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International Reporting

Understanding International Taxation

As globalization continues to shape our world, more and more U.S. citizens and residents are finding themselves engaging in international activities—whether through working abroad, investing in foreign assets, or just simply traveling. Additionally, more and more U.S. "persons" are finding out from the IRS that they have additional income tax considerations and reporting requirements due to their international activities.

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These considerations include reporting ownership interests in foreign bank accounts (FBAR reporting), reporting ownership interests in foreign financial assets (FATCA), and reporting ownership interests in foreign entities such as foreign corporations, foreign trusts, and foreign partnerships.  To make matters worse, the IRS is ruthless towards taxpayers who do not report their interests in foreign assets properly.  In addition to these stringent reporting requirements, U.S. persons are also taxed on their "worldwide" income.  This means that you have to pay U.S. income tax on not only your income earned from inside the U.S., but also your income earned overseas.  Fortunately, there is relief available in the form of the foreign earned income exclusion (FEIE), the foreign tax credit (FTC), and income tax treaties.  However, this can all get very complex and confusing and it's imperative that you claim these benefits properly to avoid the long arm of the IRS. 

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Ultimately, navigating international taxation can be very difficult, but understanding a few key points can help you manage your tax obligations and avoid potential costly penalties.  Fortunately, your premier tax resolution experts have extensive experience in international issues and we welcome the chance to help ensure that you stay in compliance with these very complex international tax laws and international reporting requirements. 

International Issues We Address

  • FinCEN Form 114, Reporting of Foreign Bank and Financial Accounts (FBAR)

  • Form 8938, Statement of Specified Foreign Financial Assets (FATCA)

  • Form 8621, Information Return by Shareholders of a Passive Foreign Investment Company or Qualified Electing Fund (PFIC & QEF reporting)

  • Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations

  • Form 8854, Initial & Annual Expatriation Statement

  • Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts

  • Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner

  • Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation

  • Form 2555, Foreign Earned Income Exclusion (FEIE)

  • Form 1116, Foreign Tax Credit (FTC)

  • Income Tax Treaty Issues

  • Form 1040 NR, Nonresident Tax Returns

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