IRS Audits and “Red Flags”

As tax attorneys, one of the most common questions we are asked is if someone will get audited.  While this is an impossible question to answer, there are certain “red flags” that make an audit more likely.  Some of these are situations you want to avoid because it also means your return may be incorrect.  […]

California Residency; Are you here or not?

Similar to the IRS, California residents are taxed on their worldwide income, regardless of the source. However, California non-residents are only taxed on their California source income (which can be a tricky calculation). Part-year residents are taxed on all income earned while being a resident in California and all income sourced in California.  With these […]

IRS Audits – Don’t Ignore; Hire an Attorney

IRS audits can be stressful and overwhelming. Tax returns are selected for audit either randomly or for a reason.  The reason could be a related audit, such as a business partner or associated business being audited, or one of the dreaded “red flags.”  The important thing to remember is not to ignore an audit notice […]

GILTI: Eliminating Tax Holidays and use of NOLs

GILTI (Global Intangible Low-Taxed Income) went into effect in 2018.  The purpose of GILTI was to not allow tax deferral on offshore intangible earnings.  However, as we have detailed many times, a formula that seeks to tax intangible income that does not have intangible income in the calculation causes many problems.  Recently, we have had […]

IRS Increases FBAR Penalty

The FBAR is one of the most common forms in international tax, and one with the most notorious penalties.  These penalties are adjusted yearly for inflation.  The maximum civil penalty that can be assessed for failure to file an FBAR (Report of Foreign Bank and Financial Accounts), FinCen Form 114, has increased from to $12,921 […]

THE TIME IS NOW: TAX AMNESTY OPTIONS, GILTI AND THE TRANSITION TAX

Even after the closing of the Offshore Voluntary Disclosure Program (OVDP) there are very attractive options for taxpayers to become compliant with their taxes and international reporting.  In some cases, without even having a penalty.  Additionally, there are two new laws for foreign corporations that need to be addressed. Full Article Here:  THE TIME IS […]

Foreign Earned Income Exclusion – Housing Costs

The foreign earned income exclusion allows for Americans living and working abroad to exclude earned income, up to $107,600/person for 2020.  To be eligible for the exclusion, taxpayers must have their main abode outside the U.S. and meet either the bona fide residence test or the physical presence test.  In addition to excluding earned income, […]

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