international tax Archives - Page 2 of 2

How to File Delinquent International Tax Returns

April 23, 2026October 15, 2020 by Brotman Law

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If you are not in need of the Streamlined Procedures because you do not owe additional tax, and you have reasonable cause for not filing an informational return, you may file the delinquent information returns along with an explanation of the facts that support your claim of having reasonable cause for failing to file on time. You must do this before a civil examination or criminal investigation has been opened.

Key Takeaways

While filing delinquent will not automatically throw you into audit category, it does not guarantee that you will not be audited in the future.
Taxpayers who do not need to use the Streamlined Filing Compliance Procedures to file delinquent or amended tax returns could still have additional issues.
They should file the delinquent information returns with a statement of all facts establishing reasonable cause for the failure to file in a timely manner.

What Is the Offshore Voluntary Disclosure Program?

April 23, 2026October 15, 2020 by Brotman Law

Previously, the IRS had two programs, Offshore Voluntary Disclosure Program (2009) and Offshore Voluntary Disclosure Initiative (2011), which have been discontinued. In their place, the IRS has implemented a new program “affectionately” known as Son of OVDP, but is still known as OVDP.

Key Takeaways

Previously, the IRS had two programs, Offshore Voluntary Disclosure Program (2009) and Offshore Voluntary Disclosure Initiative (2011), which have been discontinued.
The main difference to the new OVDP is that there is no deadline. The stipulation is that the IRS demands full cooperation, because if you get caught concealing foreign assets while you are in the program, all bets are off.
Step 1: The taxpayer must submit a pre-clearance request to Criminal Investigations on Form 14457. The latest version of the form was released in March 2019.

How to Appeal an FBAR Penalty

April 23, 2026October 15, 2020 by Brotman Law

If you cannot come to an agreement in resolving the issue in the IRS examination stage, you still have a right to take your case to Appeals. As mentioned above however, it may currently be in your best interest to work with the IRS agent and not depend on the case to go your way in Appeals.

Key Takeaways

If you cannot come to an agreement in resolving the issue in the IRS examination stage, you still have a right to take your case to Appeals.
The restructuring of IRS Appeals paired with budget cuts have undercut the traditional functionality of the Appeals Division.
There are two ways for a case to go forward from the examination stage to appeals — pre-assessment or post-assessment. As mentioned previously, there is no interest that accrues on the FBAR penalty until the penalty is assessed.

FBAR Penalties: What Happens If You Don’t File International Taxes

April 23, 2026October 15, 2020 by Brotman Law

An area of difficulty that has arisen with regard to FBAR cases is the ambiguity of penalties potentially faced by an individual in violation of disclosure requirements.

Key Takeaways

An area of difficulty that has arisen with regard to FBAR cases is the ambiguity of penalties potentially faced by an individual in violation of disclosure requirements.
Willfulness is defined as “a voluntary, intentional violation of a known legal duty.
In most cases, the total penalty amount for all years under examination will be limited to 50 percent of the highest aggregate balance of all unpaid foreign financial accounts during the years under examination.

Types of International Tax Forms

April 23, 2026October 15, 2020 by Brotman Law

There are many informational forms associated with international taxes and I am not sugar-coating this — they are complicated. To add to the angst, failure to file these forms or not file them on time can incur hefty penalties. In a later chapter, we will discuss the various compliance programs you may be eligible to participate in. I like to lay out all of the scenarios regarding penalties to my clients up front, so they know what we are potentially dealing with.

Key Takeaways

There are many informational forms associated with international taxes and I am not sugar-coating this — they are complicated. To add to the angst, failure to file these forms or not file them on time can incur hefty penalties.
To get started, we will focus first on the very basics — your Federal tax form — whichever version of Form 1040 that you are required to file.
Individuals who meet the requirements set out by the Internal Revenue Service are required to file income tax returns on a yearly basis. This requirement is completed by filing a 1040 or a 1040A.

What Is the Foreign Bank Account Reporting

April 23, 2026October 15, 2020 by Brotman Law

The acronym FBAR stands for Foreign Bank Account Report and refers to a disclosure form that must be filled out by certain taxpayers with respect to financial accounts maintained abroad. Although this is often a concern for the millions of expatriates living and working in foreign countries, FBAR applies to an even broader demographic of taxpayers.

Key Takeaways

Although the FBAR is important, there are also separate information forms that individuals with an international presence should also be aware of for Federal Income tax purposes.
If you have already received a notice, it is best to seek experienced counsel to guide you in your efforts to be forthcoming.
The full range of approaches may no longer exist once an audit is opened and the path to a resolution may become considerably more difficult.