLING

101.8000
KOREA – WON

1114.4900
KOSOVO – EURO

0.8720
KUWAIT – DINAR

0.3030
KYRGYZSTAN – SOM

69.8000
LAOS – KIP

8535.0000
LATVIA – EURO

0.8720
LEBANON – POUND

1500.0000
LESOTHO – SOUTH AFRICAN RAND

14.3500
LIBERIA – DOLLAR

156.7100
LIBYA – DINAR

1.3860
LITHUANIA – EURO

0.8720
LUXEMBOURG – EURO

0.8720
MACAO – MOP

no listing
MACEDONIA FYROM – DENAR

53.5000
MADAGASCAR – ARIARY

3470.2000
MALAWI – KWACHA

733.0000
MALAYSIA – RINGGIT

4.1300
MALI – CFA FRANC

568.6500
MALTA – EURO

0.8720
MARSHALL ISLANDS – DOLLAR

1.0000
MARTINIQUE – EURO

0.8720
MAURITANIA – OUGUIYA

36.0000
MAURITIUS – RUPEE

34.1500
MEXICO – PESO

19.6540
MICRONESIA – DOLLAR

1.0000
MOLDOVA – LEU

16.9930
MONGOLIA – TUGRIK

2642.9200
MONTENEGRO – EURO

0.8720
MOROCCO – DIRHAM

9.5300
MOZAMBIQUE – METICAL

61.5300
MYANMAR – KYAT

1535.0000
NAMIBIA – DOLLAR

14.3500
NEPAL – RUPEE

111.6000
NETHERLANDS – EURO

0.8720
NETHERLANDS ANTILLES – GUILDER

1.7800
NEW ZEALAND – DOLLAR

1.4900
NICARAGUA – CORDOBA

32.3000
NIGER – CFA FRANC

568.6500
NIGERIA – NAIRA

361.0000
NORWAY – KRONE

8.6800
OMAN – RIAL

0.3850
PAKISTAN – RUPEE

138.6000
PALAU – DOLLAR

1.0000
PANAMA – BALBOA

1.0000
PAPUA NEW GUINEA – KINA

3.2840
PARAGUAY – GUARANI

5956.0000
PERU – NUEVO SOL

3.3750
PHILIPPINES – PESO

52.4900
POLAND – ZLOTY

3.7530
PORTUGAL – EURO

0.8720
QATAR – RIYAL

3.6400
ROMANIA – NEW LEU

4.0690
RUSSIA – RUBLE

69.6800
RWANDA – FRANC

890.0000
SAO TOME & PRINCIPE – NEW DOBRAS

21.5350
SAO TOME & PRINCIPE – DOBRAS

20941.0080
SAUDI ARABIA – RIYAL

3.7500
SENEGAL – CFA FRANC

568.6500
SERBIA – DINAR

103.3900
SEYCHELLES – RUPEE

13.5500
SIERRA LEONE – LEONE

8620.0000
SINGAPORE – DOLLAR

1.3610
SLOVAK REPUBLIC – EURO

0.8720
SLOVENIA – EURO

0.8720
SOLOMON ISLANDS – DOLLAR

7.7520
SOMALI – SHILLING

575.0000
SOUTH AFRICA – RAND

14.3500
SOUTH SUDANESE – POUND

153.7000
SPAIN – EURO

0.8720
SRI LANKA – RUPEE

182.6000
ST LUCIA – EC DOLLAR

2.7000
SUDAN – SUDANESE POUND

47.0000
SURINAME – GUILDER

7.5200
SWAZILAND – LILANGENI

14.3500
SWEDEN – KRONA

8.9380
SWITZERLAND – FRANC

0.9840
SYRIA – POUND

515.0000
TAIWAN – DOLLAR

30.5880
TAJIKISTAN – SOMONI

9.3500
TANZANIA – SHILLING

2295.0000
THAILAND – BAHT

32.3500
TIMOR – LESTE DILI

1.0000
TOGO – CFA FRANC

568.6500
TONGA – PA’ANGA

2.1730
TRINIDAD & TOBAGO – DOLLAR

6.7700
TUNISIA – DINAR

3.0090
TURKEY – LIRA

5.2830
TURKMENISTAN – NEW MANAT

3.4910
UGANDA – SHILLING

3705.0000
UKRAINE – HRYVNIA

27.7000
UNITED ARAB EMIRATES – DIRHAM

3.6730
UNITED KINGDOM – POUND STERLING

0.7810
URUGUAY – PESO

32.3200
UZBEKISTAN – SOM

8310.0000
VANUATU – VATU

111.6900
VENEZUELA – BOLIVAR – SOBERANO

563.9800
VENEZUELA – BOLIVAR – FUERTE

248832.0000
VIETNAM – DONG

23190.0000
WESTERN SAMOA – TALA

2.5350
YEMEN – RIAL

480.0000
ZAMBIA – NEW KWACHA

11.9000
ZIMBABWE – DOLLAR

1.0000

St Paul International Tax Lawyer: Hiring Questions

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When you are about to hire a St Paul international tax lawyer to help you with an international tax issue, there are three fundamental questions that you need to ask him.

Hiring St Paul International Tax Lawyer Question #1:  How Will I Be Billed?

Generally, a St Paul international tax lawyer will bill you on an hourly basis, particularly in a tax litigation setting. He will provide you with a general estimate of your future expenses, which, understandably, will vary with the progress of the case. In a tax preparation or sometimes even in a simple tax planning case, a St Paul international tax lawyer may also offer a flat fee option. Where there are complex international tax planning issues involved, however, most St Paul international tax lawyers are likely to charge on an hourly basis. Similarly, while working on international tax compliance issues (Form 3520, 5471, 8891, et cetera) or preparing a tax return (including foreign tax credit and earned foreign income exclusion), St Paul international tax lawyers tend to rely on the hourly fee arrangements.

