Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen; I’m an International Tax Attorney and owner of Sherayzen Law Office, Ltd.
Today, we are continuing our vlog from Zurich, Switzerland. We are standing in front of the Julius Baer or Baer Bank here in downtown Zurich. Julius Baer is a Multinational Private Bank which was investigated by the IRS and entered into the anti-prosecution deferral agreement with the US Department of Justice in 2016; it paid over $500 million dollars in Penalties and agreed to disclose all of its US Clients to the Department of Justice.
A bank which does not comply with US Tax Reporting Requirements, which assists US Taxpayers in hiding foreign income or foreign assets is likely to draw the wrath of the US Department of Justice and may face criminal prosecution from the US Government.
This is why it is important for Foreign Financial Institutions to stay in Compliance with FATCA and CRS. If you are a banker who is interested in developing a FATCA Compliance Program for your bank, contact me directly at (952) 500-8159 or email me at [email protected].
Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd.
Today, I would like to discuss with you one of the most interesting problems that almost every taxpayer faces when he does a Voluntary Disclosure: the issue of current Tax Compliance. Let me explain what I mean by this.
Let’s suppose that you discovered (that) you have not filed your form 8938 or perhaps FBAR; let’s say you haven’t done that for a number of years. At this point you’re not able to obtain all the documentation necessary to complete the amended tax forms or to complete the necessary tax forms in order to file your Voluntary Disclosure. So, in essence what you’re facing is an issue of whether to disclose your foreign accounts and potential past non-compliance at this point or to wait and then disclose everything when you file your Voluntary Disclosure.
The temptation is to file the tax documents as they are without disclosing anything with respect to your foreign accounts and foreign income. However, this temptation must be resisted at all costs. Let me explain why.
If you file your tax forms without the disclosure of foreign accounts and foreign income and you know that you must disclose these foreign accounts and income, then you’re doing it with knowledge; in other words, the IRS may allege that you are doing this willfully. If you are doing this willfully, then it’s going to be very hard for you to participate, later on in the Streamlined Voluntary Disclosure.
The concern that many taxpayers have with disclosing foreign accounts that even if they don’t have all the documentation is that they are afraid that the IRS will find out about it and will commence an investigation and thereby prevent any possibility of participating in a Voluntary Disclosure Program. This, of course, is a valid concern. The issue really is ‘how much time will it take to complete the Voluntary Disclosure documentation.’ If it takes three years, then yes, this is a huge concern. If it takes less, then it’s less of a concern. If it takes just two or three months, maybe half a year, you should have enough time to complete your Voluntary Disclosure.
Let’s suppose the worst-case scenario: you file your current year compliance correctly or as accurately as you could have filed it and let’s suppose that the IRS finds out about it before you could do the Voluntary Disclosure, then at the very least, you will have an argument at that point that you were trying to disclose this and this will support your non-willfulness later on during the IRS Audit.
On the other hand, if you don’t disclose anything and the IRS finds out about your prior tax non-compliance, then at that point, what you will be facing is a potentially willful situation; in other words willful penalties and maybe even Criminal Penalties.
If you would like to discuss your Voluntary Disclosure more, contact me as soon as possible; you can call me at (952) 500-8159 or you can email me at [email protected].
Thank you for watching, until the next time.
http://sherayzenlaw.com/wp-content/uploads/2018/01/sherlawltd_logo.png00adminhttp://sherayzenlaw.com/wp-content/uploads/2018/01/sherlawltd_logo.pngadmin2020-05-07 14:09:502024-08-23 18:51:36Streamlined Disclosure vs. Current Tax Compliance | SDOP Lawyer
Hello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen; I’m an International Tax Attorney, founder and owner of Sherayzen Law Office, Ltd.
Today, I would like to discuss with you one of the most fundamental concepts of US International Tax Law: US Tax Residency. Specifically, US Tax Residency for Individuals, in the context of the US Income Tax only.
When a Client comes into my office, one of the first things I want to find out about him is whether he’s considered a US Tax Resident or a US Person. For our purposes, these concepts are interchangeable.
Why is that important? If he’s a US Tax Resident, then a whole avalanche of US Tax Reporting Requirements apply to him: the Worldwide Income Requirement, the FBAR, Form 8938, 8621, 5471 etc. etc. On the other hand, if he is not a US Tax Resident, then none of these requirements would apply to him.
How do we figure out if a Client is a US Tax Resident? There are three categories of US Tax Residents. The first are US Citizens; a US Citizen is always a US Tax Resident. This is dramatically different from almost all other countries in the world except Eritrea.
