Our latest findings with the new IRS Amnesty Program

I did say that the Service's position on the Amnesty was very much unmovable. 

However, I do want to report that we are having success in certain types of cases in getting the bank deposit penalties either eliminated or reduced in a manner which doesn’t show up obviously in the IRS series of questions. 

In the first case, we’re relying on Questions 17 in the IRS question which does say if you have no taxable income and you’ve paid all your taxes on your taxable income, there’s not going to be the substantial FBAR penalty violation that comes with a willful FBAR violation.  That being the case, with no taxes due, you don’t need to be in the amnesty program. 

What we had found is people have gone in the amnesty program, and then because of either loss, carry-forwards, or foreign tax credits on foreign income or whatever may arise in these individuals’ situations, that at times even though there’s been foreign bank deposit investment income not reported, we have been able to show that there has been no taxable income.  So that’s one area where there is some deviation if it’s handled in a sophisticated way.  

Richard Lehman has had extensive experience with all areas of the Internal Revenue Code that apply to American taxpayers and nonresident aliens and foreign corporations investing or conducting business in the United States, as well as U.S. citizens and domestic corporations investing abroad. 

Mr. Lehman has a national reputation for handling the toughest tax cases, structuring the most sophisticated income tax and estate tax plans, and defending clients before the Internal Revenue Service.

Updated Tax Seminar by Richard S. Lehman

What America does not know is the Internal Revenue System (I.R.S.) now has all of the tools necessary to find an American’s assets and sources of income.

Two pieces of Tax Legislation have been phased in over the last few years. Those two pieces of legislation, together with existing law, now make sure that every United States taxpayer’s assets and source of income, both foreign and domestic, will be included in an information return or a tax return that must be filed with the Internal Revenue Service of the United States.

These two new laws require U.S. Taxpayers to report all of their interest in foreign assets and shortly will require every foreign financial institution and many foreign non financial entities to report all payments to U.S. Taxpayers or the foreign institution will have to pay that tax. 

The presentation below is 1 hour and topics are: 

1. The Foreign Account Tax Compliance Act (FATCA)
   (Beginning Taxable Year 2011)
2. Foreign Financial Institutions (FFI’s) Report On Americans
   (Beginning in 2013)
3. I.R.S Grants NEW Amnesty Program
   (Beginning Taxable Year 2012)

Many more free informative Tax Law Seminars are available at www.ustaxlawseminars.com

IRS is aware of how much taxation is not being collected because of overseas bank accounts and transactions that have not been included in Americans income tax. Simply not reporting has serious consequences.

The IRS is making major push to make sure this is curbed. The IRS now has a several pronged approach to the full disclosure issue when it comes to Americans doing business around the world.

Americans as of last year have had to disclose all of their foreign assets to the I.R.S. and soon Foreign banks, and foreign institutions must soon report on U.S. accounts or the banks will force large U.S. taxes. Furthermore, since last year Americans had to disclose their interests in foreign assets. The foreign institutions are already gearing up for this.

If it has been decided that you are not eligible for the I.R.S Safe Harbor - then you will use the law.

There are many ways to recover valuable income tax refunds from losses from financial crimes that are either not actual ponzi schemes or that are Ponzi Schemes that do not fit the standards of the safe harbor.

The law permits tax deductions for losses from financial fraud under the theft loss deduction category. This is a more difficult task than relying on the safe harbor rules. The taxpayer must be careful to prove the theft, the amount of the loss and the time of the loss if the taxpayer is going to be successful.

The IC-DISC has been approved as an acceptable tax planning entity for the export of American produced computer software and programs

The Export Disc Corporation 

Computer Software And Internet Sales And Licenses

 Before the issuance of the Software Regulations, there was uncertainty about the taxation of computer program transactions. Computer programs did not fit traditional tax principles. Computer programs are usually sold pursuant to "license" or "user agreements".  A computer program transaction is unlike a sale of a physical object since the value of the program copy far exceeds the value of the physical medium on which it is transferred. Computer  programs, in fact are transferred electronically. Often, there is no physical medium at all.

For purposes of determining the applicability of the DISC to computer software exports, two key analyses are often required. First, (1) is the software "export property" for DISC purposes and (2) is the software product's source of income "from without the U.S."? Is the product for use, consumption or sale without the U.S.?

