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Denver FBAR Lawyer | Foreign Accounts Tax Attorney

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Finding a good Denver FBAR Lawyer is not easy, especially if you do not know what exactly Denver FBAR Lawyer means. In this essay, I will define what lawyers fit into the definition of a Denver FBAR Lawyer and why you should retain the services of my firm, Sherayzen Law Office, Ltd.

Denver FBAR Lawyer Definition: Legal FBAR Services Provided in Denver, Colorado

Some of the readers may be surprised to learn that the definition of a Denver FBAR Lawyer is not limited by the physical presence of the lawyer. Rather, a Denver FBAR Lawyer is any international tax lawyer who offers legal and tax services related to FBARs in Denver, Colorado. This means that your FBAR lawyer can reside in Minneapolis and still be considered as Denver FBAR Lawyer even if he has never been to Denver.

Why is that? The reason is simple: FBAR is federal law, not state law; i.e. the city of Denver and the State of Colorado have absolutely nothing to do with the implementation of FBAR. Since there is no local input, the physical residence of your lawyer gives you no advantage whatsoever when it comes to legal services related to FBARs.

Denver FBAR Lawyer Must Be an International Tax Lawyer

While the physical location of a your FBAR lawyer is irrelevant, his competence in FBARs and the US international tax law is an indispensable quality. It is important to understand that, in the great majority of cases, the FBAR issues are tightly intertwined with other international tax compliance requirements, and it is the interaction between the FBAR and other international tax issues that is relevant to the determination of a taxpayer’s legal position. This is why your Denver FBAR lawyer should be highly knowledgeable in other areas of international tax law in addition to FBARs.

Denver FBAR Lawyer: the Convenience of Communication

Perhaps, while the readers agree that the definition of a Denver FBAR lawyer should include any experienced international tax lawyer who provides FBAR-related services in Denver, they may still point to old belief of the ease of communication with a local lawyer. In essence, this myth holds that while an out-of-state FBAR lawyer may be more competent in international tax law, it is better to rely on a local FBAR lawyer because it would be easier to communicate with him.

This myth is simply incorrect, because it does not take into account the development modern communications technology and it incorrectly represents a client’s communication with their Denver FBAR lawyer.

The modern communications technology has virtually eliminated the entire advantage of retaining a local Denver FBAR Lawyer. Email, telephone, fax and Skype video conferences provide ample opportunities to communicate with your lawyer wherever he is and at any point of time. In fact, as an international tax lawyer, I have continuously relied on these means of communication to successfully represent all of my out-of-state clients, including Denver, Colorado. There has not been a single case where my geographical location was of any importance.

Furthermore, it is important to understand that, aside from the initial consultation (which can also be conducted on Skype or telephone), almost all of your communication with a local Denver FBAR lawyer will be through the same modern means of communication – email and telephone. This means that 98% of communication between you and your lawyer will be done in the same manner irrespective of whether he resides in Denver!

Sherayzen Law Office is a Top Choice for Your Denver FBAR Lawyer

Sherayzen Law Office occupies a leading position in the world on this subject with extensive knowledge and experience concerning all major relevant areas of international tax law including PFIC compliance, Subpart F rules, all types of US international reporting returns, US income tax returns (individual, partnership and corporate) for domestic and foreign persons, et cetera. Furthermore, this is one of the leading international tax law firms in the world with experience in all major IRS voluntary disclosure programs, including 2009 OVDP, 2011 OVDI, 2012 OVDP and 2014 OVDP (now closed).

This is why, if you are looking for a Denver FBAR lawyer, contact Sherayzen Law Office, Ltd. today to schedule Your Confidential Consultation!

FBAR PFIC Reporting | FBAR Tax Attorney

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FBAR PFIC Reporting is an important issue for U.S. shareholders of passive foreign investment companies (“PFICs”). I will now briefly explore the FBAR PFIC Reporting requirement and when it applies to U.S. shareholders of a PFIC.

FBAR PFIC Reporting: FBAR Background

FinCEN Form 114, the Report of Foreign Bank and Financial Accounts, commonly known as FBAR, originally came into existence as a result of the 1970 Bank Secrecy Act. FBAR is one of the main and arguably the most important international tax requirement in the IRS. The form must be filed by every U.S. tax resident who has foreign financial accounts the aggregate value of which exceeds $10,000 at any time during the calendar year. The aggregate value should be calculated based on all foreign bank and financial accounts in which this U.S. tax resident has financial interest or over which he has signatory or other authority.

Failure to file an FBAR may result in the imposition of draconian FBAR penalties, including criminal penalties in grave cases of willful noncompliance.

FBAR PFIC Reporting: PFIC Definition

PFIC (Passive Foreign Investment Company) is one of the most complex tax requirements of the U.S. tax system. In addition to the potentially tremendously burdensome tax compliance required for PFICs, PFICs may result in the imposition of a much higher income tax with PFIC interest on the PFIC tax.

The basic definition of a PFIC is any foreign corporation in which: “(1) 75 percent or more of the gross income of such corporation for the taxable year is passive income, or (2) the average percentage of assets (as determined in accordance with subsection (e)) held by such corporation during the taxable year which produce passive income or which are held for the production of passive income is at least 50 percent.” IRC Section 1297(a). While many types of companies may unexpectedly be classified as PFICs by the IRS, foreign mutual funds seem to be the most common trap for the unwary U.S. taxpayers.

If a U.S. taxpayer has PFICs, he/she is required to file a separate Form 8621 “Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund” for each PFIC.

