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