IRSMedic

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Do you have a question on IRS Tax Relief I didn't answer? Put in the comment below and subscribe! I'll answer the best ones in an upcoming video. https://ift.tt/2jsz1gT The most helpful way to think about IRS tax relief services for outstanding back taxes is two ways. 1. You can not afford to pay or 2. You truly don't owe the taxes. Other types of amnesties involve limiting criminal exposure, unfiled returns, and punishment mitigation. And there is the IRS First Time Penalty Relief program that is guaranteed as a matter of right. You merely need to request it. Sometimes it simply requires a call, others instances the petition must be in writing. Additionally, the IRS is very interested in assessing large penalties for those that have unreported overseas accounts or assets, such as inheritances from aboard and pensions located abroad. The penalties can get out of control fast - starting at $10,000 per year and the capability to reach so high they could actually completely ruin somebody. And another type of tax relief is a general tax relief for when taxpayers are in a declared disaster area because of a hurricane, earthquake or some sort of natural or even man-made disaster. These amnesties normally push back dues dates to everyone in the affected region to eliminate potential penalties, yet it will negate ones requirement to cover the inherent taxes. If however, your capacity to pay was greatly decreased by natural disaster situations, or perhaps say something like a terrorist attack, this fact should be properly incorporated into a claim you can't manage to cover the tax invoice in full. Is there any tax relief available for taxpayers with psychological illness? We frequently get calls from family and friends of a taxpayer who has both tax issues and mental health issues. The largest difficulty in these cases is eliminating the fear. Cases with mentally ill clients are difficult and need more patience, but are incredibly rewarding when we can solve at least one of our clients' problems. Is IRS tax relief that a scam? There are a whole lot of tax relief firms around who advertise heavily with TV and radio advertisements, and the internet. A number are, in fact, scams and not legitimate. The tax resolution business is filled with people asserting that are "top rated tax relief firms" and "the very best tax difficulty attorneys." A number of these people making these claims aren't attorneys that's fine, a non-lawyer can assist you, but lying is dishonorable. Yet they are not called on it, closing their doors when the complaints become too big and then reopening under another name. Many these company pay for bogus testimonials or use other services to suppress negative reviews. Even the IRS doesn't govern these firms to some meaningful level, the Federal Trade Commission will be more competitive, but there is only so much they could do. The very best advice would be to exercise due diligence on who you hire, if anyone, to help you get this issue behind you. The fantastic thing is there are a lot of quite good tax relief specialists out there. A lot of these are my friends. A few are CPAs. Some are actual real tax relief lawyers. We're tax lawyers so the instances best suited for people are where: 1. There is a fear of criminal vulnerability 2. The stakes are rather significant 3. Businesses are involved 4. The problems are incredibly complicated (particularly when overseas assets or income is included), 5. Or it is a case where the client prefers to have the security of their attorney-client privilege. Can IRS tax relief differ from state to state? Absolutely. The IRS accounts for the various differences in the price of living. Yet, the differences sometimes are not enough. The reason is the IRS will require an average of a geographical area that might not be really be realistic. For instance, from the hyper-wealthy Fairfield county in Connecticut, the biggest city is Bridgeport, which can be quite cheap to live in, although a bit distressed in appearance in security. Additionally, the IRS Office of Appeals is different from region to region. The quality and standard of Appeals Officers differ greatly. It is crucial to know this going in, as there might be a way to change venue. Additionally, some states are what are known as community property states. At a community property state, the IRS could reach into half of the the assets of their non-liable spouse. This can cause quite a complicated scenario for us, particularly in the event of outstanding payroll tax liabilities. Arizona California Idaho Louisiana Nevada New Mexico Texas Washington Wisconsin Alaska is an opt-in community property state. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] https://ift.tt/1RfwK1f by IRS Medic

