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Category Archives: From Live Blog

The US Is Now Revoking Passports of US Taxpayers Who Have Unpaid Taxes!

On March 1, 2017 we posted Another Travel Ban: Starting Next Month Your US Passport Will Be Revoked For Tax Debts!  where we discussed that the tax code now provides for authorities to revoke or deny the passport of any US taxpayer who has unpaid taxes in excess of $50,000 or who have not obtained or won’t provide a Social Security numbers.  We also discussed that the IRS updated it website on February 6, 2017 entitled Revocation or Denial of Passport in Case of Certain Unpaid Taxes to state that while the IRS had not yet started certifying tax debt to the State Department. However, Certifications to the State Department will begin in early 2017 and this webpage will be updated to indicate when this process has been implemented.

As we are now Midway through 2017 ...
Any US Taxpayer who would like
to Travel Unimpeded this Summer
Should currently Address Their Tax Deficiencies
Prior to scheduling their Summer Vacations!
 
If you have seriously delinquent tax debt, IRC § 7345 authorizes the IRS to certify that to the State Department. The department generally will not issue or renew a passport to you after receiving certification from the IRS. Upon receiving certification, the State Department may revoke your passport. If the department decides to revoke it, prior to revocation, the department may limit your passport to return travel to the U.S.
 
Seriously delinquent tax debt is an individual's unpaid, legally enforceable federal tax debt totaling more than $50,000* (including interest and penalties) for which a:

  • Notice of federal tax lien has been filed and all administrative remedies under IRC § 6320 have lapsed or been exhausted or
  • Levy has been issued
 
Before denying a passport, the State Department will hold your application for 90 days to allow you to:
  • Resolve any erroneous certification issues
  • Make full payment of the tax debt
  • Enter into a satisfactory payment alternative with the IRS
 

"There Is No Grace Period For Resolving
The Debt Before The State Department Revokes A Passport."

All the existing remedies for addressing an IRS lien or levy continue to apply! Therefore, this new provision of denying a passport will not apply to taxpayers who have entered into installment agreements or offers-in-compromise, or who have requested collection due process hearings or innocent spouse relief.

 US citizens living abroad should ensure that their IRS tax affairs are in order to ensure that they do not have any issues with their US passport when traveling.
  
Owe The IRS Money?

 Want To Keep Your US Passport and Travel in Peace?

 

Contact the Tax Lawyers at 
Marini & Associates, P.A.

 

 
for a FREE Tax Consultation

Toll Free at 888-8TaxAid (888)882-9243.

Read more at: Tax Times blog

IRS Targeting Foreign Corporations Which Do Not File!

On February 7, 2017 we posted IRS Has 13 New Compliance Campaigns for LB&I Taxpayers where we discussed that Tax practitioners will face new questions from examination teams as the IRS selects compliance risks based on data, in the Large Business and International Division's (LB&I) move from individual audits of multinationals to broader considerations involving risk assessment and that LB&I released on February 1, 2017 their series of 13 new campaigns aimed at cracking down on tax evasion; including #12 which covers Form 1120-F Non-Filer Campaign.

Foreign companies doing business in the U.S. are often required to file Form 1120-F (U.S. Income Tax Return of a Foreign Corporation).

  • LB&I has data suggesting that many of these companies are not meeting their filing obligations.
  • In this campaign, LB&I will use various external data sources to identify these foreign companies and encourage them to file their required returns.
  • The approach for this campaign will involve soft letter outreach.
  • If the companies do not take appropriate action, LB&I will conduct examinations to determine the correct tax liability.

The goal is to increase voluntary compliance by foreign corporations with a U.S. business nexus.

This will especially affect Canadian and Mexican corporations that receive payments from U.S. sources but do not file a U.S. tax return. Foreign corporations, including Canadian and Mexican corporations, are generally required to file a U.S. tax return if they have a "trade or business" in the United States. Although "trade or business" is not explicitly defined, it may apply to a corporation with a low level of activity. Therefore, Canadian and Mexican companies with U.S. customers that attend U.S. meetings or trade shows or with any U.S. connection could likely be considered to be have a U.S. trade or business.

Many Canadian & Mexican corporations, which take advantage of NAFTA and as a result have a U.S. trade or business are not actually subject to U.S. tax, as they do not have a permanent establishment. The Canada-U.S. as well as the Mexican–U.S. treaties usually limits the United States' right to tax the profits from a Canadian or Mexican company's U.S. trade or business to the profits generated from a U.S. permanent establishment of the  company. However, these corporations are still required to file U.S. form 1120-F "U.S. Income Tax Return of a Foreign Corporation" to assert the treaty claim and failure to file can result in penalties.

The IRS can impose a $10,000 per year penalty for failing to disclose a treaty-based position on a timely filed return.

