Monthly Archives: November 2025

We previously posted "Some Nonresidents with U.S. Assets Must File Estate Tax Returns" where we discussed that deceased nonresidents who were not American citizens are subject to U.S. estate taxation with respect to their U.S.-situated assets.

 

Many foreigners owning property or assets in the United States are in violation of 706-NA filing requirements because of a number of misunderstandings. The basic rule is pretty clear-if a foreign decedent has assets in the United States with a gross value in excess of $60,000, the estate is supposed to file a tax return with the Internal Revenue Service. 

Many people think of numerous reasons not to file. The main one relates to mortgages or liens against the US property. Assume that a property in Florida is worth $150,000 and there is a $100,000 mortgage held by Bank of X. The owner of the property dies. Is a 706-NA required? Yes-you are not permitted to net the mortgage against the fair market value of the property. The only way you can do this is if the person who owns the property is a German domiciliary in which case the value can be netted on the tax return. This is a peculiarity of the German- United States estate tax convention. Cyst The deceased German domiciliary must still file the tax return because the gross value of the property, the criteria for filing a tax return, is still met. 

 

Other people look to tax treaties to avoid filing the tax returns even when the assets exceed $60,000. What most people do not realize is that in order to take advantage of a tax treaty, one needs to file a federal estate tax return and include a form 8833 with the return explaining the application of the treaty to this particular estate. If you fail to file the 706-NA, you would still technically owe tax on any US situs asset with a gross value in excess of $60,000.

 

Let's make it very simple for everyone- if you represent a foreign client with assets in the United States  with a gross value exceeding $60,000, you are required to file a federal estate tax.

Without the filing of the tax return, you are unable to take advantage of deductions, credits, and treaties benefits which might aid you in reducing the gross federal tax to a point of zero. Additionally, I might add, your client's estate is not in compliance with federal estate tax laws if no 706-NA is filed

 

Have a US Estate Tax Problem?

 

Estate Tax Problems Require

an Experienced Estate Tax Attorney

  

Contact the Tax Lawyers at

Marini & Associates, P.A.

 

 for a FREE Tax Consultation Contact US at

www.TaxAid.com or www.OVDPLaw.com

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

Robert S. Blumenfeld  - 

 Estate Tax Counsel

Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.

 

Read more at: Tax Times blog

Beginning with 2025 tax returns filed during the upcoming season, the IRS will automatically grant first-time penalty abatement (FTA) relief to taxpayers who meet existing eligibility requirements—meaning taxpayers no longer have to submit a formal request or call to ask for relief if they qualify.

What Automatic FTA Means

·         Qualified taxpayers (those who haven’t had similar penalties in the last three years and are otherwise tax-compliant) will have failure-to-file, failure-to-pay, and failure-to-deposit penalties automatically removed if they’re assessed on tax year 2025 or later returns.

·         Previously, practitioners or taxpayers needed to actively request this relief by contacting the IRS or filing Form 843, which will now be unnecessary for eligible cases.

Eligibility Highlights

·         Taxpayer must have filed required returns and paid or arranged to pay taxes for the year in question.

·         No similar penalties must have been assessed during the prior three years (except those abated for non-FTA reasons).

·         Applies only for certain penalty types: failure-to-file, failure-to-pay, and failure-to-deposit—not for accuracy-related or fraud penalties.

Practitioner and Compliance Impact

·         The new system will reduce administrative workload for tax professionals and speed up relief for affected taxpayers.

·         However, practitioners must ensure clients do not have prior ineligible penalties, since the IRS will use an automated evaluation—any prior penalty for the same tax type may automatically disqualify the taxpayer from abatement for the new year.

 Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Sources

1.       https://www.reddit.com/r/taxpros/comments/1p18mjl/irs_to_automatically_apply_first_time_abatement/     

2.      https://news.bloombergtax.com/daily-tax-report/irs-to-provide-automatic-penalty-relief-next-filing-season 

3.      https://turbotax.intuit.com/tax-tips/tax-relief/irs-tax-penalty-abatement-and-relief/c0xDLC8Qm   

4.      https://longislandtaxresolution.com/irs-first-time-penalty-abatement/   

5.       https://www.taxhardshipcenter.com/blog/first-time-forgiveness-irs-qualify-apply/

6.      https://www.irs.gov/forms-pubs/about-form-843

7.       https://www.nerdwallet.com/taxes/learn/irs-penalty-first-time-abatement  

8.      https://scltaxlaw.com/irs-penalty-abatement-complete-guide/

9.      https://www.irs.gov/payments/administrative-penalty-relief

10.   https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-tax-year-2025-for-information-reporting-on-tips-and-overtime-under-the-one-big-beautiful-bill

