by Fresh Start Tax | Mar 20, 2014 | Tax Help
FBAR, FATCA Compliance -Tax Attorneys, Tax Lawyers , CPAs 1-866-700-1040
Now is the time to move forward because Big Brother is watching, they have signed treaties, sharing international information and are about to drive a stake through the heart of financial pocketbooks with the fear of prison time.
The law and numbers are on there side.
The Department of Justice and the Internal Revenue Service in the last three years has collected over $6 billion in offshore funds hidden and disguised in financials institutions overseas.
Within the last year there will be sweeping changes in the International financial markets as countries are sharing their data with most governments.
Governments plan to empty the pocketbooks of taxpayers and persons who have been hiding in disguising their money and they plan to attack them with large penalties and some of them in the hotel fed.
The New Program – International Data Exchange Service:
The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States.
The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.
The International Data Exchange Service:
1. Is based on business requirements collected by a multilateral working group
Serves as a single point of FATCA information delivery for both FIs and HCTAs,
2. May be used for automatic exchange with all FATCA jurisdictions,
3. Is based on readily-available mature technology,
4. Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
5. Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.
I cannot stress the urgency of moving forward quickly.
As a general rule if you contact the proper government agency first, it is very likely there will be no criminal prosecution, not guaranteed of course, but the likelihood is on your side.
Some information you should know:
Report of Foreign Bank and Financial Accounts (FBAR)
If you have a financial interest in or signature authority over a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, exceeding certain thresholds, the Bank Secrecy Act may require you to report the account yearly to the Internal Revenue Service by filing electronically a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR). See the ‘Who Must File an FBAR’ section below for additional criteria.
Current FBAR Guidance FinCEN introduces new forms
On September 30, 2013, FinCEN posted, on their internet site, a notice announcing FinCEN Form 114, Report of Foreign Bank and Financial Accounts (the current FBAR form).
FinCEN Form 114 supersedes TD F 90-22.1 (the FBAR form that was used in prior years) and is only available online through the BSA E-Filing System website.
The system allows the filer to enter the calendar year reported, including past years, on the online FinCEN Form 114.
It also offers an option to “explain a late filing,” or to select “Other” to enter up to 750-characters within a text box where the filer can provide a further explanation of the late filing or indicate whether the filing is made in conjunction with an IRS compliance program.
On July 29, 2013, FinCEN posted a notice on their internet site that introduced a new form to filers who submit FBARs jointly with spouses or who wish to have a third party preparer file their FBARs on their behalf.
The new FinCEN Form 114a, Record of Authorization to Electronically File FBARs, is not submitted with the filing but, instead, is maintained with the FBAR records by the filer and the account owner, and made available to FinCEN or IRS on request.
Filing deferral for certain individuals with signature authority only, effective through June 30, 2015
FinCEN Notice 2013-1 extended the due date for filing FBARs by certain individuals with signature authority over, but no financial interest in, foreign financial accounts of their employer or a closely related entity, to June 30, 2015.
FATCA Information for Individuals
U.S. citizens, U.S. individual residents, and a very limited number of nonresident individuals who own certain foreign financial accounts or other offshore assets (specified foreign financial assets) must report those assets.
You should use Form 8938 to report these assets.
Attach Form 8938 to the annual income tax return (usually Form 1040).
Taxpayers with a total value of specified foreign financial assets below a certain threshold do not have to file Form 8938
If the total value is at or below $50,000 at the end of the tax year, there is no reporting requirement for the year, unless the total value was more than $75,000 at any time during the tax year.
The threshold is higher for individuals who live outside the United States.
Thresholds are different for married and single taxpayers.
Taxpayers who do not have to file an income tax return for the tax year do not have to file Form 8938, regardless of the value of their specified foreign financial assets.
There are penalties apply for failure to file accurately.
Alert:
The reporting requirement for Form 8938 is separate from the reporting requirement for the FinCEN Form 114, Report of Foreign Bank and Financial Accounts (“FBAR”) (formerly TD F 90-22.1). An individual may have to file both forms and separate penalties may apply for failure to file each form.
