The American taxpayer has now been put in a full disclosure position by the IRS

New I.R.S. program granting Amnesty from criminal tax prosecution for offshore delinquent taxpayers

 New United States tax laws require strict reporting of foreign assets and establish a new program granting Amnesty from criminal tax prosecution for offshore delinquent taxpayers.

This article is in two portions. The first portion considers the Amnesty program for unreported foreign income and the second portion considers the Foreign Asset Reporting Requirements.

Read full article online by Richard S. Lehman, Esq.

The I.R.S. has gone global

Foreign Financial Institutions – Reporting and Withholding United States Taxes

The New Law generally requires Foreign Financial Institutions (FFIs) to provide information to the Internal Revenue Service (IRS) regarding the Foreign Financial Institutions’ United States accounts (U.S. accounts). It also requires certain Nonfinancial Foreign Entities (NFFEs) to provide information on their substantial United States owners (substantial U.S. owners).

The New Law requires that United States payors vs. Withholding Agent that make payments to Foreign Financial Institutions and Non Financial Foreign Entities to withhold the taxes payable by any U.S. persons who may be responsible for taxes to the United States on these payments.

The law takes a second step and imposes the same withholding tax on certain Foreign Financial Institutions for payments those institutions make to certain accounts that are owned by U.S. taxpayers or presumed to be owned by U.S. taxpayers.  Read full article by Richard S. Lehman, Esq.

New IRS Amnesty Program update

PART 1: New U.S. Tax Laws for 2011, 2012 and 2013


PART 2: Focus on the New IRS Amnesty Program, Foreign estates and foreign trusts, Specified Foreign Financial Assets

Americans now required to disclose all foreign financial assets

The Foreign Account Tax Compliance Act (FATCA)

A little known new law was enacted for the year 2011 that requires, that once certain minimum amounts are exceeded, any specified person that holds any interest in a specified foreign financial asset during the taxable year to attach a statement to that person’s U.S. tax return and report information that identifies the value of those specified foreign financial assets in which the individual holds an interest. Form 8938.

Specified foreign financial assets include financial accounts maintained by foreign financial institutions, as well as certain other financial assets or instruments. An asset or instrument may be a specified foreign financial asset even if the asset or instrument does not have a positive value.

A specified foreign financial asset is (i) any financial account maintained by a foreign financial institution; (ii) any stock or security issued by any person other than a United States person; (iii) any financial instrument or contract held for investment that has an issuer or counterparty that is not a United States person; and (iv) any interest in a foreign entity.

A specified person is defined as a specified individual who is a U.S. citizen, a resident alien or a nonresident who elects to be taxed as a U.S. resident filing Form 1040; and U.S. entities required to file an annual tax returns such as a 1041 (Trust and Estate), 1120 (U.S. Corporation), 1120-S and 1065 (Partnership).

A specified person that is the owner of an entity disregarded as an entity separate from its owner is treated as having an interest in any specified foreign financial assets held by the disregarded entity. In addition, a specified person that is treated as the owner of a trust or estate or any portion of a trust under certain sections of the Internal Revenue Code is treated as if that person holds an interest in any specified foreign financial assets held by the trust or estate or by the portion of the trust or estate that the specified person owns. READ FULL ARTICLE BY RICHARD S. LEHMAN