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The truth behind Al Capone’s tax evasion conviction should outrage anyone with a functioning brain. As a tax attorney and one-time criminal defense attorney, there are few bigger outrages than Al Capone’s tax evasion conviction. “You see this is why we need the income tax! To put people like Al Capone behind prison where he belongs. The other laws can’t catch him, but the good old income tax, sure helped us out of jam here. YET THE ONLY REASON AL CAPONE BECAME A SUPER GANGSTER WAS BECAUSE OF THE INCOME TAX! the Alpha and omega of Al Capone the Gangster is the 16th Amendment! There are a lot of myths out there. And I am going to show you why they just don’t stand up to scrutiny. Other laws did stop him Al Capone was put behind bars. Yeah he got pinched for a weapons charge. Served 9 months. Kind of touchable Al Capone attempted to pay his taxes but the Treasury refused to deal with him. The set him up for a conviction. Unfortunately this still happens to this day. 3. The amount of income Al Capone claim he made was enough to support his lifestyle. Further, Al Capone was a professional gambler, he owned race tracks and had substantial losses. 4. Al Capone was the scape goat for progressive malfeasance Progressives pressured the federal government that horrific poisons be added to industrial alcohol that was being re-distilled to make fairly safe for consumption. But these additional poisons were so powerful, the re-distilling process did not work (unknown to anyone) and people were becoming blind after 3 drinks and dead after that. It is estimated that 10,000 people were murdered by drinking alcohol that was intentionally poisoned. Sorry, this death count far exceeds Al Capone. So who went to prison for this? No one. Progressives like Wayne Wheeler of the The (pretty racist) Anti-Saloon league was ecstatic about this program. when informed it was killing people, he responded: “If America can be made sober and temperate in 50 years a good job will have been done.” You see if wasn’t an out of control federal gov’t that was the problem. It was the arrogance and hubris of progressive ideology. And just plain evil. To quote C.S. Lewis: “Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.” For me, I would rather be ruled by Al Capone than by progressives. At least Al Capone knows his terrible things are kind of bad. A progressive on the other hands, think their bad things are good. The Revenue Act of 1862 and 1863 were prior to the 16th Amendment but were held to be constitutional. Why? A personal income tax is a wartime measure. The thing is, the modern income tax is a wartime measure. So who are we fighting? And if our objective was to defend freedom and liberty it sure as shit seems like we lost that battle a long time ago. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] https://ift.tt/1RfwK1f by IRS Medic

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Don't let the complicated US tax code stop you from investing in the US. The IRS is something to be concerned about, but it can be managed. The Recently passed Tax Reform Bill with a 21% corporate "C" tax rate and Qualified Business Deduction for pass-though taxpayers is generating considerable interest from non-US persons who are looking on a sure investment in the US. https://ift.tt/2rc9Z8T But numerous tax trap exists for those unfamiliar and somewhat familiar with the US tax code, the most complicated in the world. The decision to have income treated a FDAP (Fixed, Determinable, Annual or Periodic income. FDAP income applies to foreign persons earning income in the U.S; such persons will be subject to 30% withholding tax, or a lower rate if there is a tax treaty between the United States and the country of residency) or effectively connected is just one decision that needs to be made with care. Additionally, exercising due diligence to make sure that if an IRS Form 5472 is required that due to 25% foreign ownership of a corporation, or new in 2017, a domestic US LLC, with related party transaction is key. As the penalties for not filing a proper form 5472 are now increased to $25,000 from $10,000. The penalties can be assessed for multiple years. The IRS is on the look out for improper Form 5472 or missing Form 5472 and audits abound. Many corporations with 5472 requirement are choosing to entire into a voluntary disclosure program to eliminate or reduce outstanding Forms 5472. If you are looking for a US advisor to helpp you with your US investments, contact the international tax firm of Parent & Parent LLP. Our tax firm of attorneys, Certified Public Accountants and Enrolled Agent have one goal in mind -- to make the impact of the US taxing regime as least-punitive as possible. International Tax Planning can help you avoid some of the big problems that will absolutely cripple some foreign investors in the US. There are things you must do to eliminate the little-known US estate tax on foreign persons. There are complex attribution rules that can wipe out years of profits. Parent & Parent LLP 60 EAST 42ND STREET, SUITE 4600 New York, NY 10165 [phone] by IRS Medic

