Integrity Legal

Posts Tagged ‘IRS’

9th February 2017

In the aftermath of the new year, there have been many announcements which have had significant impacts upon those living outside the USA. It recently came to this blogger’s attention that the Internal Revenue Service (IRS) of the United States is poised to begin certifying delinquent taxes and communicating such certification to the United States Department of State. To quote the official IRS website directly:

The IRS has not yet started certifying tax debt to the State Department. Certifications to the State Department will begin in early 2017…If you have seriously delinquent tax debt, IRC § 7345 authorizes the IRS to certify that to the State Department. The [State] department generally will not issue or renew a passport to you after receiving certification from the IRS…Upon receiving certification, the State Department may revoke your passport. If the department decides to revoke it, prior to revocation, the department may limit your passport to return travel to the U.S.

As of January 1, 2016 US Federal statutes were amended to allow US passport revocation for those individuals who were delinquent in taxes under statutorily defined circumstances. Notwithstanding the fact that this law had been promulgated, it appears that until now the IRS had not put a frame work in place for notifying the State Department that an individual had tax delinquency issues. As can be seen from the IRS’s own website, that is no longer the case moving forward. For this reason it is prudent for those who may have tax delinquency issues to retain the services of a competent professional in order to rectify such issues before a situation arises where one is unable to get a passport issued, or a passport is revoked either in the USA or while traveling abroad.

Meanwhile, it appears that authorities in Thailand have adjusted the tax structure for certain taxpayers in Thailand. To quote directly from the Bangkok Post:

A revamped personal income tax structure aimed at increasing disposable incomes for taxpayers has officially come into effect…The amendment to the Tax Code, published in the Royal Gazette on Jan 27, applies to incomes received from Jan 1, 2017 to be filed in 2018…

It appears that under the restructure individuals will be able to make larger deductions for certain expenses while certain filing requirements have been changed requiring a larger number of individuals to file taxes. Those interested in these developments are strongly encouraged to read the article cited above and consult appropriate professionals in order to be apprised of the posture of a given tax situation.

Finally, The United States Embassy in Bangkok, Thailand has recently increased their official exchange rate to 37-1 (baht to dollars). This change reflects the fact that the Baht has been weakening against the US dollar in recent months and may be a signal that said currency may weaken further. The US Embassy in Thailand utilizes a set exchange rate which provides a level of certainty regarding the cost (in baht terms) of service fees for services provided by the US Embassy personnel.

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9th August 2011

It recently came to this blogger’s attention that some media outlets are noting the comparatively positive aspects of the economies which comprise the Association of Southeast Asian Nations (ASEAN). In order to provide further insight to the reader it is necessary to quote directly from the official website of The Wall Street Journal, WSJ.com:

JAKARTA—Investors and companies should look to Southeast Asia as they seek shelter from the world-wide markets meltdown, said the secretary general of the 10-member Association of Southeast Asian Nations. Surin Pitsuwan noted that Southeast Asia is growing, it is nestled between India and China and it dealt with its own scary debt problems over a decade ago, making it an attractive alternative amid the global volatility triggered by concerns about how the U.S. and Europe will deal with their debt, as well as whether the U.S. economy will slide into recession again. “If they are looking for a safer haven, this is it,” he told The Wall Street Journal in an interview. “The Chinese and the Japanese that are worried will want to look around for better prospects for their investments and this is one of the hopeful regions…”

The administration of this web log strongly encourages readers to click upon the hyperlinks noted above to read this well written article by Eric Bellman in detail.

Frequent readers may recall that the ASEAN region as a whole, and the component jurisdictions therein, have shown tremendous economic strength in recent months. Meanwhile, these jurisdictions are believed by some to have substantial economic potential in the future. There has been some discussion in recent weeks regarding the prospect of a possible ASEAN visa not unlike the Schengen system currently employed in Europe. Whether such a program will ultimately be implemented remains to be seen. In any case, there is certainly strong evidence to support the inference that the ASEAN jurisdictions will be increasingly important in a geopolitical and economic context moving forward.

