You may have seen a post like the one below and concluded that the IRS had eased FATCA enforcement for everyone. That is NOT true. During the American Bar Association Section of Taxation meeting in Washington, DC from May 8th through 10th, senior officials of the IRS explained that the announcement made public on Friday, May…
DetailsCompensation clawbacks, where employers recoup compensation, e.g., incentive bonuses, to rectify violations of rules or policies, have received much press since the Great Recession of 2008, and a number of well-publicized financial scandals, such as the J.P. Morgan “London Whale” incident. The Dodd-Frank Wall Street Reform and Consumer Protection Act (2010) (“Dodd-Frank”) dramatically increased the incidents of clawbacks, and, thus, the importance of their federal income tax treatment
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.
DetailsOn March 25, 2014, the Internal Revenue Service issued Notice 2014-21, describing how existing tax principles apply to transactions using virtual currency, in the form of questions and answers. The ruling is not surprising, but is informative in many respects. This article addresses the tax implications of this Notice, and not the advantages and disadvantages…
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.
DetailsMarch has started well in the Treasury Department’s ongoing efforts to implement FATCA. The Treasury Department inked two more FATCA intergovernmental agreements (IGA’s) on March 5, 2014. Importantly, Chile has signed an IGA, the first country in South America. The Finnish IGA agreement is based on the Model 1A treaty and requires Finnish financial institutions…
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…
DetailsUS persons who have ownership interests in foreign corporations, or who are directors or officers of foreign corporations, are subject to special reporting rules. The first article of this series provided the general reporting requirements under Form 5471; the second article of this series about the reporting requirements of “Category 2 Filers”, which are the…
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