Superannuation Tax Treatment: Our response to some great arguments

Superannuation Tax Treatment: Our response to some great arguments

In a earlier video, we explained that our interpretation of US tax treatment of Australian Superannuation funds is in line with the IRS's "unofficial official" position. Which is, essentially, Superannuation Funds in which the employer has contributed more than the employee, has an easy solution. FBAR and Form 8938 compliance. On the other hand, Superannuation Funds that are either self-managed (SMSF) or where the employee contributed more (or is self-employed) typically triggers a Form 3520-A and Form 3520 filing as the IRS considers then Grantor Trusts. Additionally, Grantor Trusts tend NOT to be tax-deferred for US-tax purposes even though the Superannuation is a tax-deferred for Australian tax purposes. Some people claim that Australian Superannuation Funds are Social Security, thus the US-Australian Tax Treaty exempts them from taxation and 3520-A/3520 reporting. While it is true Australian Social Security would be exempted from US taxation, we have pointed the many incongruities to the argument that Social Security and Superannuation Funds are analogues. Karen Alpert and John Richardson both question our stance and point out some helpful facts to their position. We wish they were right. And in fact, someone may be able to convince a US Tax court of that. It just hasn't been done yet. And to do so would require some incredible navigation through language that runs contra to a fairer treatment. Worse, the risk of getting a bad result in tax court could prove ruinous to someone who doesn't file Forms 3520-A/3520 when required to do so -- a total for $20,000 of penalties -- per year. And the statute of limitations on assessing these penalties? Well, there is no statute of limitations. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 Sskype ID: Parent Parent https://youtu.be/J2QPTxN8NRo IRS Medic

Why taxing Hedge Funds an additional 19% might not be so smart

Why taxing Hedge Funds an additional 19% might not be so smart

Joining Anthony and Claudine is Bruce McGuire, the Founder and President of the CT Hedge Fund Association (cthedge.com), and also the managing partner at Global Alpha Research LLC. A proposed bill -- luckily it appears it will not be included in the Connecticut state budget this year --- but we may have to worry about this again in the future, could destroy Connecticut's Hedge Fund industry. H.B. No. 6973, “AN ACT CONCERNING THE IMPOSITION OF A SURCHARGE ON INVESTMENT MANAGEMENT SERVICES FEES: To provide tax parity. This proposal to tax hedge funds and other managed investments at 19%. The bill would impose a surcharge on income derived from investment management services (and would cover investors from all income levels). The proposal was written so broad it is unknown who it would hurt the most, or to even know if is is possible to actually enforce. Why 19%? 19% is the alleged benefit of the so-called "carried intest loophole." But the fact is there is no carried interest loophole. It is simply a derogatory term for long term capital gain treatment. How would this be a danger, not a benefit, to CT’s financial future? How easily could they just leave the state because of the high taxes? Where do you think they would move to? FL has no income tax, and no estate tax… Example:Hedge Fund billionaire, David Tepper, left NJ and moved to FL after 20 years and moved his HQ as well. He was that states’ wealthiest resident. Estimated that it will cost NJ hundreds of millions of dollars. CT Hedge Fund cluster is #2 in the world. China and Japan are very envious. In China, the total number of hedge funds almost doubled in 2016, and assets under management have more than tripled over the past 2 years. https://youtu.be/r7ue7FvVi3A IRS Medic

Help End Citizenship Based Taxation!

Help End Citizenship Based Taxation!

Citizenship-based taxation is a relic of the Civil War. Don't you think its' time we end it? A lot has changed in a 155 years! https://youtu.be/6SyDvzpaQg8 IRS Medic