Third-party reporting:
Foreign financial institutions may provide to the IRS third-party information reporting about financial accounts, including the identity and certain financial information associated with the account, which they maintain offshore on behalf of U.S. individual account holders.
Application to domestic entities:
The IRS anticipates issuing regulations that will require a domestic entity to file Form 8938 if the entity is formed or used to hold specified foreign financial assets and the total asset value exceeds the appropriate reporting threshold.
Until the IRS issues such regulations, only individuals must file Form 8938.
International Data Exchange Service:
The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States.
The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.
The International Data Exchange Service:
1. Is based on business requirements collected by a multilateral working group
Serves as a single point of FATCA information delivery for both FIs and HCTAs,
2. May be used for automatic exchange with all FATCA jurisdictions,
3. Is based on readily-available mature technology,
4. Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
5. Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.
FBAR, FATCA Compliance Representation – Expert Tax Attorneys, Tax Lawyers, CPAs * 1-866-700-1040
by Fresh Start Tax | Mar 20, 2014 | Tax Help
FATCA Help, Representation 1-866-700-1040
We are a team of tax attorneys, tax lawyers, CPAs, and former IRS managers, agents and tax instructors.
With over 206 years of professional tax experience we offer quality FATCA EXPERT Help and Representation.
You may contact us today for free initial tax consult in person or by Skype. any conversation can be covered under attorney-client privilege if necessary.
FATCA – Foreign Account Tax Compliance Act
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
FATCA focuses on reporting:
- By U.S. taxpayers about certain foreign financial accounts and offshore assets
- By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
- The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
The IRS has finalized the format for automatically exchanging FATCA data with IGA jurisdictions.
The Intergovernmental FATCA XML Schema (version 1.1):
- Is a standard format developed in close cooperation with the OECD
- Captures required information for reporting of FATCA data from both Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs)
- Will be used for automatic exchange with all FATCA jurisdictions
- Uses elements from existing reporting schemas used by the OECD and the European Union to reduce burden on reporting entities
- Uses XML to allow for easier modifications down the road in the event of legislative or regulatory changes in reporting rules
- Will facilitate safe and secure electronic data transmission using the International Data Exchange Service
International Data Exchange Service:
The IRS is finalizing requirements for a Data Exchange service to allow for Financial Institutions (FIs) and Host Country Tax Administrations (HCTAs) to automatically exchange FATCA data with the United States.
The Service will also allow the United States to make reciprocal exchanges where called for by an IGA that is in force.
The International Data Exchange Service:
1. Is based on business requirements collected by a multilateral working group
Serves as a single point of FATCA information delivery for both FIs and HCTAs,
2. May be used for automatic exchange with all FATCA jurisdictions,
3. Is based on readily-available mature technology,
4. Requires both the file being sent (in the Intergovernmental FATCA XML Schema) and the transmission pathway to be encrypted, ensuring the security of tax data
5. Can be accessed either through a Browser-Based or a Scheduled Bulk Data Transfer environment.
The United States government has recovered over $5 billion due to international recovery efforts of taxpayers evading, hiding or not reporting monies on their tax returns.
If you are having any issues whatsoever contact us today and get expert tax representation for these matters are situations.
FATCA Help, Representation – Expert Tax Attorneys, Lawyers, Former IRS – FACTA Experts
by Fresh Start Tax | Mar 20, 2014 | Tax Help
FATCA Compliance Experts
We are a team of tax professionals who been practicing in South Florida since 1982 and we are A+ rated by the Better Business Bureau.
Our firm has over 206 years professional tax experience.
On staff are tax attorneys, tax lawyers, certified public accountants, enrolled agents, and former IRS agents managers and tax instructors.
While employed by IRS we taught tax law.
FATCA
FATCA requires financial institutions to use enhanced due diligence procedures to identify US persons who have invested in either non-US financial accounts or non-US entities.
The intent behind FATCA is to keep United States persons/taxpayers from hiding income and assets overseas into various financial institutions.
The IRS and the DOJ has there eyes full set on recovering there huge amounts of tax dollars available to them.
The US Department of the Treasury specifically the Internal Revenue Service has released on February 20, 2014 two sets of final and temporary regulations for FATCA.
