The Mark Crawford/Rand Paul Foreign Account Tax Compliance Act (FATCA) lawsuit reached its way up the 6th Circuit Court of Appeals. With the known trend of big government finding in favor of big government, I along with others, were hopeful for a victory. But the dismissal of the case — well, that did not surprise too much. Fortunately, the attorneys for the Plaintiffs, Jim Bopp and Richard Coleson, were kind enough to summarize, via a memorandum dated August 22, 2017, precisely what the 6th Circuit got wrong.
The United States and Taiwan have no tax treaty. Nor an extradition treaty. But that does not mean the two countries don’t work together to defeat tax non-compliance. The bad news for our clients with Taiwan heritage is that US tax rules are beyond complicated, and they might not have ever received good tax advice. The good news is we are experts at fixing difficult problems with the stakes are high.
A tremendous amount of physical and human capital moves between the US and Israel every day. Yet, the US tax system is far from modern. In fact, the US tax code slows down trade between the two countries, along with every other country in the world. Adding more problems is the imposition of the Foreign Account Tax Compliance Act (FATCA), which puts additional burdens on Israeli financial institutions and hinders US-Israeli citizens from doing business around the world. Our job is to help our clients manage these realities and succeed despite the existence of US tax code.
The US taxes its persons on a worldwide basis. So what you earn in Japan, even if it is taxed by the Japanese taxing authority, is subject to additional taxes by the IRS. This is true even if you have a “tax-free” account in Japan. However, you are entitled to a credit for taxes paid. In the alternative, there is a foreign income exclusion which will exempt a portion of your income from income taxes. While there is a US-Japan tax treaty, double taxation may still occur. It is critical to see if either the foreign tax exclusion or foreign tax credit will apply.
France and the United States have been allies since the US Revolutionary War. Recently, the US hasn’t been so friendly…at least on one front. With the imposition of the Foreign Account Tax Compliance Act (FATCA), the IRS has created massive regulatory burdens on foreign banks, including those in France. Additionally, FATCA has made life difficult for US expats in France, and also has sprung difficulties on French immigrants to the US, who unwittingly became US persons and now all their income — including income from assets and investments in France, is subject to the universal tax jurisdiction of the United States. We are experts at dealing with the law, and remove all the compliance risks for our clients that we can.
Hong Kong is the international avatar for the accumulation of wealth. Yet not every American goes to Hong Kong for this reason. However, due to the extremely high cost of living, even middle-class families find themselves with significant assets and complicated investments. This is problematic for two reasons. First, the IRS taxes its citizens around the globe. Second, there is an onerous amount of tax compliance required by the IRS — an amount one would expect for a large multi-national corporation — not an individual, and even individuals with rather large assets and business interests. Fortunately, this is where we excel. We are well-versed in the types of issues US expats in Hong Kong experience and have Mandarin-speaking tax specialists on staff who can properly account for and report Hong Kong business ventures and other investments.
The Chinese national who has become, or is looking to become a US person, faces many challenges. One of the largest threats is a US tax system that is illogically complicated. The second problem is it is hard to find a US tax firm that understands Chinese culture and economics. Fortunately, this is where we excel. We have Mandarin-speaking tax specialists, who as Chinese nationals themselves, are fully versed on the challenges and opportunities that face Chinese-Americans.