Yearly Archives: 2012

Domestic Tax Problems. The OVDP is a nice avenue for cleaning up domestic tax flubs at the same time. For foreign account disclosures, the IRS has a helpful set of FAQs. They were updated in late June 2012 in key respects. Notably, though, going beyond the subject of offshore account and income, the IRS has made it crystal clear that you can fix domestic tax problems at the same time you disclose your foreign income and accounts.

The IRS released modified versions of draft Form W-8IMY, Certificate of Foreign Intermediary, Foreign Flow-Through Entity, or Certain U.S. Branches for United States Tax Withholding., on August 13, 2012.

The new form reveals a foreign financial institution employment identification number (FFI-EIN) and a FATCA ID for participating FFIs and deemed-compliant FFIs. In order to protect taxpayer confidentiality, the IRS decided to issue entities the two different numbers to serve different roles.

The FFI-EIN will be used for filing purposes and the FATCA ID will be used for public verification purposes. A foreign tax identifying number will now also be required on Form W-8BEN.

In June we Blogged about the IRS' release of Draft of Form W-8BEN with FATCA Changes, which modified versions of draft Form W-8BEN, Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding, for individuals and entities.

The draft Form, now divided into W-8BEN and W-8BEN-E, is a pre-release, but as expected, it indicates changes to come for foreign financial institutions and withholding agents which are now reflected in this newly released draft of Form W-8IMY.

If you have any questions regarding Form W-8BEN OR W-8IMY, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).

Swiss banks denied it is helping wealthy Germans dodge taxes by telling them to move funds to Singapore and other money centres ahead of a Swiss tax deal due to come into force in January.

"We do not help clients to evade taxes and we clearly don't support clients in circumventing bilateral tax agreements, including the one with Germany," UBS private bank boss Juerg Zeltner told Reuters in an interview on Tuesday.

He was responding to a media report last week which said UBS, Europe's fifth-largest bank by market value, had advised German clients to move funds to Singapore to avoid detection by authorities ahead of the planned withholding tax.

Taxpayer -These are applied to each tax year with no statue of limitation	Filing Requirement	Form IRC Penalty section
U.S. person with interest in:	Foreign Corporation (FC)	Form 5471 IRC 6038(b)
Foreign Partnership (FP)	Form 8865
FC or FP with Foreign Disregarded Entity	Form 8858
Penalty reducing Foreign Tax Credit:	Foreign Corporation (FC)	Form 5471 IRC 6038(c)
Foreign Partnership (FP)	Form 8865
FC or FP with Foreign Disregarded Entity***	Form 8858
25 percent foreign-owned U.S. corporations	Form 5472	IRC 6038A(d)
25 percent foreign-owned U.S. corporations that fail to: 1) authorize the reporting corporation to act as agent of a foreign related party, or 2) substantially comply with a summons for information	N/A	IRC 6038A(e)
Transferor of certain property to foreign persons:	Foreign Corporation	Form 926 IRC 6038B(c)
Foreign Partnership	Form 8865 Schedule O
Foreign corporations engaged in U.S. business	Form 5472	IRC 6038C(c)
Individuals receiving gifts from foreign sources exceeding $10,000 (adjusted annually for cost of living)*** use to be $100,000	Form 3520	IRC 6039F(c),
Individuals that relinquish their U.S. citizenship or abandon their long-term resident status	Form 8854	IRC 6039G(c)
Foreign persons holding direct investments in U.S. real property interests	N/A	IRC 6652(f)
U.S. person who transfers to, or receives a distribution from, a foreign trust	Form 3520	IRC 6677(a)
U.S. Owner of a foreign trust	Form 3520-A	IRC 6677(b)
Failure to file returns with respect to acquisitions of interests in:	Foreign Corporation	Form 5471 Schedule O IRC 6679,
Foreign Partnership	Form 8865 Schedule P	IRC 6679,
Foreign corporation failure to file personal holding company tax return	Form 1120 Schedule PH	IRC 6683(Repealedin 2005)
DISC, IC-DISC, or FSC failure to file returns or supply information:	DISC	Form 1120-DISC IRC 6686
IC-DISC	Form 1120-IC-DISC
FSC	Form 1120-FSC
Allocation of Individual Income Tax to Guam or the CMNI	Form 5074	IRC 6688
Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession	Form 8898	IRC 6688
Taxpayer’s failure to file notice of foreign tax redetermination under IRC 905(c) or IRC 404A(g)(2)	Form 1116 or Form 1118 (attached to Form 1040-X or Form 1120-X)	IRC 6689
Taxpayer’s failure to file notice of foreign deferred compensation plan under IRC 404A(g)(2)	N/A	IRC 6689
Taxpayer’s failure to disclose treaty-based return position	Form 8833 or statement	IRC 6712
Failure to Provide Information Concerning Resident Status (Passports and Immigration)	N/A	IRC 6039E
Information with Respect to Foreign Financial Assets Yearly penalty	Form 8938, Form TDF90.22-1	IRC 6038D 50% of assets