Therefore, a Canadian or Mexican company with U.S.-based sales could be assessed a $10,000 penalty for each year that it was doing business in the United States and did not file a return.

Since no returns were filed, the IRS can assess penalties for all open tax years in which the Canadian company had U.S. sales, which could result in a significant penalty.

 
Have US Sales, But No PE?  
 
 

 
Need US Tax Filing Advise?  
 

 

 
 

Contact the Tax Lawyers at
Marini & Associates, P.A.
 
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).

 

 

 

KPMG

Read more at: Tax Times blog

Are You Hiding Assets in the BVI? Beneficial Ownership Register Starting July 1st!

On May 12, 2017 we poste Are You Hiding Assets in the BVI? NOT Anymore Your NOT! where we discussed that The British Virgin Islands’ Government signed new legislation regarding Beneficial Ownership & Technical Protocol with the UK which will come into force in June 2017, which is hoped to improve the exchange of beneficial ownership information between the UK& BVI law enforcement for taxation rulings.

As per the agreement, the UK Government will treat the BVI’s Corporate Service Provider Model as a legitimate equivalent to the UK’s public registry of beneficial ownership. BVI’s model will also incorporate an online platform called BOSSs (Beneficial Ownership Secure Search System) in an attempt to modernize and innovate the current systems and processes.

The British Virgin Islands (BVI) government will enact legislation so that by July 1, 2017, registered agents (though not other BVI institutions) will have to maintain their own databases with basic beneficial information about the BVI companies they administer.
The threshold requirement for disclosure is 25 per cent of the ownership interests. BVI law enforcement officials will be able to use the Beneficial Ownership Secure Search (BOSS) system to search these databases and exchange the information with the UK.

 
This platform will allow all beneficial ownership information to be shared with the UK within a 24 hour period. It will also provide BVI authorities immediate access to verified beneficial ownership information on any company registered in the British Virgin Islands.

Information to be submitted on the BOSS platform will include:

  • Company name.
  • Incorporation number.
  • Registered Office Address.
  • Incorporation date.

Beneficial Owner details will include the following:

  • Beneficial Owner name.
  • Beneficial Owner date of birth.
  • Beneficial Owner Particulars such as passport number.
  • Status of Entity (whether active or inactive etc.).
  • Date Liquidation commenced & completed (where applicable).
  • Reasons as to why any information is incomplete or not provided.
Each agent registered with the system will have their own user profile and secured space to store the required information (as listed above).

Do You Still Have Undeclared Income from
Offshore Banks or BVI Companies?
 
 
 
Want to Know if the OVDP Program is Right for You?
 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
 
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243



 

Read more at: Tax Times blog

US Tax Planning After BEPS?

On June 6, 2017, we posted More than 100 countries conclude the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS where we discussed that more than 100 jurisdictions have concluded negotiations on a multilateral instrument that will swiftly implement a series of  tax treaty measures to update international tax rules and lessen the opportunity for tax avoidance by multinational enterprises.  
 
Then on June 13, 2017 we posted New Int'l Tax Rules May Affect US Company's Foreign Subsidiary's Treaty Benefits where we discussed that even though the U.S. participated in the negotiations over the MLI, it ultimately chose not to adopt the convention, which means that treaties the U.S. has with other countries won't be modified by the MLI. However, the tax situations of multinational U.S. corporations could still be affected because anti-abuse rules are likely to automatically kick in in jurisdictions where these companies' foreign subsidiaries are making cross-border transactions outside the U.S., experts said.

Now Taxes Without Borders posted Inbound and Outbound U.S. Tax Planning – What’s Left After the MLI? where they discuss that despite these possible changes, a number of interesting planning opportunities appear to remain and while the MLI goes a long way toward curbing the types of abusive structures it was designed to eliminate; since not all countries have signed the MLI or consistently adopted similar treaty provisions on a bilateral basis, many such structures appear to remain viable.

For example, the possible inclusion of an anti-triangular provision from the MLI in a particular treaty could prevent treaty benefits from being available (and thus result in increased withholding tax) where payments are made to a third-country permanent establishment (PE) and that PE is not subject to a sufficient rate of tax. 

Many existing structures also could be adversely affected by the inclusion of certain new elimination of double taxation provisions contained in the MLI.  Under these provisions, an exemption may be denied in the home country for income that “may be taxed” in the treaty partner country, with a credit being provided instead for the tax paid on such income in the other country (which may often be zero or a de minimis amount).

Need a Defendable Tax Structure?
 


Contact the Tax Lawyers at
Marini & Associates, P.A. 
 
 for a FREE Tax Consultation Contact US at 
or Toll Free at 888-8TaxAid (888 882-9243).
 

 

Read more at: Tax Times blog