In the majority of other jurisdictions, if a citizen resides outside of their country, then he’s a resident of that country, not a resident of the home country. The United States is different; if a US Citizen resides in another country, he is still a Tax Resident of the United States. He can reside on the moon; he can reside on Mars; he is still a US Tax Resident.
The second category of US Tax Residents consists of US Permanent Residents. A US Permanent Resident is always a US Tax Resident. At this point it’s important to clear up a confusion that exists regarding the concepts of US Tax Residency versus US Permanent Residency. A US Permanent Resident, as I said, is always a US Tax Resident; but a US Tax Resident can be a person who is not a US Permanent Resident and not a US Citizen. It is important to distinguish between these two concepts and not to confuse them.
Let’s turn to the final category of US Tax Residents: Foreign Persons who satisfied the requirements of the Substantial Presence Test. Under the Substantial Presence Test, a Foreign Person is considered to be a US Tax Resident if he is physically present in the United States for at least 183 days in the past three years. The calculation of the 183 days is a little bit peculiar; you take all of the days that you spend in the current year and plus 1/3 of the days you spent in the prior year, plus 1/6 of the days that you spent in the year before that.
Let’s use an example to illustrate how the Substantial Presence Test works. Let’s say Pierre, a citizen of France is sent by his company to work in the United States for one hundred twenty days in each of the years: 2014, 2015 and 2016 on an L1 Visa. We are trying to figure out whether Pierre is a US Tax Resident in the year 2016. For these purposes, we will take 1/6 of the days he spent in the United States in the year 2014 which is 120 divided by 6 = 20 plus 1/3 of the days he spent in the United States in the year 2015 which is 120 divided by 3 = 40. Forty plus twenty = 60 plus all of the days he spent in the United States in the year 2016 which is 120 days; So 120 plus 60 = 180 which is below the 183 day threshold. This means that Pierre was not a US Tax Resident in the year 2016.
I hope that this short presentation has helped you clear up this important concept of US Tax Residency. Thank you for watching, until the next time.
http://sherayzenlaw.com/wp-content/uploads/2018/01/sherlawltd_logo.png00adminhttp://sherayzenlaw.com/wp-content/uploads/2018/01/sherlawltd_logo.pngadmin2020-05-06 17:54:102024-08-23 17:52:38US Tax Residency | International Tax Lawyer
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Julius Baer & Importance of FATCA Compliance | Zurich FATCA Tax Lawyer
/in International tax attorney & lawyer Video /by adminHello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen; I’m an International Tax Attorney and owner of Sherayzen Law Office, Ltd.
Today, we are continuing our vlog from Zurich, Switzerland. We are standing in front of the Julius Baer or Baer Bank here in downtown Zurich. Julius Baer is a Multinational Private Bank which was investigated by the IRS and entered into the anti-prosecution deferral agreement with the US Department of Justice in 2016; it paid over $500 million dollars in Penalties and agreed to disclose all of its US Clients to the Department of Justice.
A bank which does not comply with US Tax Reporting Requirements, which assists US Taxpayers in hiding foreign income or foreign assets is likely to draw the wrath of the US Department of Justice and may face criminal prosecution from the US Government.
This is why it is important for Foreign Financial Institutions to stay in Compliance with FATCA and CRS. If you are a banker who is interested in developing a FATCA Compliance Program for your bank, contact me directly at (952) 500-8159 or email me at [email protected].
Thank you for watching, until the next time.
Streamlined Disclosure vs. Current Tax Compliance | SDOP Lawyer
/in International tax attorney & lawyer Video /by adminHello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen and I’m an international tax attorney and owner of Sherayzen Law Office, Ltd.
Today, I would like to discuss with you one of the most interesting problems that almost every taxpayer faces when he does a Voluntary Disclosure: the issue of current Tax Compliance. Let me explain what I mean by this.
Let’s suppose that you discovered (that) you have not filed your form 8938 or perhaps FBAR; let’s say you haven’t done that for a number of years. At this point you’re not able to obtain all the documentation necessary to complete the amended tax forms or to complete the necessary tax forms in order to file your Voluntary Disclosure. So, in essence what you’re facing is an issue of whether to disclose your foreign accounts and potential past non-compliance at this point or to wait and then disclose everything when you file your Voluntary Disclosure.
The temptation is to file the tax documents as they are without disclosing anything with respect to your foreign accounts and foreign income. However, this temptation must be resisted at all costs. Let me explain why.
