On March 18, 2010 President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act which provided tax incentives to employers who hire and retain workers.  To pay for these benefits, the HIRE Act implemented new foreign withholding and information reporting requirements.HIRE Act and effect on International Taxation

The HIRE Act contains several provisions of interest to clients with foreign accounts and foreign trusts including the FATCA provisions.

Under FATCA, certain U.S. taxpayers holding financial assets outside the U.S. must report those assets to the IRS.  In addition, FATCA will require foreign financial institutions to report directly to the IRS certain information about financial accounts held by U.S. taxpayers, or by foreign entities in which U.S. taxpayers hold a substantial ownership interest.

The U.S. government has stepped up its requirements for reporting US and foreign assets and income.  Below are some of the more commonly required issues and filing requirements:

  1. Form TD F 90-22.1 “Report of Foreign Bank and Financial Accounts” (FBAR)
  2. Form 8938 “Statement of Specified Foreign Financial Assets”
  3. Form 3520 “Annual Return To Report Transactions With Foreign Trusts and
  4. Receipt of Certain Foreign Gifts”
  5. Foreign Rental Properties
  6. IRS Offshore Voluntary Disclosure Initiative (OVDI)
  7. Expatriation (877A)

Failure to file these forms properly and in a timely manner can cause high net worth individuals to be subject to substantial financial penalties, seizure of assets, and even legal prosecution .  A full discussion of the factors involved in the proper filing of these and other key filings can be found in our Article “Common International Tax Forms and Filings”.

International tax forms and filings should always be prepared by an experienced International CPA who is also familiar with the many international legalities involved.

Contact Us for help in the analysis and timely preparations of all your international tax filings.