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Washington DC Tax Law Blog

Financial interest/signature authority & foreign accounts

The Report of Foreign Bank and Financial Accounts (FBAR) might not be on your radar, but maybe it should be. FBARs, technically FinCEN Form 114, are used to disclose foreign accounts valued at $10,000 or more at any point in a year.

While the international account disclosure requirement has been around for 45 years since the enactment of the Bank Secrecy Act, it has only recently gotten significant attention. What type of interest or authority triggers the need to file a FBAR?

Passive foreign investment company reporting: avoiding pitfalls

International tax compliance has become so complicated it sometimes seems like a constant crossword puzzle of acronyms and obligations. If you live abroad, have foreign accounts, or meet other criteria, the intricacies of FATCA, FBAR, FinCen, Form 8938 are in play, carrying the potential to trip you up.

In this post, we will use a Q & A format to inform you about a reporting requirement that is not as well known as some of the others but is equally dreaded: Form 8621 for passive foreign investment companies.

Taxes and green card holders

Competing laws can make for confusing situations. For many people in the Washington, D.C., area, trying to find the balance becomes something of a way of life. This may be particularly true for green card holders who have financial ties that reach around the globe.

On one hand, the current political turmoil over immigration makes for an unsettling environment for foreign nationals working here. Still, they face expansive tax obligations that cannot be ignored. Failure to meet those obligations could cost the loss of a green card. On the other hand, if they decide to abandon their green cards, they may face obligations by virtue of other tax laws. It should be no surprise, then, that many find themselves in disputes with the IRS.

How to Survive an Audit From the IRS

A tax audit is essentially an accounting procedure that examines your financial records to ensure you filed your tax return accurately. If the IRS finds errors or purposeful mis-reportings, you'll have to pay the recalculated return amount and any interest. The IRS can choose to audit your tax return for a number of reasons, including:

OFAC Trade Sanctions as a Compliance Tool

Late last month Treasury Secretary Steven Mnuchin announced what he said was one of the largest sanctions actions every taken by Treasury's Office of Foreign Assets Control (OFAC).

The sanctions are aimed at 271 employees of the agency of the Syrian government believed to have been involved in chemical weapons attacks. These individuals are now blocked from financial transactions involving U.S. citizens, permanent residents or companies.

5 FAQs on tax compliance for expats

Living outside the U.S. can have many benefits, both cultural and financial. But in terms of complying with U.S. tax laws, expatriates carry more burdens, not fewer, than taxpayers who live in the U.S.

In this post, we will use a Q & A format to address the issue of tax compliance for U.S. citizens who live abroad.

The foreign earned income exclusion: a Q & A

In recent posts, we've explored how maintaining compliance with rules for offshore accounts has become increasingly burdensome in recent years. These burdens include stepped-up enforcement of existing requirements and the implementation of a complicated new law, the Foreign Account Tax Compliance Act (FATCA).

There is another aspect to foreign income reporting, however, that also merits attention: the foreign earned income exclusion.

Every Tax Problem Has A Solution

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