2019 IRS Relief Procedures for Certain Former Citizens explained

2019 IRS Relief Procedures for Certain Former Citizens explained

Previous video on 2019 Streamlined Submission updates: https://youtu.be/s_QxqiNZHTk Next video: [not uploaded yet] What is a covered expatriate: https://youtu.be/-8BUfwCcK6o Link to IRS.gov: https://ift.tt/2NhGcrL The Internal Revenue Service announced new procedures that will enable certain individuals who relinquished their U.S. citizenship to come into compliance with their U.S. tax and filing obligations and receive relief for potential back taxes owed along with foreign reporting penalties such as Form 5471, 8839 and the FBAR form. Requirements: The Relief Procedures for Certain Former Citizens apply only to individuals who have not filed U.S. tax returns as U.S. citizens or residents, owe a limited amount of back taxes to the United States and have net assets of less than $2 million. Only taxpayers whose past compliance failures were non-willful can take advantage of these new procedures. Many in this group may have lived outside the United States most of their lives and may have not been aware that they had U.S. tax obligations. Eligible individuals wishing to use these relief procedures are required to file outstanding U.S. tax returns, including all required schedules and information returns, for the five years preceding and their year of expatriation. Provided that the taxpayer's tax liability does not exceed a total of $25,000 for the six years in question, the taxpayer is relieved from paying U.S. taxes. The purpose of these procedures is to provide relief for certain former citizens. Individuals who qualify for these procedures will not be assessed penalties and interest. The IRS is offering these procedures without a specific termination date. The IRS will announce a closing date prior to ending the procedures. Individuals who relinquished their U.S. citizenship any time after March 18, 2010, are eligible so long as they satisfy the other criteria of the procedures. Relinquishing U.S. citizenship and the tax consequences that follow are serious matters that involve irrevocable decisions. Taxpayers who relinquish citizenship without complying with their U.S. tax obligations are subject to the significant tax consequences of the U.S. expatriation tax regime. Taxpayers interested in these procedures should read all the materials carefully, including the FAQs, and consider consulting legal counsel before making any decisions. For more help follow the link to https://ift.tt/1RfwK1f Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/aZW508BNZWk IRS Medic

IRS Streamlined Disclosure Program 2019 updates

IRS Streamlined Disclosure Program 2019 updates

https://ift.tt/2N5i0ZD https://ift.tt/2Nw9pxU In this video will be discussing the new and updates regarding the IRS streamlined disclosure program - in particular how it relates to US taxpayers abroad. We are then going to follow up this segment with a video on on the new IRS program Relief Procedures for Certain Former Citizens, and after that we will give a few hypotheticals so we can show compete and contrast the two programs - which one is better for US persons who have not filed returns ever on in a long time. The Streamlined Programs was announced in June of 2014 and honestly - I am a very vocal critic on the IRS, but this is one program I do believe they got correct. At least when it comes to US filer abroad. Now the program can’t undo all the bad the code created - filing is still far too expensive - but the program itself is helpful overall. If you have questions abotu what type of disclosure to make follwo the links to irsmedic.com Parent & Parent LLP 144 South Main Steet Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/s_QxqiNZHTk IRS Medic

The ULTIMATE Social Security + IRS scam - the inside story

The ULTIMATE Social Security + IRS scam - the inside story

If you are fine risking a prison sentence and being completely dishonest, there is a little known tax scam where filers report too much income. There's a reason why. Will they ever get caught? https:///www.irsmedic.com Most tax scams have one thing in common - reporting too little in income. But there’s one scam I learned years ago from a Revenue Officer who is friend of mine. Now that he’s retired I can tell you about it - not because I want you to do this - oh it is most certainly a violation of US law that will put you in prison for many years if you get caught. Yet it is one of those things the government doesn’t want you to know about as it reveals a significant lack of control over something they pretend is well-administered. . A lack of control that is entirely foreseeable when you take something as complicated as the US tax code and combine it with our very expansive federal law that it must interact with.. So let’s get into this scam - one that you shall never do. Let’s suppose you are 58 years old. And you haven’t reported a lot of income your entire career and you start thinking about your social security benefits. You got most your recent statement from the social security administration and you see your retirement will be pretty light. Your income looks to be both fixed and very low. This saddens you. You want to get the maximum social security benefit but based on your contributions you will get the least. Let us suppose that you know that if you contributed the maximum for 40 quarters or 10 years, that you know that would qualify you for the maximum monthly benefit. And now let us suppose you are cavalier with the truth and your own freedom. So you file 10 years of tax returns with a Schedule SE filled out showing that you owe the maximum in self-employment tax - and this is key - self-employment is where your social security taxes are calculated. So even though these 10 returns show a ton of income and a ton in taxes you owe, you file them anyway. You file them anyway because you know that once the returns are filed - as long as they are not examined by an IRS examiner or another investigator, you know they will be processed and the 10 year statute of limitations on collections will begin to run. And you know that if you just lay low for a bit, the IRS will eventually give up looking for you, unless you give them a reason to look for you. And your tax debt will expire. So now that you are 68, you no longer owe the IRS anything and you based onto contributions you said you made - are now entitled to the maximum allowed by law for the rest of your life. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/3gpFcc0E8qc IRS Medic

