Tax Planning
Amended Tax Treaty Effectively Ends Swiss Bank Secrecy for U.S. Clients
Switzerland’s tradition of bank secrecy dates back three centuries. In 1713, the canton of Geneva enacted an ordinance that prohibited bankers from divulging any information about their clients’ transactions. Since then, the Swiss have successfully rebuffed demands to end or restrict bank secrecy from adversaries ranging from Napoleon to Adolph Hitler. But while Napoleon and [...]
To Attract Foreign Direct Investment to the USA, Start by Abolishing These Laws and Regulations
Last November, President Obama said that the United States has become “lazy” about attracting foreign investment, and suggested the government should become “more aggressive” to attract overseas dollars. Well, Mr. President, I have several suggestions. First, repeal the notorious Foreign Account Tax Compliance Act (FATCA), which will impose a 30% withholding tax on many money [...]
Should You Plan on Dying in 2012? [Part I]
You might, if you’re a U.S. citizen or permanent resident, and want to spare your heirs from paying estate tax at a rate as high as 55%. But don’t make your funeral arrangements just yet. Congress might change the law before the end of 2012. In 2001, Congress radically retooled federal wealth transfer tax laws. [...]
Will Mitt Romney Tone Down the U.S. “War on Offshore?”
I don’t spend much time following the U.S. presidential campaign. My assumption is that every candidate will promptly forget everything he promised as soon as he is inaugurated. This is particularly true if the promise is to limit governmental powers or authority. For instance, candidate Obama promised to close Guantanamo Bay prison, end warrantless wiretapping, [...]
IRS: Offshore Banks Will Need to Disclose Precious Metals Held by U.S. Clients
Earlier this week, I participated in to a teleconference sponsored by the Society of Trust and Estate Practitioners and the International Law section of the American Bar Association. The conference addressed the expanded offshore asset disclosure requirements brought into effect by the Foreign Account Tax Compliance Act (FATCA). (For background on FATCA see here, here, [...]
IRS Admits Offshore Enforcement Efforts Leading to Soaring Expatriation Rates
Occasionally, the U.S. Congress discovers to its great surprise that the agency it created to collect revenues for the federal government, the Internal Revenue Service, engages in systematic abuse of taxpayers. In one such moment in 1979, Congress created the Office of the Taxpayer Ombudsman as a taxpayer advocate within the IRS. This office eventually [...]
IRS Makes Offshore Voluntary Disclosure Framework Permanent
U.S. permanent residents and all U.S. citizens, no matter where they live, to declare virtually all offshore accounts with an aggregate value of $10,000 or more. Income generated from these accounts is also taxable. I most recently wrote about these obligations here. U.S. citizens living abroad have a unique reporting burden, as no other civilized [...]
Estate Tax: “Valuation Discounts” Under Attack
Several proposals now circulating in Congress would crack down on popular estate-planning techniques. The one the IRS—and tax-loving congressional representatives—dislike the most are “valuation discounts” associated with family limited partnerships and related entities. The IRS has fought valuation discounts tooth and nail, but the courts have, with some exceptions, generally upheld them as reflecting market [...]
Live Offshore and Earn Nearly $200,000 Annually, Tax-Free
The United States is one of the very few countries, and the only major country, that taxes its citizens, no matter where they live. If you haven’t lived in the United States in decades, you must pay tax on your worldwide income as if you never left. Even “accidental” U.S. citizens born overseas with at [...]
Your Second Home—Offshore
Owning real estate in another country provides many benefits for U.S. investors: * A non-reportable offshore asset (if owned individually). * A refuge in times of political or economic uncertainty. * The possibility for profit from rental income or if the value of the property appreciates. * In one country (St. Kitts and Nevis), purchase [...]