11.    https://www.jdsupra.com/legalnews/a-big-beautiful-break-irs-gives-8447857/

12.   https://www.irs.gov/newsroom/irs-announces-tax-relief-for-victims-of-milton-various-deadlines-postponed-to-may-1-2025-in-all-of-florida

13.   https://www.irs.gov/payments/penalty-relief-for-reasonable-cause

14.   https://www.thetaxadviser.com/issues/2024/jul/irs-penalties-abatements-and-other-relief/

15.    https://www.irs.gov/payments/penalty-relief

16.   https://www.reddit.com/r/taxpros/comments/1p18mjl/irs_to_automatically_apply_first_time_abatement/   

17.    https://news.bloombergtax.com/daily-tax-report/irs-to-provide-automatic-penalty-relief-next-filing-season 

18.   https://turbotax.intuit.com/tax-tips/tax-relief/irs-tax-penalty-abatement-and-relief/c0xDLC8Qm   

19.   https://longislandtaxresolution.com/irs-first-time-penalty-abatement/  

20.  https://www.nerdwallet.com/taxes/learn/irs-penalty-first-time-abatement 

21.   https://scltaxlaw.com/irs-penalty-abatement-complete-guide/

22.   https://www.reddit.com/r/taxpros/comments/1p18mjl/irs_to_automatically_apply_first_time_abatement/

23.   https://turbotax.intuit.com/tax-tips/tax-relief/irs-tax-penalty-abatement-and-relief/c0xDLC8Qm

24.  https://news.bloombergtax.com/daily-tax-report/irs-to-provide-automatic-penalty-relief-next-filing-season

25.   https://www.irs.gov/payments/administrative-penalty-relief

26.  https://www.blueandco.com/covid-irs-penalty-relief/

27.   https://www.irs.gov/payments/penalty-relief

28.  https://www.irs.gov/newsroom/treasury-irs-provide-penalty-relief-for-tax-year-2025-for-information-reporting-on-tips-and-overtime-under-the-one-big-beautiful-bill

29.  https://gordonlaw.com/learn/irs-announces-automatic-penalty-relief/

30.  https://www.jacksonhewitt.com/tax-help/tax-tips-topics/penalties/five-reasons-irs-penalty-relief/

31.   https://www.nerdwallet.com/taxes/learn/irs-penalty-first-time-abatement

32.  https://www.jdsupra.com/legalnews/a-big-beautiful-break-irs-gives-8447857/

Read more at: Tax Times blog

On November 17 we posted Shall I Stay or Shall I Go? - IRS Reports That US Expatriations Rose By 50% To 1,600 In 3rd Quarter of 2025! where we discussed that The Internal Revenue Service said in its notice that the number of people who lost or renounced their U.S. citizenship totaled 1,600 in the third quarter as logged by the U.S. Treasury Department, a 50% increase from the previous quarter.

According to InterNations The Best & Worst Countries for Expats in 2025 are as follows:

• 1st for the Second Year in a Row: Panama

• Your Money Takes You Far in Colombia (2nd)

• A Welcoming Local Culture in Mexico (3rd)

Need Advise on Expatriation?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

• Are You Tired of Trump 2.0.
• That The Republicans Now Control the House & the Senate.
• Are You Sick of Liberal Democrats Trying to Revise Society.
• Are You Tired of Government Shout Downs or
• Maybe You're A Naturalized U.S. Citizen Or Permanent Resident Who Has Prospered Here, But Would Now Like To Move Back The Old Country For Retirement?

You Might Want to Consider Expatriation?

The Internal Revenue Service said in its notice that the number of people who lost or renounced their U.S. citizenship totaled 1,600 in the third quarter as logged by the U.S. Treasury Department, a 50% increase from the previous quarter.

Included on the list are those who lost U.S. citizenship under Internal Revenue Code Section 877(a) and Section 877A, according to the notice, as well as long-term residents who are treated as losing citizenship under Section 877(e)(2). 

According to CNBC the top reason why Americans abroad want to dump their U.S. citizenship include:

• Nearly 1 in 4 American expatriates say they are “seriously considering” or “planning” to ditch their U.S. citizenship, a survey from Greenback Expat Tax Services finds.  
• About 9 million U.S. citizens are living abroad, the U.S. Department of State estimates.
• More than 4 in 10 who would renounce citizenship say it’s due to the burden of filing U.S. taxes, the Greenback poll shows.

Should I Stay or Should I Go?

Need Advise on Expatriation?

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog