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New IRS Regulations Require Reporting of Interest Payments to Certain Nonresident Aliens On April 19th, the Internal Revenue Service (IRS) issued final regulations extending information reporting requirements to include U.S. bank deposit interest paid to nonresident alien individuals who are residents of any foreign country with which the U.S. has either an income tax treaty or tax information exchange agreement. The IRS stated that these regulations are part of its effort to combat international tax evasion and to encourage other countries to assist in the implementation of the Foreign Account Tax Compliance Act (FATCA) enacted as part of the 2010 Hiring Incentives to Restore Employment (HIRE) Act. In essence. interest aggregating $10 or more paid by U.S. offices of financial institutions to certain nonresident alien individuals on or after January 1, 2013 is generally subject to reporting by the payor on Form 1042-S, “Foreign Person's U.S. Source Income Subject to Withholding,” for the calendar year in which the interest is paid. For more information, please contact Leslie A. Share, Dennis Ginsburg, Jose Nuñez, Shawn P. Wolf or Todd Rosenberg Disclosure Program ("OVDP") for taxpayers with certain undisclosed offshore assets. Participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties. Participants face a 27.5% penalty, but taxpayers in limited situations can qualify for a 5% percent penalty. Smaller offshore accounts will face a 12.5% penalty. People whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the new OVDP will qualify for this lower rate. As under the prior programs, taxpayers who feel that the penalty is disproportionate may opt instead to be examined. For additional information, contact Leslie A. Share, Dennis Ginsburg, Shawn P. Wolf, or Eric Satin. Articles "Preserving the Community Property Character of Marital Assets When Moving To The United States" "Proposed Legislation Once Again Seeks to Alter the United States Expatriation Rules" "Foreign Spousal Rights and Investment in the United States" "Are You Contemplating U.S. Income Tax Residency Status? If so, Plan Accordingly" "U.S. Income Tax Withholding and Beneficial Ownership," Caribbean Today, June 2007
The Impact
Of An Installment Sale And The Potential Branch Profits Tax Liability For
Any Foreign Corporation Doing Business In The U.S. Foreign Life Insurance Trusts - More Bang for the U.S. Buck? Taxation of the Internet--A Work in Progress That Doesn't Yet Work Irrevocable Life Insurance Trusts Have Potential Tax and Estate Planning Benefits Final Domestic v. Foreign Trust Status Regulations Include Significant Changes The Florida Intangibles Tax--A Less Evil? Like Kind Exchanges Can Defer Tax On U.S. Real Estate Sales Do You Have Business Profits From a United States Permanent Establishment? Offshore Wealth Preservation Trusts--The Anderson Case
U.S. Tax Considerations of Foreign Investment in U.S. Real Estate Speaking Engagements
February 20, 2012—Practice
Asset Protection
May 25, 2012—Federal Income
Tax Reporting, Compliance, and Tax Controversy Issues - Hot Topics and
Practical Strategies
September 21,
2012—International Tax Update (Foreign Taxpayer)
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