First Set of Regs
The first set contains changes to the provisions of Chapter 4 of the Internal Revenue Code (Code) commonly referred to as the Foreign Account Tax Compliance Act (FATCA Regulations).
The Second Set of Regs
The second set of regulations (Link) coordinate the documentation standards, reporting and withholding rules relating to payments made to non-US and US persons (Chapters 3 and 61 and Section 3406 of the Code), with the FATCA regulations.
The regulations contain many changes with the impact varying depending on the products or services and whether a company’s activities are on shore or offshore.
This tax guidance is a compilation of many smaller changes and clarifications.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
FATCA focuses on reporting:
- By U.S. taxpayers about certain foreign financial accounts and offshore assets
- By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
- The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.
- Regulations coordinating chapters 3, 4, 61, and section 3406 of the Internal Revenue Code and revising the final FATCA regulations have been posted to the Federal Register for publication.
Feel free to contact us for a no cost professional consultation.
Covered under attorney-client privilege.
Contact or Skype us today for an appointment and stop the worry.
Let true tax professional handle this for you.
FATCA Compliance * Tax Attorney * Tax Lawyer – Miami, Ft.Lauderdale, Palm Beaches – FATCA Experts
by Fresh Start Tax | Mar 20, 2014 | Tax Help
You do not have to report your nontaxable pay you receive as a member of the Armed Forces as earned income for EITC.
Examples of nontaxable military pay are combat pay, the Basic Allowance for Housing (BAH), and the Basic Allowance for Subsistence (BAS).
The amount of your nontaxable combat pay is on your Form W-2, in box 12, with code Q.
But you and your spouse can each choose to have your nontaxable combat pay included in your earned income for EITC.
Including it as earned income may decrease the amount of tax you owe and may mean a larger refund.
You should calculate your taxes with the combat pay as earned income and without to find out what’s best for you.
If you make this election, you must include in earned income all nontaxable combat pay you received.
You cannot choose to include only a part of the nontaxable combat pay in earned income.
That is,
1. You can choose to include all your nontaxable combat pay and your spouse can choose zero,
2. You can choose to include zero amount of your nontaxable combat pay and your spouse can choose to include all of it,
3. You can both choose to include all your nontaxable combat pay,
4. You can both choose not to include your nontaxable combat pay.
Need help with income tax preparation, contact former IRS agents and managers who can help audit proof your tax return today.
by Fresh Start Tax | Mar 20, 2014 | Tax Help
Child and Dependent Care Tax Credit
Taxpayers pay for the care of their child or other dependent while they are at work.
The Child and Dependent Care Credit can reduce that cost.
Here are facts and tips from about this important tax credit:
1. You may qualify for the credit if you paid someone to care for your child, dependent or spouse last year.
2. The care you paid for must have been necessary so you could work or look for work. This also applies to your spouse if you are married and filing jointly.
3. The care must have been for qualifying persons. A qualifying person can be your child under age 13.
They may also be a spouse or dependent who is physically or mentally incapable of self-care. They must also have lived with you for more than half the year.
4. You, and your spouse if you file jointly, must have earned income, such as wages from a job.
Special tax rules apply to a spouse who is a student or disabled.
5. The payments for care can’t go to your spouse, the parent of your qualifying person or to someone you can claim as a dependent on your return.
Care payments also can’t go to your child under the age of 19, even if the child isn’t your dependent.
6. The credit is worth up to 35 percent of the qualifying costs for care, depending on your income.
The limit is $3,000 of your total cost for the care of one qualifying person. If you pay for the care of two or more qualifying persons, you can claim up to $6,000 of your costs.
7. If your employer provides dependent care benefits, special rules apply.
8. You must include the Social Security number of each qualifying person to claim the credit. Make sure you have there SSN.
9. You must include the name, address and identifying number of your care provider to claim the credit.
This is usually the Social Security number of an individual or the Employer Identification Number of a business.
10. To claim the credit, attach Form 2441 to your tax return.
If you use IRS e-file to prepare and file your return, the software will do this for you.
Child and Dependent Care Tax Credit, What You Need to Know, Former IRS, Tax Prep Former IRS
