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Reasonable Cause Written Advice Standard | International Tax Lawyer

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Reliance on a written advice of a tax practitioner (attorney, CPA, etc.) may provide the basis for a reasonable cause exception to imposition of IRS noncompliance or late filing penalties with respect to pretty much every single US international tax compliance requirement. In this short article, I will describe the reasonable cause written advice standard concerning how the written advice should be written in order to satisfy and strengthen your legal case before the IRS.

Reasonable Cause Written Advice Standard: What A Practitioner May Advise On

First of all, it is important to understand that a practitioner may provide a written advice pretty much on any US tax matter.  In other words, a taxpayer may obtain a written advice from a practitioner on any matter concerning the application and/or interpretation of any provision of the Internal Revenue Code, any provision of law impacting the taxpayer’s US tax obligations, any Treasury regulations and any other law or regulation that the IRS administers.

Reasonable Cause Written Advice Standard: What Written Advice Should Include

When he writes a tax advice, the practitioner should make sure that he complies with some important rules:

  1. The practitioner should consider all relevant facts and circumstances that the practitioner knows or would reasonably know. This means that two things must happen: (a) practitioner should conduct a reasonable investigation, including an interview with the taxpayer, to secure the necessary facts; and (b) the taxpayer must disclose all facts that he believes to be relevant and/or the practitioner asked him about. The disclosure of relevant facts by the taxpayer is absolutely crucial to the strength of the reasonable cause exception argument.
    At the same time, a failure by the practitioner to do a reasonable investigation of relevant facts may in of itself constitute a reasonable cause. He also should not rely on what he believes unreasonable, incorrect, incomplete and/or inconsistent representations, statements, findings, or agreements (including projections, financial forecasts, or appraisals) of the taxpayer or any other person.
  2. The practitioner should base his written advice on reasonable factual and legal assumptions (including assumptions of future events).
  3. The practitioner should apply the relevant law to the facts of the case. In other words, a written advice cannot simply state the law and assume that it should apply to the taxpayer’s case without the analysis of whether the facts of this particular case fit the relevant legal standard.

A failure to comply with all of these three rules may not necessarily be lethal to your legal case, but it may greatly affect its strength.

Reasonable Cause Written Advice Standard: Reliance on Advice from Third Parties

Sometimes, a practitioner may incorporate an advice from a third person into his own written advice.  He can do it only if the advice was reasonable in light of all facts and circumstances of the case.

The IRS is clear that such reliance on a third-party advice cannot be reasonable in three circumstances. First, the practitioner knows or reasonably should know that the opinion of the other person is not reliable. Second, the practitioner knows or reasonably should know that the other person does not have the necessary competence and necessary qualifications to provide the advice.  Finally, the practitioner knows or reasonably should know that the other person has a conflict of interest in violation of the IRS Circular 230.

Contact Sherayzen Law Office to Help With the Voluntary Disclosure of Your Prior US Tax Noncompliance

If you have not disclosed your foreign income and/or foreign assets to the IRS in violation of your US tax obligations, contact Sherayzen Law Office as soon as possible for professional help.  We have helped hundreds of US taxpayers to bring their tax affairs into compliance with US tax laws, including through a voluntary disclosure such as SDOP (Streamlined Domestic Offshore Procedures), SFOP (Streamlined Foreign Offshore Procedures), DFSP (Delinquent FBAR Submission Procedures), DIIRSP (Delinquent International Information Return Submission Procedures), IRS VDP (IRS Voluntary Disclosure Practice) and Reasonable Cause disclosures. Mr. Eugene Sherayzen, an international tax attorney, can help you evaluate the strength of your legal case, including whether it meets the reasonable cause standard.  We can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Austin Business Trip | February 2022 | International Tax Lawyer & Attorney

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In early February of 2022, Mr. Sherayzen, an international tax attorney and owner of Sherayzen Law Office, Ltd., traveled to Austin, Texas. Let’s discuss this Austin business trip in more detail.

