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Tax Services for U.S. Citizens Abroad

One of our specialized areas of expertise has been developed for U.S. taxpayers residing abroad, and U.S. taxpayers residing inside the U.S with undisclosed foreign assets, and cross-border tax compliance matters. This specialized suite of services was in direct response to the IRS's estimate that there are over 10 million U.S. taxpayers who have undisclosed, offshore accounts which will be subject to IRS reporting by the implementation of FATCA (Foreign Account Tax Compliance Act).

In recent years, particularly in relation to Swiss banks, many U.S. citizens have come forward through the IRS Offshore Voluntary Disclosure Program (OVDP) and resolved their tax issues at great cost.

However, the OVDP penalty framework is very severe, and due to the complexity of the program, can be extremely time consuming and expensive from a professional services standpoint, often costing tens of thousands of dollars in legal and accounting fees. The traditional OVDP program has become stressful for many taxpayers, particularly those residing abroad, and deterred many from coming forward through the program.

Streamlined Filing - Reduce or Eliminate Penalties

In direct response to Congressional complaints about the traditional OVDP program, on June 18, 2014 the IRS announced important changes to the IRS "streamlined" filing procedures for non-resident U.S. taxpayers. The IRS program was expanded and modified to accommodate a much broader group of U.S. taxpayers. Major changes to the streamlined procedures included:

• Extension of eligibility to U.S. taxpayers residing in and outside the United States.
• No maximum tax liability threshold, which opens up the program to the largest of clients.
• Elimination of the risk assessment process associated with procedures of past programs.
• And penalty reduced from 27.5 % of highest balance to 5% for U.S. taxpayers residing in the United States. No penalty for U.S. taxpayers residing abroad.

Under the new procedures, U.S. citizens residing abroad for the last 3 years will be able to come into compliance without the fear of failure-to-file and failure-to-pay penalties, accuracy-related penalties, information return penalties, or FBAR penalties, regardless of their U.S. income tax liability (previously limited to only $1,500 per year) and regardless of their risk profile (offshore entities, accounts outside their country of residence, etc).

Now Also Available to Resident U.S. Citizens

Perhaps the most important addition, is a streamlined procedure that has now become available to U.S. citizens residing in the U.S.. Individuals residing in the U.S., who were unaware of their filing obligations, or mistakenly or inadvertently did not comply, are now eligible for a greatly reduced penalty of only 5% of the highest aggregate balance over the time period in question.

Give Us A Call Today!

Please contact us to discuss your specific situation and for a free consultation and analysis for you. We can assist you or your clients in English, Italian, French, or Spanish. We appreciate the opportunity to work with you and assisting you or your clients to become fully tax compliant as easily and cost effectively as possible.