The Law Offices of O'Connor & Lyon is
a full service law firm specializing in
domestic and international tax matters.
Phone: (203) 290-1672
The Global Economy Has Created Countless Tax Issues as the U.S. Taxes Worldwide Income Based on Citizenship, Residency, and Physical presence. If You Find Yourself in Non-Compliance, There Is a Path Back to Tax Compliance That Can Avoid the Devastating Consequences of an IRS Independent Audit
Streamlined Foreign and Streamlined Domestic Offshore Procedures (SFOP & SDOP)
These are disclosure programs for individuals who are ‘non-willful’. If you didn’t deliberately fail to file or deliberately incorrectly file items of your tax filings, there is a good chance that you will be eligible for this program. These programs require at least three years of correct tax returns, six years of FBARs, and a non-willful certification that covers the entire disclosure.
Delinquent International Informational Return Submission Procedures (DIIRSP)
DIIRSP submissions are used when high penalty forms (like 5471, 3520, 8938 etc) haven’t been filed and the filer believes he has ‘reasonable cause’ for that failure. Reasonable cause is a technical term in relation to your tax filings and it is a significantly higher bar to clear than ‘nonwillful’. DIIRSP submissions require a reasonable cause letter for every international information form for every year that those forms are being added or corrected. The number of years you should correct with this type of disclosure is not as clear cut as the SDOP and SFOP disclosures, and will, in part, be based on how risk averse you are.
Delinquent FBAR Submission Procedures (FBAR ONly Submissions)
These disclosures are for individuals that don’t have any tax noncompliance (no unreported income and no unfiled or incorrectly filed international informational returns) associated with their returns. These individuals only need to file or correct their FBARs.
IRS Criminal Investigation Voluntary Disclosure Practice (the successor to the OVDP program)
This program is for individuals who are concerned that their tax non-compliance creates criminal exposure. This is not a program to be entered into lightly and the applicable penalties with this type of disclosure are substantial, but sometimes, when an individual has deliberately or fraudulently avoided their tax obligations, it is the only option available.
International Tax Planning
Immigrate, Expatriate, and Invest Wisely.
Planning to become a U.S. Person?
If you are planning to immigrate or become a U.S. person for tax purposes, there are a number of very important considerations and actions that you should consider first to avoid enormous tax and compliance costs. Whether you plan to be here for a year, a decade, or a lifetime, we can advise you on these concerns and help you develop a plan that won’t sacrifice a significant percentage of your net worth to U.S. taxes.
Planning to leave the U.s. / Expatriate?
For tax purposes, expatriation can be exceedingly complicated. Abandoning your Green Card or renouncing your U.S. citizenship does not terminate your filing obligations with the U.S. and that abandonment and that renunciation can lead to dramatic tax consequences and potentially to a deemed sale of your worldwide assets. It is imperative that you adequately prepare for the tax impact of the renunciation decision. Failure to file Form 8854 results in penalties, but it also results in continued filing obligations. If you have already renounced your citizenship, it is never too soon to resolve your expatriation for tax purposes, and if you are considering expatriation, you should strongly consider reaching out to knowledgeable tax professionals to learn the potential pit-falls surrounding that decision.
International BusinessEs
Are you considering opening a business in a foreign country or opening a branch of your current business in a foreign country? These are decisions that can and will have a dramatic impact on the compliance costs associated with your annual U.S. tax filings, but these are also decisions that will prevent you from accumulating any profits within your foreign entity without imposition of U.S. tax on those earnings annually. There are planning opportunities associated with extending your business activities into foreign countries, but it is of the utmost importance that you understand what your options are and what the tax consequences of those decisions and options are. If you are unfamiliar with GILTI, Subpart F, the 962 election, and the appropriate informational reporting form based on your foreign entity type (Form 5471, Form 8858, Form 8865) you should invest in developing your understanding and engaging in the appropriate tax planning.
Understand your investments
The reporting obligations and the associated amount of tax often should have a significant impact on investment decisions, especially in the international context. That investment advisor and that bank employee didn’t know AND didn’t care what the tax consequences of their advice would be. Develop an understanding in advance of making investments to adequately determine the cost/benefit of those investments and develop an understanding of the investments you already have to understand the potential impact of maintaining them.