Austin Business Trip: Goals

While the business trip to Austin was very short, Mr. Sherayzen set forth three main goals for the trip: (1) meeting with a client; (2) familiarizing himself with the city, which is a major source of clients to the firm; and (3) conducting important marketing activities to promote the firm.

All of these goals were accomplished (though #2 may still need more work) despite the fact that he came to Austin at the worst possible moment – right after a winter storm when the temperatures plummeted to the twenties (Fahrenheit) from the usual upper fifties/lower sixties and there was still ice on the roads.

Austin Business Trip: Client Meeting

The first goal was very easy to achieve as the meeting with a client was set prior to his arrival to Austin.

Austin Business Trip: Getting to Know Austin

The weather and the brevity of the Austin business trip presented a formidable challenge to the second goal. Despite these problems, Mr. Sherayzen was able to familiarize himself with the old-city Austin. Even more important, he was able to visit the IRS campus in Austin that processes streamlined disclosures: Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures. Both of these options are known as Streamlined Compliance Procedures.

Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures belong to the core practice of Sherayzen Law Office. This is why visiting the Austin IRS campus was an indispensable part of the Mr. Sherayzen’s trip to this city.

One may ask: why does Mr. Sherayzen want to know Austin in person? The answer is very simple: he wants to understand how his clients live, what their particular needs are, what logistical problems they may be facing and what are the peculiarities of their everyday life. At Sherayzen Law Office, we take an extra step in delivering customized services to our clients; for this reason, we strive to understand not only the financial situation of our clients, but also their logistics.

Austin Business Trip: Marketing

Marketing is Mr. Sherayzen’s crucial goal in almost every business trip. Nothing can replace the authenticity of marketing materials made in the city where the client lives. For this reason, more than two-thirds of his trip to Austin was devoted to marketing activities.

Given the presence of an IRS campus in Austin, offshore voluntary disclosures of course constituted the focus of these marketing activities. Besides Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures, Mr. Sherayzen also covered IRS Voluntary Disclosure Practice and other voluntary disclosure options.

Additionally, as always, Mr. Sherayzen promoted the awareness of the FBAR and FATCA reporting requirements in his marketing activities. The attorney also covered important US international tax information returns such as: Forms 8865, 5471, 3520, 3520-A, et cetera.

Austin Business Trip is Part of a Major Marketing Strategy

The Austin business trip is merely one part of a major marketing strategy that Sherayzen Law Office launched last year. It is projected that this strategy will run through the end of the year 2027.

Contact Sherayzen Law Office for Professional Help With Your Offshore Voluntary Disclosure and US International Tax Compliance

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance and offshore voluntary disclosures. We help clients with their US international tax compliance issues throughout the world, including in all fifty states of the United States.

Contact Us Today to Schedule Your Confidential Consultation!

Austin Streamlined Disclosure Lawyer | International Tax Attorney

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Austin is a fast-growing city which attracts a large number of immigrants with assets in foreign countries. These assets may also generate foreign income which their owners must disclose on their US tax returns. Unfortunately many of these new residents of Austin have not correctly reported their foreign assets and foreign income to the IRS. Once they realize it, they have to grapple with a fact that their noncompliance may have exposed them to large IRS penalties. Since the majority of these persons are non-willful in their prior noncompliance, they naturally seek help from an Austin streamlined disclosure lawyer to participate in Streamlined Domestic Offshore Procedures (SDOP) or Streamlined Foreign Offshore Procedures (SFOP), but they do not fully know what the term “Austin streamlined disclosure lawyer” truly means.

In this essay, I will explore the definition of an Austin streamlined disclosure lawyer and explain why out-of-state lawyers and law firms, such as Sherayzen Law Office, should be included in the definition of this term.

