On 13 December 2016, the Department of Treasury and Internal Revenue Service (“IRS”) issued final regulations creating reporting and record keeping requirements for US disregarded entities owned by non-US person. A disregarded entity is any entity with a single owner and is disregarded from its owner for US tax purposes. The IRS realized that US…
DetailsThe article was first published in Global Tax Weekly, issue 170. Below is the full text of the seventh article in the series on US taxes for US persons living outside the US. US Tax Compliance And Planning For US Executives, Entrepreneurs And Investors Living Outside The US by Stephen Flott, Omar Saleh, and Louisa…
DetailsFurther to our June 8th, 2014 email regarding the June 3rd, 2014 announcement by the Commissioner of the Internal Revenue Service that changes to the Offshore Voluntary Disclosure Program (OVDP) and Streamlined Compliance Procedure (SCP) were under development, we are pleased to report that yesterday, the Service published changes to the SCP that substantially improve…
DetailsIn late May, the IRS published the first list of the Foreign Financial Institutions (“FFI”) that have applied for and received Global Intermediary Identification Numbers (“GIIN’s”). The list is searchable at the IRS website. According to the IRS, the list will be periodically updated. Recipients of W-8BEN-E’s are now able to independently verify whether an FFI that…
DetailsThe Net Investment Income Tax (NIIT) went into effect January 1, 2013, affecting tax years beginning on or after January 1, 2013. The NIIT applies to US persons with modified adjusted gross income above the following thresholds: $125,000 for filing status married filing separately; $200,000 for filing status single or head of household; and $250,000…
DetailsLast Thursday the IRS published an FBAR Reference Guide that clients will find helpful in explaining various aspects of the Foreign Bank Account Reporting regime, including key definitions and requirements. FBARs for 2013 are due no later than 30 June 2014 and must be filed electronically. Paper forms are no longer accepted. There is no…
DetailsOn March 28, 2014, the IRS released the final version of the W-8BEN-E. The W-8BEN-E is an important step in enforcing FATCA, and replaces the W-8BEN for non-US entities receiving payments from US payors. The purpose of the W-8BEN-E for non-US entities to certify their FATCA status. However, it is still the responsibility of the US payor to request the…
DetailsLast Wednesday, the US Treasury and IRS announced that jurisdictions that have reached agreements in substance with the US on the provisions of intergovernmental agreements under the Foreign Account Tax Compliance Act (“FATCA”) will be treated as having agreements in effect until December 31, 2014.
DetailsGenerally, receiving a tax credit is more beneficial to a taxpayer than a deduction from income taxes. A tax credit provides a dollar for dollar reduction in current income tax liability. If a taxpayer excludes amounts from his or her earned income under the foreign earned income exclusion, then the taxpayer cannot receive a foreign tax credit or deduction for taxes on the income that were excluded under the foreign earned income exclusion. It will be important for the taxpayer to determine whether he or she is in a better position receiving the foreign earned income exclusion or receiving the foreign tax credit applicable to the foreign earned income.
DetailsOn March 10th, 2014, we had an opportunity to hold a follow up telephone discussion with the IRS about the Steamlined Filing Compliance Procedures for Non-Resident, Non-Filer US Taxpayers (SCP) introduced in June 2012. Readers of this blog will recall that we voiced several concerns about the SCP in a letter addressed to David Horton…
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