The USA imposes a framework of worldwide taxation on its residents and citizens. In most cases U.S. citizens and Green Card holders have an obligation to file U.S. tax returns regardless of where they live in the world. There are exemptions for individuals with low income depending on the circumstances and filing status.
Are you a U.S. citizen?
Since the introduction of the Foreign Account Tax Compliance Act (FATCA) rules, it has become increasingly difficult for U.S. citizens to be non-compliant with their tax returns.
Many individuals do not realise that they either are a U.S. citizen or have a U.S. tax filing requirement. There are different ways that you can automatically acquire U.S. citizenship, for example being physically born in the USA or having parents with U.S. citizenship. Some cases are more complex where parents naturalise as U.S. citizens when they have minor children. If you are unsure of your status we can assess your situation.
What is FATCA?
FATCA or the Foreign Account Tax Compliance Act is legislation enacted by the USA which aims to prevent U.S. taxpayers from avoiding payment of U.S. tax on non-U.S. assets or investments.
Under this legislation, financial institutions across the world are being required to identify their clients who are U.S. citizens and require them to certify their status. Failure to comply could result in U.S. withholding taxes being applied to certain types of income.
This vast reaching legislation is prompting many individuals who may not be compliant with their U.S. taxes or may not be aware of their filing obligations to bring their affairs up to date.
Need to get up to date with your U.S. compliance?
There can be significant penalties for failing to be compliant with your U.S. taxes.
The IRS does, however, currently offer a streamlined filing procedure for individuals who were non-wilful in their failure to file U.S. tax returns and in many cases this is completed penalty free. Once filed and accepted, your affairs will be considered up to date.
This procedure involves filing U.S. tax returns for the previous 3 tax years and Foreign Bank Reports for the last 6 tax years:
We provide advice and compliance services for U.S. Tax Returns to cover:
• Preparation and submission of Federal and State Tax Returns
• Foreign Bank Account Reports (FinCEN 114) and Foreign Asset Reporting
• Foreign reporting for ownership of non-U.S. corporations or partnership interests
• Filing under the IRS streamlined procedure
• Advice regarding Double Taxation Relief
For more information or any enquiries please contact us at USTax@burgesshodgson.co.uk