Austin Streamlined Disclosure Lawyer: International Tax Attorney

From the outset, It is important to understand that all voluntary disclosures, including the Streamlined options, form part of US international tax law, because these options deal with US international tax compliance concerning foreign assets and foreign income. The knowledge that SDOP and SFOP are part of US international tax law makes you better understand what kind of a lawyer you are looking for when you search for a Austin streamlined disclosure lawyer. In reality, when you are seeking help with the SDOP and SFOP filings, you are searching for an international tax attorney.

Austin Streamlined Disclosure Lawyer: Specialty in Offshore Voluntary Disclosures

As I stated above, SDOP and SFOP form part of a very specific sub-area of offshore voluntary disclosures. This means that not every international tax attorney would be able to conduct the necessary legal analysis required to successfully complete an offshore voluntary disclosure, including Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures. Only a lawyer who has developed expertise in a very narrow sub-field of offshore voluntary disclosures within US international tax law will be fit for this job.

This means that you are looking for an international tax attorney who specializes in offshore voluntary disclosure and who is familiar with the various offshore voluntary disclosure options. Offshore voluntary disclosure options include: SDOP (Streamlined Domestic Offshore Procedures), SFOP (Streamlined Foreign Offshore Procedures), DFSP (Delinquent FBAR Submission Procedures), DIIRSP (Delinquent International Information Return Submission Procedures), IRS VDP (IRS Voluntary Disclosure Practice) and Reasonable Cause disclosures. Each of these options has it pros and cons, which may have tremendous legal and tax (and, in certain cases, even immigration) implications for your case.

Austin Streamlined Disclosure Lawyer: Geographical Location Does Not Matter

While the expertise and experience in offshore voluntary disclosures are highly important in choosing your international tax lawyer, the geographical location (i.e. the city where the lawyer lives and works) does not matter. I already hinted at why this is the case above: offshore voluntary disclosure options were all created by the IRS and form part of US international (i.e. federal) law. In other words, the local law has no relation whatsoever to the SDOP and SFOP.

This means that you are not limited to Austin when you are looking for a lawyer who can help you with your streamlined disclosure. Any international tax lawyer who specializes in this field may be able to help you, irrespective of whether this lawyer resides in Austin or Minnesota.

Moreover, the development of modern means of communications has pretty much eliminated any communication advantages that a lawyer in Austin might have had in the past over the out-of-state lawyers. This is especially true in our today’s world where the pandemic greatly reduced the number of face-to-face meetings.

Sherayzen Law Office May Be Your Austin Streamlined Disclosure Lawyer

Sherayzen Law Office, Ltd. is a highly-experienced international tax law firm that specializes in all types of offshore voluntary disclosures, including SDOP, SFOP, DFSP, DIIRSP, VDP and Reasonable Cause disclosures. Our professional tax team, led by attorney Eugene Sherayzen, has successfully helped our US clients around the globe, including in Austin, with the preparation and filing of their Streamlined Domestic Offshore Procedures disclosure. We can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Indian US Dollar Remittances | International Tax Lawyer & Attorney

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For some years now, India has remained at the top of all countries that receive remittances in US dollars. A lot of these funds flow from Indian-Americans and Indians who reside in the United States. The problem is that a lot of them are not in compliance with respect to their US international tax obligations that arise as a result of these Indian US dollar remittances.

Indian US Dollar Remittances: India Has Been the Top Recipient

For many years now, India has been one of the top countries in turn of US dollar remittances; lately it has occupied the number one spot. For example, in 2018, India received about $78.6 billion from overseas; China was a distant with only $67.4 billion followed by Mexico ($35.7 billion), the Philippines ($33.8 billion) and Egypt ($28.9 billion).

One of the biggest (if not the biggest) sources of these Indian US dollar remittances has been the United States. In fact, according to the World Bank, one of the reasons why Indian US dollar remittances were so high in 2018 was a better economic performance of the US economy. Hence, we can safely conclude that a large number of Indian-Americans and Indians who reside in the United States send a large portion of their US earnings back to India.

