IRS Urges Overseas Americans: File 2023 Taxes by June 17

The Internal Revenue Service (IRS) has issued a reminder to U.S. citizens and resident aliens living and working outside the United States to file their 2023 federal income tax return by Monday, June 17, 2024. This deadline also extends to those with dual citizenship. However, certain taxpayers residing in specific regions, including Israel, Gaza, or …
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Estate Planning for People With Noncitizen Spouses

No matter what your net worth or the size and shape of your family, estate planning is critical. For some, it can be relatively simple. But various factors — such as the complexity of one’s finances and certain family dynamics — can make estate planning much more complicated. Another factor that affects a certain percentage …
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IRS Guides Taxation of Foreign Trust Distributions

The IRS’s Large Business and International Division (LB&I) recently issued a “process unit” that provides guidance on determining the tax on a distribution received by a beneficiary of a foreign nongrantor trust. Process units serve as training materials for IRS staff to enhance their understanding of general tax concepts and specific transaction types. Although process …
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Time running short to report foreign accounts to IRS

If you haven’t filed a Foreign Bank Account Report (FBAR) this year, there’s still time, but not much. United States persons with a financial interest in or signature authority over one or more foreign financial accounts whose aggregate value exceeds $10,000 at any time during the calendar year must file FinCEN Form 114, also known …
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Tax Court: IRS can’t collect Sec. 6038(b) penalties via levy

Under Section 6038 of the Internal Revenue Code, some U.S. taxpayers must comply with information reporting requirements regarding their interests in certain foreign corporations and partnerships. In the recent case of Alon Farhy v. Commissioner, the U.S. Tax Court was tasked with deciding whether the IRS can assess failure-to-file penalties in relation to Sec. 6038. Forms Not …
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IRS: Longer Period for Single-Country Documentation

The IRS recently announced through Notice 2023-31 that it will provide a longer transition period for the documentation requirement when the single-country exception to the source-based attribution requirement in the proposed foreign tax credit regulations is finalized. The amended transition period will provide that the required license agreement must be executed no later than 180 …
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New Treasury regs to implement Corporate Transparency Act

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) in September 2022 issued final regulations implementing the Corporate Transparency Act (CTA). The law requires certain business entities created or registered to do business in the United States to report identifying information about their “beneficial owners” to FinCEN. Recently, FinCEN issued frequently asked questions (FAQs) on these …
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Form BE-12 due for companies with 10%+ foreign ownership

Deadline to file is May 31 The BE-12 form is a survey conducted by the U.S. Department of Commerce’s Bureau of Economic Analysis (BEA) to collect information on the activities of foreign-owned U.S. companies. This survey is conducted every five years – including 2023 — and is used to gather data on the operations, finances, …
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IRS issues final foreign tax credit regs

Both the United States and foreign countries may tax the foreign source income of U.S. taxpayers. To ease this double taxation burden, the Internal Revenue Code permits most U.S. taxpayers who pay income taxes to a foreign country to either deduct the taxes from gross income for U.S. purposes or credit them dollar for dollar against …
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In the courts: FBAR penalties and the full payment rule

In the recent case of Mendu v. United States, the U.S. Court of Federal Claims handed down a decision regarding whether penalties assessed for failure to file a FinCEN Report 114, “Report of Foreign Bank and Financial Accounts” (FBAR) are subject to the full payment rule. The result of the case sheds some light on this often-misunderstood …
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