Are you a U.S. citizen or a resident (you have a green card or spend significant time in the U.S.)?
Have you complied with or are you aware of your obligations to comply with U.S. Income Tax Laws?
Most U.S. residents or citizens living outside the U.S. have not fully complied with U.S. Income Tax Laws.
The window to COMPLY is Closing Quickly.
THE TIME TO ACT IS NOW.
By Steve L. Waserstein, WNF Law, PL [Spanish Language Version]
If you are a United States citizen or resident (e.g. a green card holder or you spend in the United States 183 days or more in any one calendar year or over 3 years based on the substantial presence formula), you are obligated to report (and possibly pay U.S. income taxes on):
- your worldwide income (e.g. whether earned in the U.S. or outside the U.S.) including salary, commissions, dividends, gains, rent, royalties, and interest,
- gifts from non-resident individuals in excess of $100,000 during the year,
- foreign (non U.S.) accounts (i.e. banks or brokerage accounts) with balances (in the aggregate at any time during the year) in excess of U.S. $10,000, and
- certain interests in or transactions with foreign assets, foreign entities and/or trusts.
Generally, non-compliant U.S. citizens/residents fall into three categories:
- The person did know his/her reporting and/or tax payment obligations,
- The person thought he/she may have a reporting or payment obligation but received incorrect advice from tax preparers, accountants or others, or
- The person knew or had reason to know of his/her obligations and did not comply. Unfortunately, none of the above categories are excuses for non-compliance.
The Internal Revenue Service (IRS) of the U.S. is aggressively targeting and combatting tax evasion and tax non-compliance. The consequences, if caught, of non-compliance includes substantial civil penalties and criminal prosecution. The IRS has acquired many tools to catch those who are not complying including:
- FATCA (Foreign Account Tax Compliance Act) which requires foreign financial institutions (including banks and brokerages) to report certain information about U.S. account holders (i.e. U.S. citizens/residents or foreign entities with U.S. citizens/residents, directly or indirectly, owning more than 10%) to the IRS or face a 30% withholding on U.S. sourced income payments and potentially losing correspondent bank status. This reporting obligation will begin in the year 2015 relating to accounts in 2013, 2014 and thereafter.
- Data Mining. The IRS plans to use the internet including Google, Facebook, Linked In, Twitter and other sites to find information of taxpayers, and information from mobile phone companies and credit card companies.
- 3. Whistleblower. Basically, an employee, contractor, friend, family member or other person provides information to the IRS leading to a tax collection recovery. In this case the person who provided the information will receive a reward. Mr. Birkenfeld, who provided information relating to UBS and its clients, received an award exceeding $100 million U.S. dollars.
- Third Party Information. The IRS obtains evidence or information from a third party including your banker, your accountant, your business competitor, your broker, your bank, your credit card companies or other financial institutions.
- Information Exchange Treaties. The IRS has entered into and continues to enter into agreements with governments to exchange information about individuals residing in its country.
With these new tools, the chance of a person being caught by the IRS has increased dramatically and will improve even more in the near future. Non-compliant U.S. citizens/residents have a window of opportunity to correct such non-compliance and save a substantial amount of money in penalties and avoid criminal prosecution by entering the IRS Offshore Voluntary Disclosure Program or taking other actions permitted by law. This window is open but may close soon, some speculate by January 1, 2015.
We recommend that each U.S. citizen/resident take this opportunity to correct mistakes now, before it's too late. If you have any questions please feel free to contact Steve L. Waserstein.
About WNF Law
WNF Law, PL - Waserstein Nunez & Foodman represents an exclusive list of clients who require legal representation in its collective areas of expertise. Located in Miami, Florida at 201 S. Biscayne Boulevard on the top floor of the Miami Center (34th Floor). Please contact Brenda Bassett at 305 760 8500, Bsb@WNFLaw.com to learn more about WNF Law, PL or at its website www.WNFLaw.com.
In summary, WNF Law, PL - Waserstein Nunez & Foodman represents an exclusive list of clients who require legal representation in its collective areas of expertise. Located in Miami, Florida at 201 S. Biscayne Boulevard on the top floor of the Miami Center (34th Floor). Please contact Brenda Bassett at 305 760 8500, Bsb@WNFLaw.com to learn more about WNF Law, PL or at its website www.WNFLaw.com.