The more important issue with regard to this question is the manner in which you will be billed. Here, the practice varies among international tax lawyers in St Paul, Minnesota. Some St Paul international tax lawyers may require you to provide a large retainer which is later deposited in a client trust account; the withdrawals from the account are made in conjunction with the work completed and as spelled out in the retainer agreement between the lawyer and the client. If the retainer is later depleted, your St Paul international tax lawyer may ask you to replenish it. Other St Paul international tax lawyers will require a smaller retainer and will then bill you on a monthly basis. If the latter option is proposed by your St Paul international tax lawyer, you should ask for a sufficient time period (usually 10-14 days) to pay your bill. A mix of these options is also available. You will find that St. Paul international tax lawyers, especially solo practitioners, are rather flexible in their choice of the payment mode, but, once the fee agreement is signed, they will be firm in insisting that you comply with the terms of the agreement.

Hiring St Paul International Tax Lawyer Question #2: What percentage of the practice is devoted to the international tax law?

The purpose of this question is two-fold. First, you will figure out whether this St Paul international tax lawyer likes handling cases in your area of law. If a tax lawyer devotes more than 50% of his practice to international tax law, you know that he likes this area of law and will be enthusiastic about your case. This means that, in addition to his general due diligence obligations, this St Paul international tax lawyer will have a professional interest in your case. Second, generally, a St Paul international tax lawyer who devotes 50% or more of his practice to international tax law is likely to have good experience in this area.

Hiring St Paul International Tax Lawyer Question #3: will this St Paul international tax lawyer devote his personal attention to your case?

This question is very important, because you need to make sure that your lawyer personally works on your case. This becomes one of the biggest problems with hiring most mid-size and large law firms, because in those firms, the partner with whom you signed the agreement will generally delegate a large percentage (sometimes virtually all) of his responsibilities to his associates, who are generally less experienced in the area than the partner. In this case, you should insist that the St Paul international tax lawyer who signed the retainer agreement with you devotes his personal attention to your case and delegates only marginal matters to his associates. Generally, solo practitioners or small international firms do not have similar problems.

The other important issue involved in this question is whether your St Paul international tax lawyer is generally responsive to your calls and keeps you up-to-date with respect to the progress of your case. Most international tax lawyers are very busy people; yet, you must insist that you should be able to communicate with them. In my practice, I devote a great deal of energy and time to make sure that my clients do not feel neglected and have the latest information about their case available to them. For example, my firm has a rule of returning most calls before the end of the day.

Contact Sherayzen Law Office for Professional Legal Help With Your International Tax Issues