Why the IRS just LOVES to attack the poor

Why the IRS just LOVES to attack the poor

https://ift.tt/1RfwK1f The entire idea behind progressive income tax rates - like the ones US tax code demands - is that the rich pay nearly all the taxes, and the poor pay virtually nothing. The tax rates for the rich are higher, exemptions are blown out, and deductions are phased out. Meanwhile for the poor - their tax rates are the lowest - assuming they exceeded the exemption amount in the first place. So you would think, the poor - as a whole — would have very little reason to ever have a problem with the IRS. So now to the story - ProPublica - a website I believe to be left-leaning, still, regardless of your political beliefs - did some great reporting into an issue tax attorneys like myself are too familiar with. The IRS attacks the poor who are weak. In fact, the IRS loves to attack the weak. The IRS loves to attack the weak because they can’t fight back. From a recent article written by Paul Kiel: Auditing poor taxpayers is a lot easier: The agency uses relatively low-level employees to audit returns for low-income taxpayers who claim the earned income tax credit. The audits — of which there were about 380,000 last year, accounting for 39% of the total the IRS conducted — are done by mail and don’t take too much staff time, either. Isn’t this crazy? Nearly half of an audits the IRS conducts are waged against poor people! How outrageous is this? Oh oh it is worse than you thought. Here’s a quote from the National Taxpayer Advocate Nina Olsen. “A survey by the Taxpayer Advocate Service found that more than a quarter of Earned Income Tax Credit recipients who were audited didn’t even understand that they were under audit." So why is the IRS doing this? I’ll give the most charitable response I can. The IRS doesn’t have the auditors it used to. The IRS claims to be about 75% of their highest strength, but I can tell you , they are operating at 50% of effective strength. Audits can take years to complete and demoralized examiners often retire as soon as they can, sometimes in the middle of an audit. Now why does the IRS not have the budget? Well according to Republicans political shenanigans occurred that have yet to be accounted for. So their response is to cut the IRS’s budget and keep it that way. Yet, for some reason - the IRS still wants to have great statistics to brag about to Congress and to impress the America people with. See - the IRS bemoans that auditing the so-called rich - another clumsy label - is hard. Yeah I suppose it is. There are tax firms like ours whose job it is to make the IRS’s job as hard as possible. Because yes we do enjoy giving the IRS a challenge. But lost in why it is so hard to audit the rich is the problem of the overcomplicated tax code. It is not nearly as hard to audit the so-called rich in other countries because their tax systems tend to be adminstratible - they simply don’t have the vague, massive ever expanding tax code. The US tax code is so complicated no one person understands it all - not even close. So firms like mine take advantage of the IRS’s own ignorance of its own seemingly endless code and regulations the best that we can. Using the vastness of the tax code against the IRS can be quite an effective strategy. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/V2-VHZyLgko IRS Medic

Making large cash deposits and IRS Form 8300

Making large cash deposits and IRS Form 8300

https://ift.tt/1RfwK1f https://ift.tt/29yqaCV The Bank Secrecy Act creating filing obligations for (1) foreign bank accounts over $10,000 on an FBAR form or face absolutely insane penalties and perhaps criminal exposure (2) when you come into the US with $10,000 or more in cash you must declare it or face absolutely insane penalties or perhaps criminal exposure and lastly what we are discussing in this video (3) created the requirement that when you deposit $10,000 or more in cash, a bank has to file a Form 8300 with the IRS. Or, if someone suspects you are trying to get around Form 8300, they can file one on you any way. Do you see how this could be a little insane? Form 8300 is required to be filed any time there is a cash deposit over $10,000. But also could potentially be filed when the deposit is under $10,000 when someone’s feelings tell them to do so. This means a Form 8300 could be imposed on ANY cash deposit depending on the subjective determination of a bank employee. Do you see how these wildly expansive reporting requirements aside from being mind-blowingly unconstitutional completely undermine any claims that Form 8300 is a legitimate crime fighting tool? Oh yeah, and Form 8300 is required to be filed by many other business besides banks who deal in cash. That’s a lot of forms. Let me explain the ridiculousness this way. When you dump useless data into useful data, you just made your useful data - that you worked so hard to get - useless. And it will stay useless until there is a way to segregate the useful from the useless. Which brings us back for Form 8300. Form 8300 is required to be filed so often it doesn’t mean anything. Even the US treasury admits to such. The best they can claim is that Form 8300 is used to discover patterns. But this has always seemed to be more a theoretical justification rather than something that has actually been used to find actual criminal conduct. And even think of this $10,000 threshold. It hasn’t change since 1970. Yet we know that $10,000 in 1970 is equivalent to around $65,000 today. But Treasury still refuses to admit that inflation exists - and are still fixated on that $10,000 number. So this about it this way. $10,000 today is would be about $1500 in 1970. Do you think congress intended the Bank Secrecy Act to apply to transactions of $1500 in 1970? Now I wasn’t alive yet - so I have to rely on the archived Congressional record. And you know — I don’t see it there. So here’s the bottom line. You are much better off making one huge deposit where you know a Form 8300 will be filed - because Form 8300 will likely never see human eyes, as opposed to trying to avoid the Form 8300 filing requirement by structuring cash deposits in smaller increments, which could trigger a Form 8300 being filed anyway. https://youtu.be/YLAXsnAWyhQ IRS Medic