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An illustration of the overwhelmed IRS Letter 5935 & Form 15023 For years we have been claiming the US tax code is the most complicated thing in the history of history. And tasked with administrating the law is the IRS. Yet, the IRS often finds itself stumbling over its own data and routinely gets things wrong. Things that it seems the IRS should be getting wrong. And recently new evidence supporting the proposition that the IRS is overwhelmed is discovered. IRS letter Form 5935 with accompanying Form 15023. In this article, we will illustrate the problem the IRS has tracking offshore voluntary disclosures, and perhaps more importantly, stopping bigger problems taxpayers can can cause themselves by not understanding the IRS is the one who may have made a mistake. https://ift.tt/2qUjQQJ Some background on the IRS Pre-clearance form for Offshore Voluntary Disclosures Submitting a Voluntary disclosure can be onerous work. But when a client wants to come clean, they want to come clean as soon as possible and not wait the months, even years it can take to get a proper voluntary disclosure completed. Thankfully and to its credit, the IRS developed a pre-clearance form. The pre-clearance form allowed us within minutes of a client hiring us, to alert the IRS that this client would be coming forward. For the vast majority of cases, a pre-clearance would come back without a hitch. But for two of our clients, their pre-clearance came back with a phone call from a Department of Justice attorney who was investigating them. Once we informed them of the nature of the case an that they were making disclosures, the criminal investigations were stopped. We all breathed a sigh of relief. Additionally, what we were doing was submitting pre-clearance requests even when we were pretty sure the client would be making a Streamlined Disclosure, not a full Standard Offshore Voluntary Disclosure Program (OVDP). The difference between the two is a Streamlined includes 3 years of tax returns and at most a 5% penalty, and the Standard OVDP could be 27.5% or as high as a 50% penalty. We continued to make pre-clearances for our streamlined cases, because one of the one we got a call back on was actually someone who intended the The IRS then changed their guidance to encourage us and others not to make a pre-clearance for Streamlined Disclosures. The IRS announced they would investigate all of those who made a pre-clearance but failed to make a proper disclosure. We had no worries, as in every case a Streamlined submission or Standard OVDP was made. But then the letter was sent Our assumption was that the IRS would be able to investigate its own database to see a submission was made. This assumption proved to be wrong — I believe it comes from a decision on how to code a Streamlined Submission. Instead the IRS has been sending out Letter 5935 and Form 15023 to taxpayers who have made proper disclosures! Our response to Letter 5935 and Form 15023 We selected option three to explain the IRS that our client is fully in compliance. We are very nice about it. Again, the people who sent these letters are burdened by systems that are not telling them the things they need to know. There is no sense in taking this personal. Other responses If you have a Streamlined Submission ready to go, you can select option one. Option two seems very dangerous unless you have already spoken with an experienced Offshore Disclosure law firm. And option four make sense if you need some time to talk with someone to help you out. The outlook The IRS is not getting simpler. Be on the lookout for more errors. While the Taxpayer First Act of 2018 is working its way through Congress promises a better computer system, this has been tried many times before and has failed. While tax reform did lower taxes, it created more complexity. The root cause of all of these headaches is that we have a tax system with a primary goal that isn’t to raise revenue, but rather, to encourage the outcomes that elected (and some unelected) officials in Washington, DC desire. These are not my words, but the words of Cordell Hull, the father of the modern income tax. Maybe some day we will get smart enough to see through this folly. But until then, keeps your eyes open to the possibility that the IRS might get something really wrong. Parent & Parent LLP 144 South Main Street Wallingford, CT 06493 [phone] [email protected] by IRS Medic

