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Retaining Savannah International Tax Attorney: Location Choice

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One of the important issues that US taxpayers with undisclosed foreign accounts face is whether it is better to retain an international tax attorney in Savannah or in Minneapolis if you live in Savannah, Georgia? If you were to search “Savannah international tax attorney”, Sherayzen Law Office, Ltd. (which is based in Minneapolis) is likely to come out on the first page together with other international tax attorneys in Savannah. The question is: should the geographical proximity of an attorney play a role in the retainer decision?

The answer depends on many factors. On the one hand, if you are looking for a sales tax attorney, then you may not have a choice but to find a local attorney. This is because local law and procedure would govern in this case, and an attorney familiar with local sales tax issues would be the best choice for handling a sales tax case. Of course, even in this case, there are exceptions because, sometimes, the unique qualities of an outside attorney are so desirable by the client that the court may accede in temporarily admitting this outside lawyer to practice just for one case.

One the other end of the spectrum, if you are searching for a Savannah international tax attorney because you have undeclared offshore accounts, then the knowledge of local law and procedure are likely to be of very little value. Instead, the experience and knowledge of an attorney in his area of offshore voluntary disclosures will become the most important factors in retaining an international tax attorney.

What if you have an international tax lawyer in Savannah, do you still want to consider an attorney in Minneapolis? The answer is “yes” – for two reasons. First, international tax attorneys differ in their natural ability to identify problems and find solutions, creativity, advocacy and many other factors. Therefore, there is no reason to stay away from a better international tax attorney in Minneapolis even if there is a lawyer in Savannah.

Second, in addition to differences in personal qualities, the experience of the international tax attorney in the area of offshore voluntary disclosures and the ability to analyze the specific subject matter of the undisclosed accounts in the broader context of the voluntary disclosure (including potential strategies that may become available due to client’s specific facts) are very important factors in retaining the attorney and should override the attorney’s particular geography.

What is a fairly unique feature about Sherayzen Law Office is that we can handle the entire case internally – both, the legal and the accounting sides of it. Most Savannah international tax attorneys in this area of law do not do that and rely on the outside accountant to provide such additional services. The outsourcing approach has various disadvantages, including potential leak of information, lack of close coordination between both sides of the case, increased possibility of missed opportunities and absence of the unity of goal among the professionals who are preoccupied with their respective areas only. The approach adopted by Sherayzen Law Office is aimed to reduce and eliminate such problems.

So, the next time you search for a Savannah international tax attorney, keep these issues in mind while retaining an attorney from Minneapolis or any other city.

Contact Sherayzen Law Office for Help With International Tax Issues

If you have any international tax issues with respect to undeclared foreign financial accounts or international tax compliance in general, contact Sherayzen Law Office for comprehensive legal and tax help.

Fifth Protocol to the Canada-US Income Tax Treaty

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The Fifth Protocol to the Canada-US Income Tax Convention (also known as the Canada-US Income Tax Treaty) was signed in 2007 and ratified by the U.S. Senate the following year, making significant changes to the then existing treaty.

This article will briefly explain some of the major Fifth Protocol (“Protocol”) changes to the US-Canada Income Tax Treaty (“Treaty”). It is not intended to constitute tax or legal advice, and it does not cover every change to the Treaty.

Cross-border taxation can involve many complex tax and legal issues, so you are advised to seek an experienced attorney in these matters. Sherayzen Law Office, PLLC can assist you in all of your tax and legal needs, and help you avoid making costly mistakes.

Treaty Article XI- Withholdings on Interest

One substantial change to the Canada-US Tax treaty was the elimination of withholding tax on cross-border interest payments to unrelated parties. According to the Protocol, “[I]nterest means income from debt-claims of every kind, whether or not secured by mortgage, and whether or not carrying a right to participate in the debtor’s profits, and in particular, income from government securities and income from bonds or debentures, including premiums or prizes attaching to such securities, bonds or debentures, as well as income assimilated to income from money lent by the taxation laws of the Contracting State in which the income arises.” It should be noted however that “interest” under this definition does not include dividends.

Taxpayer Migration – Protection Against Double Taxation

Under the previous rule, the US and Canada were allowed to tax residents on all of their capital gains without any provisions made for the fact that a country may have leveled a pre-departure tax on emigrants. The Protocol addressed this concern by allowing such individuals to “[E]lect to be treated for the purposes of taxation in the other Contracting State, in the year that includes that time and all subsequent years, as if the individual had, immediately before that time, sold and repurchased the property for an amount equal to its fair market value at that time.” (See Article 8 of the Protocol).

Mandatory Arbitration

For US and Canadian residents subject to certain unresolved double-taxation issues between US and Canadian revenue authorities within a specified time period, the Protocol changed the existing Treaty to allow taxpayers to require that the revenue authorities of the two countries enter a binding arbitration. While the arbitration procedure is mandatory for revenue authorities once compelled by a taxpayer, the decision of whether to do so is entirely optional for the taxpayer. A taxpayer must have filed a tax return with at least one of the two countries to utilize the election.

“Limited Liability Companies” (LLCs) and Other Hybrid Entities

LLCs and certain other hybrid entities face different tax treatment in the US and Canada. In general, in the US, such entities are treated as pass-through vehicles, whereas in Canada, they are treated as corporations (please see Department of Finance Canada for more information about Canadian taxation). Prior to the Protocol, a reduced withholding tax rate was not available to such entities because an entity must be taxable as a “resident” in at least one of the two countries in order to benefit from the Treaty. According to the Department of Finance Canada, under the Protocol changes, “Income that the residents of one country earn through a hybrid entity will in certain cases be treated by the other country (the source country) as having been earned by a resident of the residence country. On the other hand, a corollary rule provides that if a hybrid entity’s income is not taxed directly in the hands of its investors, it will be treated as not having been earned by a resident.”

Contact Sherayzen Law Office for Help with US-Canada Cross-border Tax Issues

If you have any questions regarding US-Canada tax treaties or you have not filed your Forms 8891, contact the experienced tax firm of Sherayzen Law Office for help.