How to enter or re-entering the US with a large amount of cash

How to enter or re-entering the US with a large amount of cash

https://ift.tt/1RfwK1f This is not legal advice. The government is too unpredictable for that. Rather these are two true stories involving clients of ours. If you ever traveled into the US, you may be very leery about having a so called large amount of cash with you. You may know that if you have $10,000 or more with you, you could have a serious problem entering the US. But still - is it possible to fly into a US airport with millions of dollars in cash and totally get away with it? George had $2 million dollars in a Swiss bank account. He knew the government was cracking down on undeclared bank accounts abroad so as soon as he could he withdrew all of his money in cash and placed it in a safety deposit box in a Swiss bank. Now George did come clean with the IRS, as we entered him into a disclosure program. But his cash - he really wanted his cash to live on in the states. He looked into how to get his money from Switzerland and found that there were bonded couriers that would do the deed for him. But they charge a 5% commission!  George really isn’t the kind of guy to hand over $100,000 as a fee to a total stranger. So he had me look into it. So I researched the issue the best I could and determined to the best of my knowledge that it is 100% legal to bring in huge amounts of cash as long as FinCEN form 105 is properly filled out. Or so I hoped .  So that’s what we did — I filled out the form and drafted a cover letter for George to hand to customs when he arrived at JFK. So George and his son traveled to Zurich. Packed $2 million dollars in cash into two duffle bags. He and his son walked to the airport in Zurich and hopped on a flight back to JFK.  Watch the entire video to find out what happened to George. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/mLIPQuFlOaM IRS Medic

What is a covered expatriate? How can you avoid being one?

What is a covered expatriate? How can you avoid being one?

https://ift.tt/1RfwK1f If you are trying to figure out what a covered expatriate is and isn’t and are terribly confused - there's good reason. So I'll explain it as quickly as I can. Think about it this way:  If you relinquish your US citizenship or are long-term US resident who ceases to be a lawful permanent resident in a way - by default you are covered expatriate. Hi I’m Anthony Parent of IRSMedic and in this video I will explain what it means to be a covered expatriate and I will also explain how NOT to be one. Additionally, I will discuss a new IRS relief program for those who have expatriated incorrectly. So why is it bad to be a covered expatriate? If you are a covered expatriate, you are subject to the exit tax. The exit tax sort of works like the federal estate tax. The concern Congress had is that prior to death, US persons subject to the estate or death tax as it has been referred to, could easily avoid it merely by expatriating - that is giving up citizenship - before death. So Congress, in such desperate need of your stuff, created the exit tax, in large part, as a way to frustrate taxpayers from circumventing the estate tax. So the thing is the federal estate tax only starts to apply when you have a lot of assets so too, does the exit tax. The difference is that the asset test for expatriating is lower around $2 million compared to the estate exemption which is something you don’t need to worry about until your assets go over $5 million. And also with the exit tax there is an income test as well. The point is that for many middle class Americans who are covered expatriates, this means nothing to them, as even if the tax were applied to them, they would owe nothing.  Rather, the biggest downside for most people is that as covered expatriate, the law could still treat them as a US person for tax purposes - years after they gave up their US citizenship. That’s right - just because you are no longer a US citizen, it does not mean the IRS feels you should not be taxed. Pretty crazy, isn’t it?  So the problem is that the government - at some point - could try to claim you still owe taxes and subject you to the horrific penalty regimes of the FBAR and foreign account tax compliance act or FATCA - well after your ceased to be a US person. So for many people the real reason they don’t want to be a covered expat is because they want finality. They don’t have to wait and guess to see if the IRS is done with them  So now you know what a covered expat is, let’s talk about how not to be one.  Certify a form 8854. This means you need to be in compliance for the last 5 years. Now before you run off and file the last 5 years - stop right there and get legal advice - you may not actually have to file the last 5 years, and also you may want to use a disclosure program to reduce or eliminate massive penalty exposure. Follow the links to irsmedic for more help.  File and pay the exit tax if it applies.   The assets over a two million and income over around $161,000 could subject you to this. But this does not mean you have to pay. There are certainly ways to plan to avoid this tax bite.  And there are other exceptions. If you were born a dual national, you may not have to pay the exit tax even if you were a billionaire who did no planning.  And this is what is new - the IRS announced a program in  September of 2019 called Relief Procedures for Certain Former Citizens. This is a way for certain kinds of US expats - many so-called accidental Americans - to obtain relief from being deemed a covered expatriate.  Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 (203) 269-6699 info@irsmedic.com https://youtu.be/-8BUfwCcK6o IRS Medic