In news pertaining to the continuing struggle for LGBT Equality in the United States, it recently came to this blogger’s attention that the Internal Revenue Service (IRS) of the United States appears to be refusing recognition of same sex marriages, even those legalized and/or solemnized in an American State jurisdiction. To provide further information this blogger is compelled to quote directly from the official website of MSNBC at MSN.com:

For all those same-sex newlyweds in New York, Lawrence S. Jacobs has a message: Enjoy the Champagne and the honeymoon, but expect no gifts from the IRS. Jacobs, a lawyer in Washington, specializes in estate planning for same-sex couples — and in delivering the bad news that their unions aren’t legal in the eyes of the IRS, a policy that will cost them time and money during tax season.Same-sex couples in Washington, which last year legalized gay marriage, must fill out a federal return to make calculations required for their D.C. joint return. But then they must set that work aside and fill out separate federal returns because the IRS doesn’t regard their union as legal, Jacobs says. “You just spent decades getting your marriage recognized, and now the feds say, ‘No, you’re not,’” says Jacobs, who as a partner in a same-sex marriage has firsthand experience of the problem.

The administration of this web log strongly encourages interested readers to click upon the hyperlinks noted above to view this story in detail.

Frequent readers may recall that the issue of same sex marriage has been a “hot button” issue in recent months as Senate Judiciary hearings have recently been held to scrutinize the Constitutionality of the so-called “Defense of Marriage Act” (DOMA) in light of proposed replacement legislation in the form of the bill colloquially referred to as the Respect for Marriage Act (RFMA). In an immigration context, the issue of federal recognition of same sex marriage is of substantial importance since agencies such as the United States Citizenship and Immigration Service (USCIS) and each and every US Embassy or US Consulate overseas is legally compelled to disregard a same sex marriage when adjudicating family visa matters pursuant to the provisions of DOMA. Therefore, bi-national same sex couples cannot obtain a travel document such as a K-1 visa, CR-1 visa, or IR-1 visa in the same manner as their different-sex counterparts. Meanwhile, there is some hope that this current legal discrimination will be overcome as some US Courts have ruled that DOMA’s non-recognition, at least at the federal level, of State licensed same sex marriage is Un-Constitutional. Concurrently, the United States Bankruptcy Courts have begun allowing joint bankruptcies for same sex married couples.

It remains to be seen whether same sex couples will ever be accorded the same benefits as their different-sex counterparts in the eyes of American law, but the overall situation appears to be gradually improving.

For related information please see: Americans Resident Abroad.

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19th July 2011

It recently came to this blogger’s attention that the naval chiefs of the nations which comprise the Association of Southeast Asian Nations are set to meet in Hanoi, Vietnam in upcoming days. To provide further insight it is necessary to quote directly from the official website of China Daily, ChinaDaily.com.cn:

HANOI – The 5th ASEAN Naval Chiefs’ Meeting (ANCM-5) will be held in Vietnam on July 26-29, with participation of naval commanders from nine ASEAN member countries and the Lao defense attache in Vietnam. According to Vietnam News Agency on Tuesday, it is the first time Vietnam hosts such defense cooperation event, during which delegates will share views and discuss cooperative measures to respond to security challenges in the region, among other issues…

This blogger asks readers to click upon the hyperlinks noted above to learn more from this insightful article.

This news comes upon the heels of news that the American President is scheduled to attend an upcoming ASEAN meeting. Meanwhile, ASEAN leaders are apparently in continued discussion regarding a communique pertaining to the South China Sea. Finally, it would appear as though there may be further discussion regarding an ASEAN visa which would operate in a similar manner to the Schengen Visa. How all of these developments will ultimately play out remains to be seen, but they are certainly of interest for those in the region.

In news related to the struggle for LGBT Equality this blogger recently came upon an interesting posting discussing the current legal position of the LGBT community in light of continued enforcement of the so-called “Defense of Marriage Act” (DOMA). To quote directly from a posting by Peter J Reilly on the official website of Forbes, Forbes.com:

One of my earliest and most popular (pre-Forbes) posts was on the case of Rhiannon G. O’Donnabhain, who wanted to deduct the cost of gender reassignment surgery as a medical expense.  The IRS argued that the procedure was “cosmetic surgery” and not deductible.  Ms. O’Donnabhain prevailed.  Then came Gill V OPM.  As I noted in my inaugural Forbes post, marital status impact over 1,000 “benefits, rights and privileges” in the United States Code.  Section 3 of the Defense of Marriage Act (DOMA) holds that a couple is not married for any federal purpose unless they are of the opposite gender and that the word spouse means a person of the opposite gender.  In Gill v OPM a district court ruled that Section 3 of DOMA had no rational basis.  There were several plaintiffs in Gill, all legally married in Massachusetts, arguing for a variety of benefits including that of filing a joint return…

Those interested in such issues are strongly encouraged to click upon the relevant hyperlinks above to read this interesting posting in detail.