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A new bill, The Taxpayer First Act of 2018 has bipartisan support and it is making its way through Congress. In this video, tax attorney Anthony Parent gives his reaction to the summary presented by the Subcommittee on Oversight of the House Ways and Means. While there are some helpful items in the bill -- in particular, more formal independence of the IRS office of appeals and the availability of the IRS Office of Appeals in more cases (pre-notice of federal tax lien filing, hopefully ), a crack down on structuring seizures of cash under the guise of the Bank Secrecy Act of 1970, and required notice of third party contact (the IRS can be very sneaky in an audit situation) Yet, a lot of the rest of the bill might do little to help taxpayers. - An insistence on calling taxpayer “customers;” - A waiver of an Offer in Compromise fee for the destitute who probably lack the resources to actually submit a viable Form 656 OIC; - A formal declaration of stated Innocent Spouse/Equitable relief policy; - A formalized grant structure for VITA (Volunteer Income Tax Assistance) Program, - A generalized idea of "better" "customer" service - A formal notification process for when the IRS shut downs (already overworked) service centers (that can't really help taxpayers all that much and often leave them with bad information) - A rule allowing IRS employees to refer low income taxpayers to Low Income Tax Clinics (you mean they couldn't before???!!) - Then a whole bunch of vague identity theft protections without once mentioning that the #1 cause of ID theft is illegal immigrants stealing Social Security numbers. - A promise to modernize the IRS's IT (this will likely be yet another waste of money; the IRS has been attempting to modernize since the LBJ administration with little luck as there are too many competing goals - The ability to pay the IRS by credit card or debit card directly (but taxpayers will still be charged a user fee -- likely around 2%) The bill will likely pass, and we do anticipate it being an overall help, but it can not cure the fatal conceit of the personal income tax that was specifically designed to strip power from individuals and shift most of it in Washington, DC. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] by IRS Medic

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Set-backs be danged. This is not over, in fact, we are closer than ever to ending FATCA and the global tax reporting nightmare for US persons living overseas. In this video, tax attorney Anthony Parent leads a discussion of the repeal of FATCA, the impacts of IRC Sec 965 "transition tax" & the hoped for territorial taxation for individuals (TTFI). The Supreme Court refused to hear the merits of the "Rand Paul" Foreign Account Tax Compliance Act (FATCA) case, Mark Crawford et. al. v Commissioner. Yet the Repeal FATCA team is not done, not by a long shot. A new plaintiff is being sought -- one who has been assessed an FBAR penalty or Form 8938 penalty and lives in the 8th District court of appeals: Arkansas, Iowa, Minnesota, Missouri, Nebraska, North Dakota & South Dakota. Additionally, a legislative remedy is still being sought to repeal or otherwise make FATCA superfluous. The transition tax, which was part of tax reform, was a bit of a mistake --- and it appears as if the Republicans who voted for tax reform recognize this. This mistake is being used as a lever to open up Congress' eyes to the disastrous consequences of Citizenship based taxation. And in the words of one of our guests, John Richardson, Esq. of citizenshipsolutions.ca, the biggest victim of FATCA and global taxation is the overworked IRS itself. Also joining is is Solomon Yue, of Republicans Overseas, one of the men responsible for getting a repeal FATCA plank inserted into the Republican national platform, and Kathleen Mistry, or AARO.org and Mistry Enterprises LLC. Kathleen works to help bring international businesses together and has seen first hand the damage of FATCA and universal tax jurisdiction of the IRS has done to the US economy. Lastly, our very familiar guest, Keith Redmond, a tireless advocate for all US persons living abroad. Those who know themselves to be US persons, and also those Accidental Americans who were born in the US, are subject to US taxing jurisdiction, but do not identify and have little connection with the US, aside form being born stateside. for those interested in helping us repeal FATCA and work to a fairer tax system, we invite you to contact your Representative and Senators and let them know the damage that is being caused. Visit aaro.org to determine who your representatives are if you live overseas. Also, feel free to join Keith Redmond's American Expatriates group on Facebook to get connection with like-minded individuals who want to see this tax nightmare ended. Be sure to follow Grover Norquist of American for Tax Reform who is also helping to lead this effort. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] by IRS Medic

