International Tax Blog

88% of Expatriates Have a Net Worth of Less than $2 Million

On September 28, 2020, the Treasury Inspector General for Tax Administration (“TIGTA”) issued a report on the IRS’s Enforcement regarding expatriates. In the report, TIGTA provided a graph showing the number of the names of expatriates published in the Federal Register from 2008 to 2018. If you add up the numbers for these 11 years, the total is 30,507. Interestingly, TIGTA then indicates that the IRS has an expatriate database which includes 41,058 records from... Read more →

FBAR Reporting For Indirectly Owned Foreign Bank Accounts

For years I have been unsure how to report a foreign bank account on an individual’s FBAR (FinCEN Form 114) when the account is owned by a foreign entity and the individual owns more than 50% of the foreign entity. For example, if a US citizen individual owns 100% of a controlled foreign corporation (“CFC”), and the CFC has a foreign bank account, the US citizen individual is treated as having a financial interest in... Read more →

A Tax Attorney Uses Python

Two years ago today I started studying the Python programming language. I had heard how Python is supposed to be an easy language to learn, and I thought it might be useful. Here is a sampling of the ways that I have used Python: Checking for errors on my website Scraping IRS and other web pages Automating tasks Searching my client files Searching my database of tax authorities Summarizing information to study/review Checking for Website... Read more →

New IRS Practice Unit: Foreign Earned Income

Yesterday the IRS published a new practice unit titled “Foreign Earned Income for Purposes of IRC 911.” This practice unit discusses "foreign earned income" for purposes of Code §911, and rounds out the 10th practice unit on the foreign earned income exclusion ("FEIE"). The IRS now has the following practice units on the foreign earned income exclusion: Foreign Earned Income (2020) Physical Presence Test (2017) Bona Fide Residence Test (2015) Calculating the FEIE - Employee... Read more →

2020 Second Quarter Published Expatriates – Second Highest Quarterly Number Ever

Last week the Treasury Department published the names of individuals who renounced their U.S. citizenship or terminated their long-term U.S. residency (“expatriated”) during the second quarter of 2020. The number of published expatriates for the quarter was 2,406, which is the second highest quarterly number ever, with the first quarter of this year being the highest quarter ever. Therefore, 2020 is currently on track to have the highest number of published expatriates ever. See the... Read more →

U.S. Partnerships Owning CFCs

It has been over a year since the final GILTI regulations were published. The GILTI rules for domestic partnerships in the final regulations were dramatically different than in the proposed regulations. In general, a domestic partnership that owns a CFC does not have a GILTI inclusion amount. However, a partner in the domestic partnership may have a GILTI inclusion amount if the partner is a U.S. shareholder of the CFC (typically meaning that the partner... Read more →

Famous Tax Quotes – No Rational Person . . .

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: [N]o rational person would incur indebtedness of $41.5 million to acquire stock that he already owned free and clear. [4th Circuit, quoting the Tax Court] Estate of Kechijian v. Commr., 125 AFTR 2d 2020-2579 Read more →

Famous Tax Quotes – Backdating of Documents

Continuing our series on Famous Tax Quotes (quotes from court opinions and rulings with language that is colorful or that concisely states an important tax principle) today's tax quote is: 2. Backdating and “Effective As of” Dating of Documents Petitioners have admitted that one of the critical documents in the record was backdated. Although petitioners explain the backdating as a matter of convenience, the fact that any backdating occurred suggests a willingness to manipulate the... Read more →

New IRS Practice Units: Reasonable Cause and Good Faith & FTC Limitation

The IRS recently published two new practice units related to international tax: Reasonable Cause and Good Faith and FTC Limitation. The first practice unit discusses the reasonable cause exception for penalty relief. The second practice unit discusses the foreign tax credit limitation for individuals. Foreign tax credits are generally limited to the U.S. tax on foreign income. We have added these practice units to our Practice Units By Topic page. Read more →

Average Price of U.S. Real Estate Sold -- By Country

Yesterday the IRS Statistics of Income Division released 2017 data for Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests. When a foreign person disposes of U.S. real property, the buyer is required to file Form 8288-A. The IRS release breaks out the following data by country: The number of forms filed, The total sales, and The Federal income tax withheld. The average sale price per property for each... Read more →