Private Client Services Update – Foreign Asset Disclosure, Financial Reporting and Tax Planning in a Complex World

    By Alison V. Lennarz, Business Taxation, Estate, Trust & Wealth Transfer

    Globalization, and the interwoven economies of countries around the world that result from it, is only gaining momentum. Increasingly sophisticated communications and transportation technologies and services, mass migration and the movement of peoples, a level of economic activity that has outgrown national markets through industrial combinations and commercial groupings that cross national frontiers offer countries and their citizens opportunities to make huge profits. Governments struggle to keep up with the pace of change in an environment complicated by widely differing expectations, standards of living, cultures and values, and legal systems.

    In the United States, one consequence seems to be expanding reporting and disclosure requirements for U.S. citizens and residents with interests abroad. As U.S. officials strive to develop tools to detect lawbreakers and wrongdoers, the burdens on law-abiding citizens and residents are growing. Attorneys at Kaufman & Canoles can alleviate these burdens by identifying clients’ reporting and disclosure obligations and providing the necessary information on the appropriate forms and reports.  Specifically, we have counseled and assisted clients with respect to:

    • Reporting foreign bank and brokerage accounts on FBARs (FinCEN Report 114) and “foreign financial assets” on IRS Form 8938.
    • Undertaking voluntary disclosure of foreign accounts under the variety of programs now available to U.S. citizens and residents.
    • Reporting transportation of currency and monetary instruments from the United States on FinCEN Form 105.
    • Withholding tax from payments to foreign recipients under FATCA and preparing IRS Forms W-8BEN, W-8BEN-E, and W-8ECI.
    • Reporting gifts, inheritances, and distributions from foreign estates and offshore trusts on Form 3520 (and reporting accumulation distributions on IRS Form 4970).

    We also have successfully represented taxpayers in controversies with the U.S. government arising from taxpayers’ failure to properly report foreign accounts, foreign income, and other assets, and taxpayers’ failure to pay tax on income and distributions.

    U.S. citizens with foreign accounts and other assets, non-U.S. citizen spouses or family members outside the United States have particular estate planning and estate administration needs and concerns. Kaufman and Canoles attorneys have the knowledge and experience to counsel these individuals and their families.

    Our clients include faculty from area colleges and universities, adult relatives of immigrant families and families residing outside the U.S., and individuals doing business with foreign companies and investing in non-profit organizations based outside the U.S. Kaufman & Canoles is ready and able to work with you and assist your clients, too. – Alison Lennarz

    The contents of this publication are intended for general information only and should not be construed as legal advice or a legal opinion on specific facts and circumstances. Copyright 2024.