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Tax audit red flags: separating fact from fiction. It is that time of the year again, when the early tax filing season is upon us and interest not he IRS is at a yearly high. In response, you will see article published claiming to give you the “secret sauce” on how to avoid an IRS tax audit, by warning you of “red flags.” There articles are all fine, I suppose, if this was 2008. However, the IRS has changed drastically since then. In this article, we will discuss what the real audit red flags are, and what is just sort of things are outdated. 2008 marked the high-water mark of IRS examinations. However, since then, the IRS field examiners are dwindling in supply. What this means is that for most people who used to be under threat of an audit, really aren’t. However, a strange by-product is that certain people are in much more likely to be audited. The philosophy of the IRS examinations was to spread the misery around equally. Everyone was subject to audit. But now, there is an entirely new way of thinking about how the IRS actually selects individuals to audit. Old: Ensure compliance all around Now: Where is the highest return on investment (ROI) of auditors’ time. So…what can be done automatically? The highest ROI is usually find where no or few IRS employees are needed. For instance the IRS has an Automated Underreporting Unit. Leaving off income items, like 1099s can result in an automatic adjustment. The IRS send you a notice (usually a CP2000) to let you know they intend on increasing your income tax, they also give you an opportunity to contest. A common area of contesting these assessments is when the IRS doesn’t take into account your basis, or cost of the property you sold. If the IRS get a 1099s for you selling real estate and stock, the IRS may consider all of the proceeds as income. Yet we know this is very unlikely — real estate and stocks cost you something . What aren’t Red Flags. These things used to be Red Flags, but perhaps are now yellow flags. Why, because it actually take an audit to determine if it is worth it to audit you! The IRS would rather now for sure an audit will likely lead to an increase, not could. But likley. Making a lot of money Higher than average deductions Claiming rental losses. Taking large charitable deductions. Hobby losses Deducting meals travel and entertainment. Claiming 100% business use of vehicle Claiming professional trader in order to immediately utilize losses instead of being limited to $3000 per year offset. Not reporting gambling wins. Claiming home office deduction Large cash deposits. Running a business. So what has the maximum ROI per employee hour worked? Very hard to beat foreign returns with foreign income — they can be penalty minefields — and obviously so. An expert on intentional taxation can look at a return and find facial errors that would lead to an automatic $10,000 penalty. It is actually pretty easy ti determine if a Form 5471, Form 8938, Form, 3520-A, Form 3520, or a Form 926 needed to be filed, but wasn’t. It is easy to determine if they are o substantially complete to be counted as being filed. And these five forms — each has a $10,000 penalty that could be assessed easily. For multiple years. So do you see how the IRS would be interesting in auditing an international return of moderate complexity? The problem is that with foreign assets and income. Your options are to: leave it off and face the prospect of huge penalties that could destroy you if detected. Do it yourself and hope for the best. Yet reporting can increase your audit risk. Hire a firm experienced with winning IRS international audits to minimize any a penalty exposure. What if you haven’t been reporting foreign income properly? The good news is that most people qualify for a streamlined disclosure program and this can really eliminate any penalty potential. We have submitted hundreds and not one has been audited as of today. For help contact us today. We help US taxpayers around the globe. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] Skype: [email protected] Email [email protected] by IRS Medic

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http://ift.tt/1RfwK1f There is nothing in the history of the world as complicated as the US tax code. And every day with new laws, new regulations, new court cases, and new procedures it gets even more complicated. Now —- the other part of this compliance sandwich — that puts you right in the middle — is that the consequences for doing something wrong. Whether intentionally or not, the impact can be devastating. I am tax attorney Anthony Parent of Parent & Parent LLP and that’s why I created the IRSMedic channel. Our content formula is simple we take the complicated code, jargon, and BS, and employ our 20 years of experience to simplify to something understandable to an actual human being, so that you can figure out what kind of action you should take, if any. Whether you are a taxpayer, a fellow tax practitioner, a fellow attorney, or even an IRS employee, my advice: Subscribe to our channel because our videos could really help you get your head and hands around a complicated US tax problem, so that you can avoid a discomfort that others might not have been not able to. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] http://ift.tt/2D0JRlA by IRS Medic

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If you are a US person and have a Controlled Foreign Corporation you may be subjected to the dreaded Subpart F rules. While tax reform initially looked promising and helpful, the result is less than desirable. While some income like oil and gas income is no longer subjected to Subpart F, tax reform instituted a hair-trigger test to determine CFC status. And perhaps more consequential, is that tax reform imposed an "excise tax" tax on retained earnings. Meaning if you avoided Subpart F over the years, you may not be able to entirely avoid a 15.5% tax on your built-up foreign income. This new taxing regime is testing our ability to find creative ways to lower our clients' tax bills, while avoiding any of the very severe foreign reporting penalties. Subscribe now so you will learn about these strategies we will be discussing in future episodes. If you are a prospective client contact us at: Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] by IRS Medic