FBAR PFIC Reporting: Three Potential FBAR Requirements

There are three most common situations when an FBAR should be filed for a PFIC, assuming the statutory aggregate threshold of $10,000 is satisfied. First, FBAR PFIC reporting is required if a PFIC is held in a financial account; in this case, FBAR PFIC reporting will occur for the account itself (which, in India especially, may correspond to the folio number of a PFIC in any case). For example, if a U.S. person has an Assurance Vie account in France that contains PFICs, he would have to report the Assurance Vie account on the FBAR, including the value of the PFICs.

Second, FBAR PFIC reporting is required if a PFIC shareholder has signature authority over foreign financial accounts owned by a PFIC. In this case, FBAR PFIC reporting will occur for these foreign financial accounts in Section IV of the FBAR.

Finally, the third most common situation where FBAR PFIC reporting is required is a scenario where a U.S. person owns more than 50% of a PFIC and this PFIC has foreign financial accounts. In such case, the U.S. person is assumed to have a financial interest in the foreign financial accounts of this PFIC and he needs to disclose these accounts on his FBAR.

FBAR PFIC Reporting: Filing Form 8621 does NOT Satisfy the FBAR Filing Requirement

It is important to emphasize that filing form 8621 for a PFIC does not relieve the filer from his FBAR obligations. Even if Form 8621 is filed, the filer must also file the FBAR.

Contact Sherayzen Law Office for Professional Help with FBAR PFIC Reporting

FBAR PFIC reporting can be extremely complex and it is very easy to make mistakes with respect to what needs to be disclosed and how. These mistakes, however, can be expensive to remedy and may result in imposition of various large penalties.

This is why, if you have PFICs that require FBAR and Form 8621 disclosure, you need to contact Sherayzen Law Office for professional help. Our team of experienced tax professionals will help you properly disclose your PFICs on your FBAR and report your PFIC income on your personal or business tax returns. If you have not complied with your FBAR PFIC reporting requirement in the past and wish to remedy this situation, Sherayzen Law Office will also help you with the voluntary disclosure of your FBARs and PFICs, including the preparation of all necessary tax forms and legal documents.

Contact Us Today to Schedule Your Confidential Consultation!

No FBAR Penalty Option

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No FBAR Penalty is the result that every taxpayer wishes to achieve. Indeed, having no FBAR penalty is a realistic objective, but only in certain situations. One of such situations is currently offered by the IRS through Delinquent FBAR Submission Procedures.

History of the IRS Procedures Regarding No FBAR Penalty Option

There is a relatively long history behind the option that taxpayers with delinquent FBARs would be charged no FBAR penalty. It comes from the traditional link between income tax noncompliance and the imposition of an FBAR penalty. Prior to 2009 OVDP, the No FBAR Penalty option was unofficial, but very much part of the IRS tradition in situations where a taxpayer would not have any additional U.S. tax liability as a result of his voluntary disclosure of foreign accounts.

The rules for the 2009 IRS Offshore Voluntary Disclosure Programs (“2009 OVDP”) finally officially recognized the No FBAR Penalty option in the answer to Question #9. The FAQ #9 also for the first time properly stated the legal philosophy behind the No FBAR Penalty option: “The purpose for the voluntary disclosure practice is to provide a way for taxpayers who did not report taxable income in the past to voluntarily come forward and resolve their tax matters.” Hence, if a taxpayer “reported and paid tax on all taxable income but did not file FBARs, do not use the voluntary disclosure process.” Rather, the taxpayer was urged to file the FBARs directly with the explanation of why the FBARs were filed late.

Both, the 2011 IRS Offshore Voluntary Disclosure Initiative (“2011 OVDI) and 2012 Offshore Voluntary Disclosure Program (“2012 OVDI) again reinforced the No FBAR Penalty with FAQ #17: “The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and you have not previously been contacted regarding an income tax examination or a request for delinquent returns.”

On June 18, 2014, with the creation of 2014 Offshore Voluntary Disclosure Program (“2014 OVDP”), the IRS removed the 2014 OVDP FAQ #17 and replaced it the modern official No FBAR Penalty option called Delinquent FBAR Submission Procedures.

No FBAR Penalty Option under the Delinquent FBAR Submission Procedures

Under the Delinquent FBAR Submission Procedures, the IRS promises not to impose FBAR penalties for the failure to file the delinquent FBARs if three requirements are met: (1) the taxpayer properly reported on his U.S. tax returns (and paid all tax on) the income from the foreign financial accounts reported on the delinquent FBARs; (2) the IRS has not contacted the taxpayer previously regarding an income tax examination (civil or criminal) for the years for which the delinquent FBARs are submitted; and (3) the IRS has not previously requested from the taxpayer the FBARs for the years for the years for which the delinquent FBARs are submitted.

If all three requirements are met, the taxpayers can pursue Delinquent FBAR Submission Procedures by filings the delinquent FBARs with FinCEN directly. A statement explaining why the FBARs are filed late must be provided to the IRS.

Contact Sherayzen Law Office to Explore Your No FBAR Penalty Options

Delinquent FBAR Submission Procedures is probably one of the most popular No FBAR penalty options, but it is a limited one because it is not always possible to comply with all three of the formal requirements of the Procedures. Thankfully, these Procedures are not the only No FBAR Penalty Option offered by the IRS.

This is why, if you have undisclosed foreign accounts, you should contact the experienced international tax law firm of Sherayzen Law Office. We will thoroughly explore your case, analyze your No FBAR penalty and voluntary disclosure options, choose the disclosure route that best balances your risks and rewards, prepare all of the required legal documents and tax forms, and defend your case against the IRS. We have helped hundreds of U.S. taxpayers around the world and we can help You!

Contact Us Today to Schedule Your Confidential Consultation!