The Tax Dabble Trap sort of flows into the next trap; the Tax Law Uniformity Trap. In the same way the Business Lawyer believes he may be competent enough to advise on International Tax Law, he might think that there is no difference between US International Tax Law and US Domestic Law. For that person, that Lawyer, there’s only Tax Law and this is not correct.
This is exactly what the Tax Law Uniformity Trap is: the assumption that US Domestic Law and US International Tax Law are the same and this is false.
Let me give you sort of an analogy; think about pies. If you were to look at the US Domestic Tax Law, that’s your baked dough, that bottom part of the pie and International Tax Law is a big level of thick rich cream on top of that pie. There is a deep inter-relationship between the two. International Tax Law is obviously part of the overall US Tax Law but International Tax Law is different, it has a different structure, different texture, different taste if you wanted to continue this analogy.
It’s important to remember that Tax Consequences on the International level may not be the same as Tax Consequences on the US level.
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There’s also a belief that a Foreign Client who owns a US Corporation is in the same position as a US Client who owns a Domestic Corporation, which is also false.
I think everyone probably knows here that an S Corporation cannot be owned by a foreign person.
There’s also such an interesting form called a Form 5472, just to give you an example, which requires the Domestic Corporation to report certain transactions between the corporation and the 25% or more foreign owner(s) of that corporation and there’s a $10,000 penalty associated with the form for not filing it and which can go up to $50,000.
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Let’s say that the Business Lawyer understands that he shouldn’t be advising on International Tax Law issues himself; let’s say that he understands that he shouldn’t be dabbling in International Tax Law. Let’s say that he understands this: the difference between US Domestic Law and US International Tax Law.
Then the next question is: Did he choose the right advisor? Now we’re getting into the fourth: the tax professionals equality trap which is basically an assumption that ‘all US Tax Practitioners are equally competent to advise on US International Tax Laws’.
Remember that pie that I described about the difference between them? Let’s put it this way: In the US, the great majority, more than 95% of US Tax Accountants never get out of the baked crust. They don’t know about the thick huge level of cream on top of that pie which is called US International Tax Law; they don’t know about it. So, one of the biggest problems that I’ve seen is when Business Lawyers bring in US Accountants into advising on something like this.
I can tell you that 90% of my cases, of my Offshore Voluntary Disclosure cases come after an Accountant already advised on that case; 90%, that’s a horrific percentage. The clients were trying to do what they were thinking they should be doing.
But it’s that the Accounting Profession operates in a different way; the Accounting Profession operates in a different model. You have to really get to the top of the top of the Accounting Profession before you start getting Accountants who know about this, about US International Tax Law. If you think about it, how do Accountants make their money? By adopting an individualized customized approach to tax returns? No; by turning out as many tax returns as possible within the given time, because they have to standardize, otherwise they won’t get out as many tax returns and their profits will go down.
Lawyers operate in a different way. We charge hourly; so, for us customization, specialization, individualization of the case- that’s very important. We look at each individual and each company and look at that specific set of circumstances and we analyze that set of circumstances. We think about what could happen to that client; what are the requirements that may apply to him? How can we avoid the penalties? How can we structure that particular transaction better?
I can tell you, unfortunately that’s not the case for most of the Accountants, even if they think they are doing that.
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International Tax Lawyers San Diego | Tax Law Uniformity Trap
/in International tax attorney & lawyer Video /by adminThe Tax Dabble Trap sort of flows into the next trap; the Tax Law Uniformity Trap. In the same way the Business Lawyer believes he may be competent enough to advise on International Tax Law, he might think that there is no difference between US International Tax Law and US Domestic Law. For that person, that Lawyer, there’s only Tax Law and this is not correct.
This is exactly what the Tax Law Uniformity Trap is: the assumption that US Domestic Law and US International Tax Law are the same and this is false.
Let me give you sort of an analogy; think about pies. If you were to look at the US Domestic Tax Law, that’s your baked dough, that bottom part of the pie and International Tax Law is a big level of thick rich cream on top of that pie. There is a deep inter-relationship between the two. International Tax Law is obviously part of the overall US Tax Law but International Tax Law is different, it has a different structure, different texture, different taste if you wanted to continue this analogy.
It’s important to remember that Tax Consequences on the International level may not be the same as Tax Consequences on the US level.
International Tax Lawyers Des Moines | Special Treatment of Foreign Owners of a US Corporation
/in International tax attorney & lawyer Video /by adminThere’s also a belief that a Foreign Client who owns a US Corporation is in the same position as a US Client who owns a Domestic Corporation, which is also false.
I think everyone probably knows here that an S Corporation cannot be owned by a foreign person.
There’s also such an interesting form called a Form 5472, just to give you an example, which requires the Domestic Corporation to report certain transactions between the corporation and the 25% or more foreign owner(s) of that corporation and there’s a $10,000 penalty associated with the form for not filing it and which can go up to $50,000.
International Tax Attorney New York | Why an International Tax Lawyer is Superior to An Accountant
/in International tax attorney & lawyer Video /by adminLet’s say that the Business Lawyer understands that he shouldn’t be advising on International Tax Law issues himself; let’s say that he understands that he shouldn’t be dabbling in International Tax Law. Let’s say that he understands this: the difference between US Domestic Law and US International Tax Law.
Then the next question is: Did he choose the right advisor? Now we’re getting into the fourth: the tax professionals equality trap which is basically an assumption that ‘all US Tax Practitioners are equally competent to advise on US International Tax Laws’.
Remember that pie that I described about the difference between them? Let’s put it this way: In the US, the great majority, more than 95% of US Tax Accountants never get out of the baked crust. They don’t know about the thick huge level of cream on top of that pie which is called US International Tax Law; they don’t know about it. So, one of the biggest problems that I’ve seen is when Business Lawyers bring in US Accountants into advising on something like this.
I can tell you that 90% of my cases, of my Offshore Voluntary Disclosure cases come after an Accountant already advised on that case; 90%, that’s a horrific percentage. The clients were trying to do what they were thinking they should be doing.
But it’s that the Accounting Profession operates in a different way; the Accounting Profession operates in a different model. You have to really get to the top of the top of the Accounting Profession before you start getting Accountants who know about this, about US International Tax Law. If you think about it, how do Accountants make their money? By adopting an individualized customized approach to tax returns? No; by turning out as many tax returns as possible within the given time, because they have to standardize, otherwise they won’t get out as many tax returns and their profits will go down.
Lawyers operate in a different way. We charge hourly; so, for us customization, specialization, individualization of the case- that’s very important. We look at each individual and each company and look at that specific set of circumstances and we analyze that set of circumstances. We think about what could happen to that client; what are the requirements that may apply to him? How can we avoid the penalties? How can we structure that particular transaction better?
I can tell you, unfortunately that’s not the case for most of the Accountants, even if they think they are doing that.