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There is nothing in the history of the world as complicated as the US tax code. And every day with new laws, new regulations, new court cases, and new procedures it gets even more complicated. Now —- the other part of this compliance sandwich — that puts you right in the middle — is that the consequences for doing something wrong. Whether intentionally or not, the impact can be devastating. I am tax attorney Anthony Parent of Parent & Parent LLP and that’s why I created the IRSMedic channel. Our content formula is simple we take the complicated code, jargon, and BS, and employ our 20 years of experience to simplify to something understandable to an actual human being, so that you can figure out what kind of action you should take, if any. Whether you are a taxpayer, a fellow tax practitioner, a fellow attorney, or even an IRS employee, my advice: Subscribe to our channel because our videos could really help you get your head and hands around a complicated US tax problem, so that you can avoid a discomfort that others might not have been not able to. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] http://ift.tt/1RfwK1f by IRS Medic

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Joining us today from citizenshipsolutions.ca is tax attorney John Richardson as we discuss why every American is entitled to a better tax system than our current mess, a subduction where confusion crashes into consequences. Repeal FATCA and Stop Imposing Direct Taxation on the residents of other countries! – Americans deserve a first class tax system, a system that allows American citizens to compete with the rest of the world! John Richardson counsels US citizens in Canada and abroad, and can give us some insight into how U.S. “citizenship” AKA “place of birth taxation” HURTS American citizens living in other countries and ultimately HURTS America! Here is the outline of what we discussed: FATCA/CBT repeal – How are FATCA and CBT related? Why should each of them be repealed? Which of FATCA or CBTR is the greater harm? We need to change the ideas on the best way to get this accomplished America deserves a modern tax system – a tax system that allows America and American citizens to effectively compete in a global world. America shouldn’t have a tax system that prevents U.S. citizens living outside the United States from competing for the United States in those countries Why are we working so hard to repeal FATCA? Why are we working so hard to repeal CBT: the U.S. practice of exporting the Internal Revenue Code to other countries and imposing it on people who live in other countries? Who is this really hurting? How much is FATCA and other disclosure programs actually bringing in, compared to costs of resources? (auditors don’t even want to touch foreign returns) What is the result the IRS is hoping to get? What is Congress hoping to achieve by imposing direct taxation on people who are “tax residents” of other countries Why is repealing FATCA important to homeland Americans? Why should Homeland Americans be concerned about this at all? “The world is your oyster, unless you’re American” but you don’t realize until it’s too late How does our tax system impose our value system on other countries? How does U.S. tax compliance for Americans who are residents in other countries really work? How does it make it impossible for those affected by it to live normal financial lives? Saving for retirement, pensions, have business partners, have marriage partners who are NOT U.S. citizens? Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] http://ift.tt/1RfwK1f by IRS Medic

