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IRS Reminds Taxpayers of OVDP Ending

IRS Reminds Taxpayers of OVDP Ending and Hints at Updated Procedures Earlier this year the IRS announced that the OVDP would end on September 28th and the IRS issued a reminder to taxpayers last week of the program ending. More importantly the IRS states that it will maintain a pathway for such taxpayers to come … Read more

Late Filed Foreign Earned Income Exclusion

Contents1 Foreign Earned Income Exclusion – Late Elections2 Facts3 Foreign earned income exclusion – timely filing requirement4 Analysis Foreign Earned Income Exclusion – Late Elections Can the foreign earned income exclusion be elected on a late-filed return? Redfield v. Comm’r, T.C. Memo 2017-71 (T.C. April 26, 2017) answers this question. Facts Below are the facts … Read more

U.S. Tax on Australian Superannuation Funds

Contents1 U.S. Tax on Australian Superannuation Funds2 Classification of Australian supers for U.S. tax purposes3 Is the growth in a superannuation taxable in the U.S.?4 How are Australian supers taxed on distributions in the U.S.?5 Required international information reporting forms U.S. Tax on Australian Superannuation Funds An Australian superannuation fund is a partly compulsory pension … Read more

FBAR Compliance for U.S. Entities

FBAR Instruction Guide for U.S. Entities

U.S. Person

For FBAR compliance purposes, a “U.S. person” includes U.S. citizens, U.S. residents, and entities which include corporations, partnerships, limited liability companies, trusts, and estate formed under the laws of the United States. Such entities must file FBARs if they have financial interest in a bank, securities or other financial account located in a foreign country.

Financial Interest: Owner of record or holder of legal title

A domestic entity has a financial interest in a foreign financial account for which the entity is the owner of record or has legal title, regardless of whether that account is maintained for its benefit or the benefit of another.

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U.S. Shareholder and CFC Status

Contents1 U.S. Shareholder and Controlled Foreign Corporation Status2 What is a controlled foreign corporation?3 Is there constructive ownership?4 Why does this matter? U.S. Shareholder and Controlled Foreign Corporation Status It is often the case that a U.S. shareholder of a foreign corporation jointly owns the entity with other family members. The constructive ownership rules under … Read more

Streamlined Foreign Offshore Procedures

IRS Streamlined Foreign Offshore Procedures

The streamlined foreign offshore procedures (SFOP) are part of the streamlined filing compliance procedures.

Unlike the streamlined domestic offshore procedures, there is no 5% misc. offshore penalty assessed on a streamlined foreign offshore procedures filing.

U.S. taxpayers eligible to use these procedures will file delinquent or amended returns, together with all required international information returns (Forms 3520, 3520-A, 5471, 5472, 8938, 926, or 8621), for the past three years and will file delinquent Report Of Foreign Bank & Financial Accounts (FBAR) (FinCEN Form 114) for the past six years.

Qualified filers must submit the above along with a signed certification statement attesting that the failures above resulted from non-willful conduct.

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