Click here to read full article by Richard S. Lehman, Esq

LISTEN TO PODCAST:
UPDATE: The benefits of U.S. Exporting computer software and internet sales and licenses

The truth about the EB5 Visa and United States taxation on worldwide income

The truth about the EB5 Visa and United States taxation on worldwide income

The New I.R.S. Amnesty Program

New U.S. Tax Laws for 2011, 2012 and 2013 from Alfred Zucaro Jr. Esq. on Vimeo.

THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA)

AMERICANS NOW REQUIRED TO DISCLOSE ALL FOREIGN FINANCIAL ASSETS 

A little known new law was enacted for the year 2011 that requires, that once certain minimum amounts are exceeded, any specified person that holds any interest in a specified foreign financial asset during the taxable year to attach a statement to that person’s U.S. tax return and report information that identifies the value of those specified foreign financial assets in which the individual holds an interest.

Specified foreign financial assets include financial accounts maintained by foreign financial institutions, as well as certain other financial assets or instruments.  An asset or instrument may be a specified foreign financial asset even if the asset or instrument does not have a positive value.
READ FULL ARTICLE

United States Tax Benefits of Exporting

By Richard S. Lehman, Esq.

THE IC-DISC

The business world is going to be a tough place for the American exporter in 2012.  The dollar will remain strong, keeping U.S. goods high priced, trade to the Euro zone will weaken while the cheap euro makes the Euro Zone highly competitive as exporters.  China will contract and desperate competitors and countries will be trying even harder to protect their own.  With export profits hard to come by, U.S. taxpayers that sell, lease or license “export property” which is manufactured, produced or grown in the United States (not more than 50% of which attributable to U.S. imports), can take advantage of strong support for their export profits in the Internal Revenue Code.

Export profits can produce substantial tax benefits with little more than establishing a new corporation dedicated almost exclusively to export profits; a separate set of export books and records, and abiding by a relatively simple set of rules that govern Domestic International Sales Corporations (now known as “IC-DISC). Rather than being organized as a mere “paper” entity for receipt of commission income only, an IC-DISC can have more substance and engage in additional export-related activities such as promotional activities, thereby enhancing its income and the benefit of the advantageous tax rates to shareholders.1/

An IC-Disc is compensated by a U.S. taxpayer that manufactures, sells or licenses “export property”.  Typically the U.S. taxpayer that establishes the IC-DISC will be related to the IC-DISC and even own the IC-DISC. The U.S. taxpayer agrees to pay the IC-DISC based on a Commission Agreement.  A portion of the U.S. taxpayer’s export profits are paid to the IC-DISC and the payment is deducted from the profits of the U.S. manufacturer, seller or licensor.  The portion of the U.S. taxpayer’s “export profits” that are paid to the IC DISC are measured under three profit scenarios.  The deduction may exceed more than 50% of the U.S. Taxpayers’ export profits, depending upon gross income, profitability and costs.

In its simplest terms, the IC-DISC is a separate corporation.  The income received by the DISC is not taxable to the DISC.  The DISC is charged with accounting separately for a U.S. “taxpayer’s export profits” and receives more than 50% of the export profits free of any U.S. taxation.2/

The existence of the DISC will be transparent to the export company’s customers.  The exporter will continue to operate its business in the same manner and its employees will continue to perform the company’s manufacturing, sales, billing, shipping and collection functions.  The fact that there is a commission agreement between the exporter and the DISC will not have to be disclosed to the exporter’s customers and no documentation provided to the customers will need to indicate the existence of, or services deemed provided by the DISC.

1/     As will be explained later, the “IC” stands for an “interest charge”.  This is a cost to be paid to the extent the Domestic International Sales Corporation does not distribute its profits to its shareholders.

2/     IC-DISC income is also typically exempt from individual state income taxes.

READ FULL ARTICLE HERE: http://www.lehmantaxlaw.com/?p=514

Ponzi Scheme Tax Loss

Topics discussed in this seminar include: Ponzi schemes and theft loss, understanding the safe harbor, the theft loss, what is privity, amount of the theft loss deduction, phantom income, the year of discovery, amount of theft loss in the year of discovery, reasonable prospect of recovery, ascertainable standard, tax planning for maximum use of loss, quantifying the amount of the theft loss, the amended return, claw backs, estates and trusts, comparing safe harbor vs the law, tax planning