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http://ift.tt/2DvX0Ib The 2017 Tax Cuts and Jobs Act (otherwise known as the 2017 tax reform) includes a fantastic tax benefit for many entrepreneurs, self-employed individuals, and investors by allowing them to deduct 20% of their business income. The problem is that the rules are incredibly complicated. In this article, we will explain the basics of how it works and under which circumstances you may want to consult with a tax advisor so that you can best take advantage of this new tax break. A very basic example of how QBI works For this hypothetical, let's assume a taxpayer makes $300,000 in profit as a self-employed civil engineer, and he files jointly. This engineer is able to deduct 20% of his profit, in this case $60,000 from his tax return. So even before any other deductions or the standard deduction, he is taxed on not $300,000, but $300,000 less 60,000 for a taxable income of $240,000. Based on the revised tax brackets, the marginal tax rate at play in this example is 32%, meaning the QBI for this engineer is worth $60,000 x .32 = $19,000. QBI has saved this taxpayer $19,000 in taxes. A taxpayer with larger QBI stands to gain even more. For example, $10,000,000 in profit would qualify for a $2,000,000 deduction. At a top tax rate of 37%, this translates into a $740,000 tax savings. Do I need to convert to or be an S-corporation to take advantage of QBI? No. This is confusing because the original break proposed by Congress was a lowered pass-through (S-corp) taxation rate of 25%. However, this did not make it into the final bill. Instead, partnerships, sole proprietors, trusts, and S-corps owners can all take advantage of the 20% QBI. What is a Specified Service Trade or Business? A Specified Service Trade or Business (SSTB) is not able to take advantage of QBI in the same way a taxpayer whose business income is NOT an SSTB can. An SSTB is any trade or business activity involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletic, financial services, brokerage services, or any trade or business is the reputation or skill of one or more of its employees. Also included are any trades or businesses involving investing and investment management, trading or dealing in securities, partnership . Engineers and architects were specifically exempted. I am in a “Specified Service Trade.” Can I use the QBI at all? Yes, as long as your adjusted gross income falls below a certain threshold. The magic number is $315,000 for married filing jointly, $207,500 for head of household, or $157,500 for single filers. If your AGI is at or below these figures, you can claim the QBI regardless if you are listed in a specific trade or service. If your AGI is above these figures, it may make sense to consider some tax planning or strategies so that you can legally take advantage of QBI. What is the top effective tax rate if I have unlimited QBI income? The top effective tax rate for investors and business owner with QBI approaches 29.8%. This is a big improvement over the previously highest top tax rate of 39.6% and the new top tax rate of 37%. Where do things get complicated with QBI? If you aren’t already confused, the QBI deduction quickly gets even more complicated. Here are situations where the use of the deduction may be significantly impaired, or require additional planning or strategies: Where income increases and you have an SSTB even though you have non-SSTB income. Where you have multiple trades and businesses and some have losses. Where one spouse has SSTB income and the other spouse does not, but total income is high. Where income increases yet W-2 wages paid are low and/or the business is not capital intensive. What should you do to maximize the use of QBI? For our clients, especially those with worldwide income and other ventures, we are always looking for and implementing ways to maximize tax benefits through various structuring. It is important to understand that this new tax reform is ripe with loopholes that we and other practitioners continue to uncover. Some of these loopholes we believe are intentional. To learn about what we can provide to you, we invite you to contact us for a complimentary strategy session. We believe the more control our clients have, the better place the world is. It is our mission to help US taxpayers around the world make their IRS problems and tax bills a bit more manageable. Parent & Parent LLP 144 South Main Street Wallingford, CT 06492 [phone] [email protected] by IRS Medic

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http://ift.tt/2CWKqBB Tax Reform did not undo the benefits of Captive Insurance companies. Learn how this great tax shelter also gives great asset protection too. Many promoters learned that business owners are incredibly agitated about litigation and will offer what they claim are lock solid asset protection plans that MUST BE OBTAINED OR ELSE. Solicitations I’ve seen are: offshore trusts complicated US holdings structure including Wyoming and Nevada corporations over-compartmentalization of assets that leads to inefficient allocation. The problem with many of these plans is that they can create more risk than they solve. First, tax compliance and accounting cost go way up. And worse, if an offshore entity is involved the tax compliance costs are even higher. Yet ever worse, the penalties for getting even technical things wrong are met with a fury unmatched by any domestic tax issues. What the sense of creating an asset protection plan that could potentially protect you from a business or person, but puts you directly in harms way of a much much more powerful organization. The IRS? The second issue is that these complicated asset protection plans have real formalities that must be followed or a court could completely ignore the structure. This is called piercing the corporate veil. If you have a trust or structure but treat all the income assets as you piggy bank, and fail to follow corporate requirements like having meetings, all your complicated work can be completely undone. A bad asset protection plan, and which there are plenty of, can create more harm than good. It can offer no true protection yet wildly increases compliance costs and compliance risks. That's why before jumping in and engagin in something incredibly complicated, a business owner should really look closely at Captive Insurance first. It offer assets protection and allows all premiums as a deduction to the operating company, but is NOT income to the Captive Insurance Company. This is a one-sided equation that can really help you reach your goals and stay there! Contact us [email protected] to discuss of a Captive Insurance should be part of your overall strategy. Parent & Parent LLP 144 S Main Street Wallingford CT 06492 [phone] by IRS Medic

