IRS Streamlined Procedures

Form 5471 Categories of Filers Form 5471 Categories of Filers: There are 5 Form 5471 Categories of Filers. TheForm 5471 is used to report foreign corporations to the IRS .  Technically, the form is referred to as the Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The Form is generally due to be filed by U.S. taxpayers at the time their tax return is due. Even if a person is not required…
Form 3520 & Instructions: Foreign Gift from Entity, Individual & Trusts Form 3520 & Instructions: The IRS Form 3520 (2020) is used to report a foreign gift, inheritance or trust distribution from a foreign person to the IRS. It does not have to be a “Foreign Gift.” Rather, if a foreign person gifts U.S. property – there may be a Form 3520 reporting requirement as well. The Form 3520 complexity is a sliding scale. On…
Foreign Trust (Rev. Proc. 2020-17 New Reporting Exceptions) Reporting Foreign Trusts: Rev Proc 2020-17 Retirement & Non-Retirement Tax Favored Trusts. The IRS reporting foreign trusts rules and requirements are extremely complicated, but the IRS is working to reduce the complexities of certain reporting for U.S. Persons who own foreign trusts. What makes foreign trust reporting especially hard, is that there are so many different types of overseas trusts, depending on which foreign country the trust…
Subpart F Income: CFCs, US Shareholders & Foreign Earnings Subpart F Income: The IRS Rules for Subpart F Income, CFC, and U.S. Shareholder Foreign Earnings analysis is very complicated. Essentially, Subpart F Income is involves CFC (Controlled Foreign Corporations) that accumulate certain, specific types of income (primarily passive income). When a CFC has Subpart F income under IRC Section, that means the U.S. shareholders may have to pay tax on the earnings. The…
Reasonable Cause vs Streamlined-What’s the Difference? Reasonable Cause vs Streamlined: The Reasonable Cause vs Streamlined Filing IRS Submission analysis is very complicated. The Streamlined Procedure (Domestic or Foreign) is an IRS program developed in 2014 as a stand-alone alternative to OVDP. This offshore program was developed specifically to assist non-willful taxpayers with safely getting into international tax and reporting compliance. This program came at a crucial time, in light of the aggressive
Willful vs Non-Willful: Evaluating Taxpayer Non-Compliance (2020) Willful vs. Non-Willful: Analyzing willful vs. non-willful is a complex undertaking. The IRS has not issued a bright-line test to determine if a person qualifies as non-willful with respect to offshore disclosure. The analysis of determining whether a person qualifies as willful or non-willful, is a very detailed evaluation. When determining whether a taxpayer is willful vs. non-willful, and should submit to either the streamlined procedures or…
How to Avoid the IRS Assessing Multiple Non-Willful FBAR Penalties IRS Assesses Multiple Non-Willful FBAR Penalties:  The IRS Assesses Multiple Non-Willful FBAR Penalties in some, but not all non-compliance tax situations. The Streamlined Program and Reasonable Cause are two effective methods for legally avoiding multiple non-willful FBAR penalties.  In recent years, the IRS has increased the aggressive enforcement of foreign accounts compliance and unreported foreign income. The Internal Revenue Service may issue non-willful…
Form 5471 Delinquent Filing Penalty & Late Filing Abatement Form 5471 Delinquent Filing Penalty: Late Filing Abatement: The Form 5471 Delinquent Filing Penalty can be pretty rough. And, since the IRS 5471 form is one of the most complicated International tax reporting forms required for taxpayers, it can can  all get pretty overwhelming for taxpayers, pretty quickly. The 5471 is an IRS international reporting form used to report ownership in foreign corporations (aka Information Return…
Form 3520 Late Filing Penalty & Abatement (IRS Summary 2020) Form 3520 Late Filing Penalty: The Form 3520 Late Filing Penalty is extremely disproportionate to the “violation.” Sometimes (and oftentimes) it is simply a gift from a foreign parent to a U.S. person. The U.S. person is unaware that the gift must be reported to the IRS, so the form 3520 is never filed.  Most of the time, there is no unreported income…
FATCA Insurance Policy Reporting on Form 8938 FATCA Insurance Policy Reporting on Form 8938: The FATCA Insurance Policy Reporting on Form 8938 requirements by the IRS for individuals can range from relatively straightforward, to the complex. FATCA is the Foreign Account Tax Compliance Act. Starting in 2012 when individuals file their 2011 tax return, the form 8938 was introduced. When filers have certain specified foreign financial assets, and they meet the threshold requirements for…