Taking risks with Australian Superannuation US tax treatment

Taking risks with Australian Superannuation US tax treatment

http://ift.tt/2eK69Oy Joining Claudine and Anthony in this video is tax attorney Robert V. Hanson. Watch as they dismiss wishful thinking on the IRS treatment of Australian Superannuation Funds. The number one concern of an Australian Superannuation, whether Self-Managed Superannuation Fund (SMSF) or not, is whether it is classified for US tax purposes as a Grantor Trust or an Employee Trust. We always hope for a Employee Trust. Why? Because if it is classified as an Employee’s Trust the reporting is relatively easy and there no tax is due until the date of distribution (which still isn’t great, but but it is better than being taxed on its growth). The reasons we hope our clients aren’t dealing with an Grantor Trust is that taxes will likely be due on growth in the fund ya over year even though it is a tax -deferred vehicle in Australia. Adding insult to injury can be very time-consuming accounting and compliance work to prepare Form 3520-A and Form 3520. And there still make be more complicated forms — Form 8621 if the fund is deemed to be investing in Passive Foreign Investment Companies (PFICs). Yet some claim the Australian Superannuations funds are just like social security thus exempt from US taxation thanks to the treaty. This argument is discussed along with the abundant evidence that contradicts it. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203)269-6699 info@irsmedic.com https://youtu.be/U9ca1h18q4Q IRS Medic

The Myth of the Carried Interest Loophole

The Myth of the Carried Interest Loophole

Are hedge funds getting away with not paying taxes for years? Many pundits and politicians claim the carried interest "loophole" creates an unfair advantage for the wealthy and that something must be done about this crisis. But what is the carried interest loophole? Does it actually exist? In this video, tax Attorney Anthony Parent explains how equity and wealth fund managers are compensated and explains how they are bound by the same rules everyone else is when it comes to long term capital gains. There is no special carve out for hedge funds. It's simple partnership taxation of long term capital gains. Yeah, kind of boring. In fact, "carried interest" is a made up term to describe a made up thing. There is no way to close the carried interest loophole because there is no carried interest loophole! Rather, the claimed societal pathology isn't all the sinister --- it is merely long term capital gains tax treatment which states you are taxed at 20% rate on the date of disposition. This is true whether you are an investor in a 3-family house or a multi-billion dollar fund. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 http://ift.tt/1RfwK1f https://youtu.be/y_DHWFNc1rE IRS Medic

The Myth of the Carried Interest Loophole

The Myth of the Carried Interest Loophole

Are hedge funds getting away with not paying taxes for years? Many pundits and politicians claim the carried interest "loophole" creates an unfair advantage for the wealthy and that something must be done about this crisis. But what is the carried interest loophole? Does it actually exist? In this video, tax Attorney Anthony Parent explains how equity and wealth fund managers are compensated and explains how they are bound by the same rules everyone else is when it comes to long term capital gains. There is no special carve out for hedge funds. It's simple partnership taxation of long term capital gains. Yeah, kind of boring. In fact, "carried interest" is a made up term to describe a made up thing. There is no way to close the carried interest loophole because there is no carried interest loophole! Rather, the claimed societal pathology isn't all the sinister --- it is merely long term capital gains tax treatment which states you are taxed at 20% rate on the date of disposition. This is true whether you are an investor in a 3-family house or a multi-billion dollar fund. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 http://ift.tt/1RfwK1f https://youtu.be/m9OZWIh_chw IRS Medic

IRS Passport Denial and Revocation updates with the Taxpayer Advocate

IRS Passport Denial and Revocation updates with the Taxpayer Advocate

http://ift.tt/2wq0oiP The Passport Denial and Revocation Law: It has now been almost 2 years since the FAST Act was passed. The FAST Act included a provision that amended the US tax code to give the power to the IRS to have your passport revoked or denied for unpaid federal income tax taxes of $50,000 or more. While we have had clients bring us IRS collection notices that include a paragraph about passport revocation and denial, the IRS had not yet begun to seize passports. Taxpayer Advocate Updates: On the call was Rostyslav Shiller and Amanda Bartmann, Attorney Advisor to the National Taxpayer Advocate. We truly appreciate the work that Nina Olson and the Taxpayer Advocate team does. They informed us of some updates: - The IRS will begin with passport denials, not revocations - They believe denials will begin in early 2018 - The Taxpayer Advocate will be giving 'passes' to those US persons living overseas that have passport issues If you have a tax debt or are concerned about the security of your passport, contact us. We can help. Parent and Parent LLP 60 E 42nd St #4600 New York, NY 10165 (212) 256-1335 info@irsmedic.com https://youtu.be/Q7fMdCFWD6A IRS Medic