If you file your tax forms without the disclosure of foreign accounts and foreign income and you know that you must disclose these foreign accounts and income, then you’re doing it with knowledge; in other words, the IRS may allege that you are doing this willfully. If you are doing this willfully, then it’s going to be very hard for you to participate, later on in the Streamlined Voluntary Disclosure.
The concern that many taxpayers have with disclosing foreign accounts that even if they don’t have all the documentation is that they are afraid that the IRS will find out about it and will commence an investigation and thereby prevent any possibility of participating in a Voluntary Disclosure Program. This, of course, is a valid concern. The issue really is ‘how much time will it take to complete the Voluntary Disclosure documentation.’ If it takes three years, then yes, this is a huge concern. If it takes less, then it’s less of a concern. If it takes just two or three months, maybe half a year, you should have enough time to complete your Voluntary Disclosure.
Let’s suppose the worst-case scenario: you file your current year compliance correctly or as accurately as you could have filed it and let’s suppose that the IRS finds out about it before you could do the Voluntary Disclosure, then at the very least, you will have an argument at that point that you were trying to disclose this and this will support your non-willfulness later on during the IRS Audit.
On the other hand, if you don’t disclose anything and the IRS finds out about your prior tax non-compliance, then at that point, what you will be facing is a potentially willful situation; in other words willful penalties and maybe even Criminal Penalties.
If you would like to discuss your Voluntary Disclosure more, contact me as soon as possible; you can call me at (952) 500-8159 or you can email me at [email protected].
Thank you for watching, until the next time.
US Tax Residency | International Tax Lawyer
/in International tax attorney & lawyer Video /by adminHello, and welcome to Sherayzen Law Office video blog. My name is Eugene Sherayzen; I’m an International Tax Attorney, founder and owner of Sherayzen Law Office, Ltd.
Today, I would like to discuss with you one of the most fundamental concepts of US International Tax Law: US Tax Residency. Specifically, US Tax Residency for Individuals, in the context of the US Income Tax only.
When a Client comes into my office, one of the first things I want to find out about him is whether he’s considered a US Tax Resident or a US Person. For our purposes, these concepts are interchangeable.
Why is that important? If he’s a US Tax Resident, then a whole avalanche of US Tax Reporting Requirements apply to him: the Worldwide Income Requirement, the FBAR, Form 8938, 8621, 5471 etc. etc. On the other hand, if he is not a US Tax Resident, then none of these requirements would apply to him.
How do we figure out if a Client is a US Tax Resident? There are three categories of US Tax Residents. The first are US Citizens; a US Citizen is always a US Tax Resident. This is dramatically different from almost all other countries in the world except Eritrea.
In the majority of other jurisdictions, if a citizen resides outside of their country, then he’s a resident of that country, not a resident of the home country. The United States is different; if a US Citizen resides in another country, he is still a Tax Resident of the United States. He can reside on the moon; he can reside on Mars; he is still a US Tax Resident.
The second category of US Tax Residents consists of US Permanent Residents. A US Permanent Resident is always a US Tax Resident. At this point it’s important to clear up a confusion that exists regarding the concepts of US Tax Residency versus US Permanent Residency. A US Permanent Resident, as I said, is always a US Tax Resident; but a US Tax Resident can be a person who is not a US Permanent Resident and not a US Citizen. It is important to distinguish between these two concepts and not to confuse them.
Let’s turn to the final category of US Tax Residents: Foreign Persons who satisfied the requirements of the Substantial Presence Test. Under the Substantial Presence Test, a Foreign Person is considered to be a US Tax Resident if he is physically present in the United States for at least 183 days in the past three years. The calculation of the 183 days is a little bit peculiar; you take all of the days that you spend in the current year and plus 1/3 of the days you spent in the prior year, plus 1/6 of the days that you spent in the year before that.
Let’s use an example to illustrate how the Substantial Presence Test works. Let’s say Pierre, a citizen of France is sent by his company to work in the United States for one hundred twenty days in each of the years: 2014, 2015 and 2016 on an L1 Visa. We are trying to figure out whether Pierre is a US Tax Resident in the year 2016. For these purposes, we will take 1/6 of the days he spent in the United States in the year 2014 which is 120 divided by 6 = 20 plus 1/3 of the days he spent in the United States in the year 2015 which is 120 divided by 3 = 40. Forty plus twenty = 60 plus all of the days he spent in the United States in the year 2016 which is 120 days; So 120 plus 60 = 180 which is below the 183 day threshold. This means that Pierre was not a US Tax Resident in the year 2016.
I hope that this short presentation has helped you clear up this important concept of US Tax Residency. Thank you for watching, until the next time.