edparsonscpa

Ignorance of the law should be considered a lesser offense

July 11, 2012 1 Comment

Why isn’t the IRS isn’t more understanding of the complex regulations they have set forth for Americans living and/or investing abroad and why isn’t there better information provided to understand compliance and reporting requirements? Expats are in a sense forced to fall out of compliance, as the time requirement to educate themselves and keep up with the changing regulations is too much of a burden, and often too complex to understand even if you have the time needed to attempt self study

What is a PFIC ?!

January 24, 2012 No Comments

What is a PFIC ?! It is one of the tools the US Government uses to discourage funds leaving the US economy. Read this article for a full explanation

IRS Not happy about $450 Million in lost Revenue

August 12, 2011 1 Comment

A recent study conducted by the Treasury Inspector General for Tax Administration (TIGTA) indicates that a large number of taxpayers living abroad are calculating incorrectly one of the most important elements of their tax return: The foreign earned income exclusion.

Living abroad and have not filed US Tax returns in several years?

February 3, 2011 No Comments

What to do if you have not filed a US tax return in several years and live abroad.

Residence definition issues – for tax treaty purposes

January 6, 2011 No Comments

Tax treaties give residents of the contracting countries the security that they will not experience double taxation. Unfortunately in some cases, an individual may be in a situation where it is unclear which country he is a resident of – and hence which country will tax him. In these cases, Article 4(2) of the U.S. Model Treaty provides the following tie-breaker rules for individuals:

What is the foreign tax credit, Form 1116?

January 4, 2011 1 Comment

The US reduces your income tax liability dollar for dollar for any taxes paid to a foreign government. This comes in especially handy when your wages exceed the foreign earned income exclusion, but there are several points to keep in mind, as the “dollar for dollar” part of the definition can’t unfortunately be taken verbatim. It was intended to avoid double taxation of US taxpayers.