Artio Partners Provides an Overview of a New IRS Program for Delinquent American Expatriates
Effective September 1, 2012 American expatriates living abroad who failed to timely file a federal tax return or FBARs (Reports of Foreign Bank and Financial Accounts) have an opportunity to become compliant with the US tax law.
What are the advantages of this program?
▶ Clear and streamlined process. A low-risk taxpayer has to file only 3 years of expatriate tax returns and 6 years of FBARs to become compliant.
▶ No late filing penalties or fines. Expatriates will not pay any late filing penalties or fines if they are eligible to participate in this streamlined program.
▶ Foreign pension deferral relief. This program provides a retroactive relief for American expatriates with certain foreign pensions who failed to timely elect income deferral per a relevant tax treaty.
Who is eligible to participate in this program?
This IRS program was specifically introduced to help US expatriates living abroad and dual citizens with a low compliance risk. Each overseas tax return submitted under this program will be reviewed by the IRS to determine a risk level of each taxpayer. IRS will evaluate the risk level based upon the tax return information, presence of any high risk factors and the amount of tax due.
Low-risk taxpayers are eligible to participate in this program. Taxpayers without high risk factors and a tax due less than $1,500 in each of the years are considered “low risk” and will be processed in a streamlined way.
High-risk taxpayers with more complex tax returns and higher tax due undergo a more detailed review and might be required to file more than three years of tax returns.
Which factors are considered to evaluate a risk of taxpayer?
Some of the factors that might increase a risk level are the following:
♦ The taxpayer is under investigation by IRS
♦ The taxpayer received the FBAR warning letter
♦ Refund is due after filing a return
♦ The taxpayer has not fully declared all income
♦ Substantial material activity in the USA
♦ Complex tax planning that might suggest tax avoidance
Should you hire a CPA to help with this process?
IRS will carefully review every expatriate tax return submitted under this program. If you decide to proceed with an expatriate tax professional, make sure to choose a CPA who provides international tax services and specializes in US expat tax planning and preparation for Americans living abroad.
International tax experts at Artio Partners will help you participate in this program and become compliant. Our transparent flat fees start from $260. To learn more about our services, please visit http://www.artiopartners.com/
About Artio Partners
Artio Partners works with American expatriates living abroad and dual citizens from over 75 countries.
We specialize in US expatriate tax preparation, past due expat tax returns and complex international tax issues like FBAR, FATCA, foreign tax credit, foreign real estate, PFIC, foreign adoption and controlled foreign corporations. For more information please visit http://www.artiopartners.com/