Section 3 of DOMA also has significant ramifications in an American immigration context as even those who have entered into a same sex marriage in a State which legalizes such unions cannot use said marriage as a basis to petition for spouse visa benefits (such as the CR-1 visa and the IR-1 visa). Concurrently, as such unions are not recognized by the United States federal government a petition for a same sex K-1 visa would also not be permissible so long as DOMA remains in place.  Bearing that in mind the reader should note that legislators such as Representative Jerrold Nadler and Representative Mike Honda have introduced legislation such as the Respect for Marriage Act, the Uniting American Families Act (UAFA), and the Reuniting Families Act in order to provide some sort of remedy for the current discrimination being borne by same sex bi-national couples and the LGBT community as whole. As of the time of this writing none of the above legislation has seen passage although with an upcoming Senate Judiciary Committee hearing set to discuss DOMA there is hope that this discrimination will not continue indefinitely.

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5th February 2011

One of the Founding Fathers of the United States, and a true Renaissance man, Benjamin Franklin was once quoted as stating, “In this world nothing can be said to be certain, except death and taxes.” Truer words may never have been uttered as taxation and death seem as ubiquitous now as they likely did in the 1700′s. With that in mind, this blogger has recently noticed a great many American people outside of the USA who have misconceptions regarding the current state of American law with regard to taxation of Americans resident abroad. It would appear that there are those under the mistaken impression that individuals outside of the United States are not subject to American income tax. In fact, nothing could be further from the truth pursuant to current United States tax rules.

To quote directly from the official website of the Internal Revenue Service: IRS.gov:

If you are a U.S. citizen or resident alien, the rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same whether you are in the United States or abroad. Your worldwide income is subject to U.S. income tax, regardless of where you reside.

As can be seen from the above quotation, Americans working or earning income abroad are still subject to American taxation regardless of the fact that they are physically located outside of the jurisdictional confines of the United States of America. There are many who do not agree with the current tax policies regarding individuals resident abroad, but as the law currently stands Americans must pay taxes even on income earned outside of the USA. That said, from a practical perspective there are some benefits accorded to Americans residents abroad. To quote further from the same page of the Internal Revenue Service website:

If you reside overseas, or are in the military on duty outside the U.S., you are allowed an automatic 2-month extension to file your return until June 15. However, any tax due must be paid by the original return due date (April 15) to avoid interest charges.

Of further note to Americans resident abroad is the foreign earned income exclusion which may allow Americans resident abroad to obtain a exemption from paying taxes on earned income up to a certain specified level. To quote directly from the Internal Revenue Service’s web page regarding the Foreign Earned Income Exclusion:

If you are a U.S. citizen or a resident alien of the United States and you live abroad, you are taxed on your worldwide income. However, you may qualify to exclude from income up to an amount of your foreign earnings that is now adjusted for inflation ($91,400 for 2009, $91,500 for 2010, $92,900 for 2011). In addition, you can exclude or deduct certain foreign housing amounts.

It should be noted that “living abroad” should not be construed to mean short term periods of residence outside of the USA. In fact, one wishing to claim the aforementioned exclusion would likely be required to spend a substantial period of time outside of the USA. In fact, the IRS currently uses a Physical Presence Test in order to determine whether or not an American who has been abroad qualifies for the foreign earned income exclusion. To quote further from another page of the IRS.gov website:

You meet the physical presence test if you are physically present in a foreign country or countries 330 full days during a period of 12 consecutive months. The 330 qualifying days do not have to be consecutive. The physical presence test applies to both U.S. citizens and resident aliens.

This posting is merely intended to act as a primer for those interested in American tax issues and how United States tax rules impact Americans resident abroad. This posting should not be viewed as a complete or comprehensive analysis of an individual’s current tax situation. Those interested in obtaining advice regarding American tax matters are well advised to contact a licensed professional. At the time of this writing the Integrity Legal Network includes an American attorney licensed to practice law before the United States Tax Court.

For related information please see: Expat Tax Return.

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