Indian US Dollar Remittances: US International Tax Compliance Issues

The biggest problem with Indian US dollar remittances is their potential for triggering various US international tax compliance requirements, because these remittances are made by US tax residents. Oftentimes, the repatriated funds are sitting in Indian bank accounts or they are invested in Indian stocks, bonds, mutual funds and structured products. Moreover, some of these funds are used to purchase real estate which is rented out to third parties. Still other funds are used to finance business ventures in India.

Such usage of repatriated funds may result in the obligation not only to report Indian income in the United States , but also to file numerous US information returns such as: Report of Foreign Bank and Financial Accounts (FinCEN Form 114 better known as FBAR), Forms 8938, 8621, 5471 and others. Failure to report foreign income and file these information returns may result in the imposition of draconian IRS penalties and even a criminal prosecution.

Indian US Dollar Remittances: Unawareness Among Indians of US Tax Compliance Requirements

The high potential of Indian US dollar remittances to give rise to US tax compliance issues is combined with a widespread unawareness of these issues among Indians and Indian-Americans. Many of these taxpayers are not even aware of the fact that they are considered US tax residents. Others simply have never heard of the requirement to disclose foreign accounts and other foreign assets in the United States. Still others cling to erroneous ideas and various incorrect myths concerning US tax system.

The rise of various US tax compliance requirements as a result of remittances of funds to India and the widespread ignorance of these requirements among Indians is a bad combination, because it creates the potential for the imposition of the aforementioned draconian IRS penalties on Indians who are not even conscious of the fact that they need to report their worldwide income.

Contact Sherayzen Law Office for Professional Help With US International Tax Compliance and Offshore Voluntary Disclosures Concerning Remittances of US Earnings to India

If you are an Indian who resides in the United States and you sent part of your US earnings to India, contact Sherayzen Law Office for professional help. We have successfully helped hundreds of Indians and Indian-Americans to resolve their US international tax compliance issues, including conducting offshore voluntary disclosures (such as Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures) with respect to past US tax noncompliance. We can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Happy New Year 2020 from Sherayzen Law Office!

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Sherayzen Law Office wishes everyone a very happy and prosperous New Year 2020! We also wish you stay in full US tax compliance with US international tax laws while your tax burden decreases!

And, we are here to help our clients to turn these wishes into reality! In the year 2020, Sherayzen Law Office will continue to help its clients with all US international tax law issues, including compliance with FATCA, FBAR and all US international information returns such as Forms 3520, 5471, 8621, 8865 and others.

Moreover, Sherayzen Law Office will continue its leadership in the area of offshore voluntary disclosures, helping its clients to bring themselves into full compliance with US tax laws while lowering and, in some cases, even eliminating numerous IRS penalties. We will continue to do all types of offshore voluntary disclosures, including: Streamlined Domestic Offshore Procedures (“SDOP”), Streamlined Foreign Offshore Procedures (“SFOP”), Delinquent FBAR Submission Procedures, Delinquent International Information Return Submission Procedures, Modified Traditional Voluntary Disclosure, Reasonable Cause Disclosures and others.

If you are audited by the IRS with respect to your compliance with FBAR, FATCA or any other international information return filing requirements during any point of the new year 2020, then you can advantage of Sherayzen Law Office’s services with respect to IRS audits. We have helped clients throughout the worldwide with IRS audits, including audits related to foreign corporations and offshore voluntary disclosures (e.g. SDOP IRS audit or SFOP IRS audit).

Furthermore, during the new year 2020, Sherayzen Law Office will continue to create new creative and ethical tax plans and implement the old ones in order to allow our clients to take full advantage of the benefits offered by the Internal Revenue Code.

At Sherayzen Law Office, we look at the new year 2020 as an exciting opportunity to continue to deliver top-quality US international tax services to our clients around the globe. Helping people and their businesses with their US international tax issues is our goal!

Contact us directly by phone or email to schedule your confidential consultation!

Happy New Year 2020 to you and your family!