Tokyo and Hong Kong have the highest allowable housing costs for 2013 for purposes of the foreign housing exclusion under Sec. 911(c). The limitation for Tokyo is $320.82 per day, or $117,100 for the entire year. For Hong Kong, it is $313.15 a day, or $114,300 for the year. The
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TOPICS / TAX
International tax
FATCA final regulations cover all the bases
The IRS issued final regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities (T.D. 9610). Under the Foreign Account Tax Compliance Act of 2009 (FATCA), enacted as part of the Hiring Incentives to Restore Employment Act of
Flight attendant cannot claim foreign earned income exclusion for wages earned in international airspace and U.S.
On Wednesday, the Tax Court held that a flight attendant who was a resident of Hong Kong and a U.S. citizen could not claim 100% of her wages were excludable under the Sec. 911 foreign earned income exclusion (Rogers, T.C. Memo. 2013-77). The court also upheld an accuracy-related penalty under
The basic framework of cross-border taxation
U.S. citizens are taxable on their worldwide income, with a credit or deduction for taxes paid on foreign income. The United States makes no distinction between earnings from business or investment activities within the United States and those outside its borders. Tax laws governing cross-border transactions are both arcane and
U.S. and Switzerland sign FATCA agreement
The Treasury Department announced on Thursday that the United States and Switzerland have signed a bilateral agreement to implement provisions of the Foreign Account Tax Compliance Act (FATCA). FATCA was enacted by Congress in 2010 as part of the Hiring Incentives to Restore Employment Act of 2010, P.L. 111-147. It
Sec. 6038D reporting of specified foreign financial assets postponed for one year
The IRS on Wednesday announced that it is postponing for at least one year the requirement that domestic entities report interests in specified foreign financial assets. In Notice 2013-10, the IRS says that when it issues final regulations, they will apply no earlier than to tax years beginning after Dec.
FATCA final regulations cover all the bases
On Thursday, the IRS issued final regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities (T.D. 9610). Under the Foreign Account Tax Compliance Act of 2009 (FATCA), enacted as part of the Hiring Incentives to Restore Employment
FATCA: A new era of financial transparency
Since 2008, the U.S. government has been aggressively moving against U.S. taxpayers who have undeclared foreign accounts. Through a variety of mechanisms, the government has obtained information about U.S. account holders and their assets from jurisdictions previously thought nearly impenetrable. These recent developments portend the eventual erosion of traditional concepts of
FATCA prop. regs. amended to extend various deadlines
The IRS is delaying various FATCA-related deadlines because it has received feedback that complying with the original deadlines and other requirements is proving to be impractical for some taxpayers (Announcement 2012-42). The announced changes modify the 388-page proposed regulations issued in February related to the Foreign Account Tax Compliance Act
Taxpayers residing outside U.S. questioned at U.S. border regarding back taxes
Taxpayers traveling to the United States with unpaid U.S. tax assessments can be detained at the border, questioned, and flagged for follow-up enforcement. If a taxpayer has an unpaid tax liability and is subject to a resulting Notice of Federal Tax Lien, the IRS may submit identifying taxpayer information to
Treasury releases model intergovernmental agreement for FATCA
The Treasury Department on Thursday released a model intergovernmental agreement designed to implement the information-reporting and withholding-tax provisions in the Foreign Account Tax Compliance Act (FATCA), which was enacted by Congress in 2010 to require foreign financial institutions (FFIs) to report to the IRS information about financial accounts held by
IRS releases new FAQs for Offshore Voluntary Disclosure Program, announces other rules
The IRS said Tuesday that it has collected more than $5 billion in its offshore voluntary disclosure programs (IR-2012-64), the third of which was announced in January this year. At the same time, it also released 55 questions and answers updated for the 2012 program. On Jan. 9, the IRS
IRS issues regulations on “expatriated entities” under Sec. 7874
On Thursday, the IRS issued temporary regulations governing whether a foreign corporation has “substantial business activities” in the foreign country in which, or under the law of which, the corporation is created or organized, compared to the total business activities of the expanded affiliated group (T.D. 9592). At the same
FTC “splitter” rules issued
The IRS issued final regulations on determining who has the legal liability to pay the foreign tax for foreign tax credit (FTC) purposes (T.D. 9576) and temporary regulations on the application of the “anti-splitter” rules of Sec. 909 (T.D. 9577). The rules are related because the legal liability to pay
Rules for reporting interest on deposits paid to foreign taxpayers are finalized
The IRS issued final regulations under Sec. 6049 outlining the rules requiring U.S. financial institutions to report interest payments to certain nonresident alien individuals of $10 or more per year paid after Dec. 31, 2012 (T.D. 9584). The IRS explained that the new rules are part of the process of
FBAR and Foreign Financial Reporting Resources
TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), must be filed by U.S. persons having a financial interest in or signature authority or other authority over any financial account in a foreign country if the aggregate value of these accounts exceeds $10,000 at any time during the
FinCEN postpones mandatory FBAR e-filing
The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced that it is postponing until July 1, 2013, its requirement that Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), be filed electronically. FinCEN notes that the delay in the e-filing requirement does not relieve anyone of the
FinCEN once again extends FBAR filing deadline for certain financial professionals
The Financial Crimes Enforcement Network (FinCEN) announced a further extension of the deadline for filing Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to June 30, 2013, for a small group of financial professionals (FinCEN Notice 2012-1). In 2011, FinCEN announced that three small groups of
Foreign tax credit regs. on splitter arrangements and determining who is liable for foreign tax
Late Thursday, the IRS issued final regulations on determining who has the legal liability to pay the foreign tax for foreign tax credit purposes (T.D. 9576) and temporary regulations on the application of the “anti-splitter” rules of Sec. 909 (T.D. 9577). The rules are related because the legal liability to
Proposed FATCA regs. take comprehensive approach to foreign financial institution reporting
The IRS on Wednesday issued proposed regulations providing rules on information reporting by foreign financial institutions (FFIs) and withholding on certain payments to FFIs and other foreign entities (REG-121647-10). Under the Foreign Account Tax Compliance Act of 2009 (FATCA), part of the Hiring Incentives to Restore Employment (HIRE) Act of
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