Categories
International Tax Tax

Can the IRS Get Records from Foreign Corps that do Business in the U.S.?

In CCA 2019060408545121, the IRS asked its tax attorneys whether a foreign corporation that conducts business with a limited partner in the U.S. had to produce records.  Our tax laws provide address this very topic, as noted in the CCA. The CCA serves as a reminder that failing to provide records for transactions with foreign […]

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Employment Tax International Tax Tax

LLC Cannot Use Crewman’s Exemption for Employment Taxes

Can a U.S. citizen who owns and operates a vessel outside of the U.S. avoid paying U.S. employment taxes for its crewmen by using a foreign legal entity? The court considered this issue in DAF Charters LLC v. Commissioner, 152 T.C. 14, for a single member LLC formed in the U.S. that was owned by […]

Categories
International Tax Tax

Can Foreign Government Use U.S. Court to Collect From U.S. Person?

If a U.S. person commits tax fraud under the laws of a foreign county, can the foreign country’s tax collector use the U.S. court system to collect from the U.S. person? The court recently addressed this in In re SKAT Tax Refund Scheme Litigation, No. 18-md-2865 (LAK) (S.D.N.Y. 2019). Facts & Procedural History The plaintiff […]

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International Tax

U.S. Taxpayer With U.S. Residence Cannot Exclude Foreign-Earned Income

There are a number of tax issues that U.S. citizens and residents who live abroad have to consider.  One of these is whether they qualify to exclude their foreign-earned income in computing U.S. income taxes.  This exclusion has resulted in a number of tax disputes.  The Leuenberger v. Commissioner, T.C. Summary Opinion 2018-52, case addresses the […]

Categories
International Tax

FBAR Not Limited to $100,000, Willfulness Upheld

There have been a number of recent court cases involving foreign bank account or FBAR reporting penalties.  This is likely due to the significant amount of the penalty and that many do not fully appreciate the amount of the liability they face if caught not complying with the FBAR rules.  The recent Norman v. United […]

Categories
International Tax

Payments to Foreign Student Studying in U.S. Subject to Tax

We get quite a few questions from students who are in the U.S. on student visas as to whether their research awards are taxable in the U.S.  The answer depends in large part on the terms of the applicable tax treaty and whether the awards are compensation for services or pure grants. The recent Dovzhenok […]

Categories
International Tax

Airline Pilot Stationed Overseas Not Entitled to Section 911 Foreign Income Exclusion

U.S. income tax laws can be challenging for U.S. citizens who live outside of the U.S. This is particularly true for airline pilots who accept jobs overseas. The recent Acone v. Commissioner, T.C. Memo. 2017-162, case addresses the challenge of determining whether an airline pilot stationed overseas qualifies for the Section 911 foreign income exclusion. […]