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We are joined today by guest Keith Redmond, an American overseas global advocate to talk about updates on the Repeal FATCA movement, Territorial Taxation for Individuals, and some tax traps for people who are, or are thinking about becoming a US person. Of concern in the current tax reform package - a one time 14% excise tax on deferred income for Controlled Foreign Corporations. The purpose of this excise tax is to end deferral that some large companies can take advantage of...but...people that live and work overseas that have their own corporation could get hit with this tax. This tax could ruin the smaller guys. While we are glad that people are paying to tax reform and disputing what they think are "unfair" suggestions, there is a glaring terrible tax law already in place that we think people should be outraged about. If someone comes to US with substantial assets and becomes a US person, they are taxed from date of acquisition of their assets, not the date they become a US person. And if they expatriate after that, even if the assets declined in value, they will pay the exit tax even if their assets lost money while they were a US person. Potentially, someone could inherit a property overseas while they were not a US person, do nothing with it, but have to pay an exit tax based on the entire increase in its value even though they were only a US person for a short time. We think the basis should be when you become a US person. So what’s the fix? Sell before you become a US person, they buy right back after. Get tax advice before becoming a US person…get tax advice before expatriating. Parent & Parent LLP 60 EAST 42ND STREET, SUITE 4600 New York, NY 10165 [phone] [email protected] by IRS Medic

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http://ift.tt/2yQ1Xcw The IRS has announced four new audit campaigns on international filers: 1. Those who file the Foreign Tax Credit 2. Those who file the foreign income exclusion 3. Those who used a proxy to hide ownership of Swiss bank Accounts. 4. Controlled foreign corporations who make loans back to the US-based parent code (sec 956). Tax Attorney Anthony Parent and host Claudine Gindel discuss how these audits will works the true target of the audits and what to do if you are concerned about your FBAR audits or international reporting forms (5471, 8821, 8865, 8938, 3520-A, 3520, etc) or criminal exposure. Parent & Parent LLP 144 S. Main Street Wallingford, CT 06942 [phone] [email protected] by IRS Medic

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http://ift.tt/2zkUI9r http://ift.tt/2yAw6wr H.R. 1, "the Tax Cuts and Jobs Act" which is the first draft of the 2017 Tax Reform bill fulfills some of the promises made by Republicans. However, it has got some weak points. In this video Claudine and Tax Attorney Anthony will analyze the major benefits and the drawbacks of the 2017 tax reform package. Parent & Parent LLP 60 EAST 42ND STREET SUITE 4600 New York, NY 10165 [phone] [email protected] by IRS Medic

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Watch this video as we dispel some of the top myths surrounding the current taxation (pre-2017 reform) of Americans Overseas. 1. Foreign Earned Income Exclusion allows USD 100,000 to be tax free. That money, along with any other monies earned is taxed in the American overseas country of residence. While there are some exceptions --- Dubai, for example has no income tax, the fact is most US persons in income tax-free jurisdictions exceed the approx. 100,000 exclusion.   2. US tax treaties eliminate double taxation. The US and the countries’ tax systems are not the same hence many income taxes in the American overseas’ country of residence is not recognized by the IRS hence double taxation. And savings clause undoes most tax treaties. Savings, investment, retirement accounts are not recognized by the IRS as well hence double taxation 3. Americans living overseas are renouncing because they do not want to pay taxes. •         Many Americans who renounce are US tax compliant though one does not have to be tax compliant to renounce. •         Americans living overseas do pay taxes: in their respective countries of residence. •         Americans living overseas are renouncing because they are unpatriotic.   4. Accidental Americans must enter the US tax compliance system. NOTE: As tax professionals we are bound to advise tax compliance. 5. The IRS will come after you in your country of residence and chase you down. As tax professionals we don’t make any guarantees - there will be exceptions to this rule.   6. If you are not US tax compliant, you will be treated as a criminal and the IRS will put you in jail. Criminal charges require intent… risk is not high for most, but there is risk.   7. If you are not US tax compliant, you cannot renew your US passport.   8. If you are not US tax compliant, you can be arrested at the border when entering the United States. 9. Citizen Based Taxation means the Marines “have to” come rescue you. Yes, but you have to sign a promissory note to reimburse them. Parent & Parent LLP 144 S Main St Wallingford, CT 06492 [phone] [email protected] by IRS Medic