In my last blog entry I described how a virtually unknown Treasury agency, the Financial Crimes Enforcement Network, has issued proposed regulations that would change the offshore investment reporting requirements for U.S. taxpayers. The rules are slated to become effective well before the June 30, 2010 filing deadline for Treasury Form TD F 90-22.1, the “foreign bank account reporting” form, or FBAR. That means they would apply retroactively to 2009.
The U.S. Department of State (DOS) estimates that more than six million U.S. citizens live outside the United States. But no one knows for certain—and it's likely the numbers are higher than the DOS estimate
In my last column I recounted a recent sleepless night in which I reviewed President Obama’s revenue proposals for the 2011 budget, in a dense document with the picturesque name of the Greenbook . I focused on the Treasury’s proposals to “Combat Under-Reporting of Income on Accounts and Entities in Offshore Jurisdictions.” And I described these proposals as sort of a root canal, but on your money, not your mouth. Here’s a summary of the remaining proposals in the Greenbook along these lines: “Extend Statute of Limitations for Significant Omission of Income Attributable to Foreign Financial Assets.” This proposal is similar to a provision in H.R.
Yes, I know you think it belongs to you. But, Obama and his inside-the-beltway friends know better than you what to do with your money. And, after all, they really need it. You know, with a projected $1.6 trillion deficit and all that. On February 1, the Obamites released their financial fiasco for fiscal year 2011, otherwise known as the proposed federal budget. A key portion of the budget is the revenue proposals, contained in a document referred to as the Greenbook , because—surprise! —It’s printed with a green cover. If you suffer from insomnia, download the Greenbook from the Treasury Web site and spend a few hours looking it over. You’ll save on your Ambien prescription. And, you’ll gain fascinating insights into vital national priorities like the “Inland Waterways Trust Fund.” But I digress. The real point of the Greenbook is to outline how the Obamites’ plans on how they intend to forcibly extract money from you, a concept otherwise know as “taxation.” Think of it as sort of a root canal, but on your money, not your mouth. Since my consulting practice focuses on international tax, I spent a recent sleepless night reading up on the Treasury’s modest proposals to “Combat Under-Reporting of Income on Accounts and Entities in Offshore Jurisdictions.” Here’s a summary—in as plain English as I can muster—of their proposals. “Require Increased Reporting on Certain Foreign Accounts.” Basically, this would impose a 30% tax on many types of U.S-source income to foreign financial institutions (FFIs). The definition of a FFI is very broad, and includes “certain entities engaged primarily in the business of investing, reinvesting, or trading in securities, partnership interests, commodities, or any interests in the foregoing.” In any words, “hedge funds.” And that’s not all. The rules “would be designed so as not to disrupt ordinary and customary market transactions.” Well, of course! H.R.
If you’re an American, one of the best ways to internationalize your pension or retirement plan is to use it to purchase offshore investments, including offshore real estate. It’s perfectly legal under U.S.
I just returned from a conference in San Antonio sponsored by the American Bar Association’s Section on Taxation. I attended this conference to learn more about plans the Department of Justice (DOJ) and the IRS have going forward in their anti-offshore vendetta, and how the financial institutions and nations affected by it are likely to react.
2010 will bring many surprises from the IRS, most of them unwelcome. You can expect more audits, a crackdown on anyone the IRS considers “wealthy,” and most ominous of all, much higher payments to IRS informants. And of course, dozens of bills before Congress would escalate the “war on wealth” to even greater heights.
As the global economic debacle continues to escalate, more and more frankly whacked out ideas are coming to the forefront. I wrote about one of these ideas— a “tiny tax” on all foreign exchange transactions —a few weeks ago. Now, the Swiss Bankers Association —an organization that should frankly, know better—has come up with an even more revolutionary proposal. It’s for a universal withholding tax to begin in Switzerland, but that could gradually be expanded to other international financial centers
You might, if you’re a U.S. citizen or permanent resident, and want to spare your heirs from paying estate tax at a rate as high as 55%. But don’t make your funeral arrangements just yet. Congress might change the law before the estate tax temporarily expires in 2010. In 2001, Congress radically retooled federal wealth transfer tax laws
div xmlns=”http://www.w3.org/1999/xhtml”pThe United States is one of only two countries that imposes tax on a citizen’s worldwide income, no matter where that citizen lives. (The other country is, of all places, emEritrea/em.) /ppFor citizens of most high-tax countries, it’s easy to legally avoid the obligation to pay tax on your worldwide income. You simply relocate to a lower-tax jurisdiction, or one that only taxes local income. After an extended period—normally 1-2 years—you become “non-resident” for tax purposes. You no longer have the obligation to pay tax on your worldwide income to the country that issued your passport. You may, however, still be subject to gift and estate taxes. /ppBut not the USA. To permanently disconnect from the obligation to pay U.S. income tax, U.S. citizens must not only leave the United States. They must also take the radical step of giving up U.S
