Tag Archives: brian dooley

Provocative International Tax News

offshore tax planning, offshore tax strategies, controlled foreign corporation,

Tax Planning Small Business Are Taxed at 14%

Government Report Shames Businesses Paying More than 14% in Taxes.    Difficult to believe that Senator Bernie Sanders  (who paid tax at 13%) released the report.  It states that business that plan their taxes are taxed at 14%. Here’s what’s going on.   

Small Business Tax Planning. Try very hard to pay the least in taxes

Small Business Tax Planning. President Trump states that he try very hard to pay the least in taxes

Meanwhile, after the defeat of the Health Care Reform,  the Trump Tax Reform is looking at an August vote.   Keep up to date on this link.    As in the case of President Trump,  we all have to work hard to pay the least in taxes.   Tax savings is not as simple as a year-end call to your CPA.    On this link, you will learn how to get your tax rate down to 14%.

International tax planning for the Contract Manufactuere

International tax planning for the Contract Manufacturer

Amazing tax savings for importers of contracted manufacturer of their products.  This new IRS law gives tax savings to small businesses.  Learn more on this link and send it to your CPA.
For additional small business tax savings get my book International Taxation in America for the Entrepreneur on sale for $9.50 on this link.

 

Small businesses are now reaping big tax savings.  Importers, exporters, and e-commerce business can use the same loopholes as big business. I wrote my book to teach you these tried and true strategies in an easy two-hour read.

International tax planning

Buy at Amazon for only $9.50.

But, I did more.  I had an audiobook created.  It downloads onto your smartphone so that you can listen while you are commuting.   Get the 2017 edition of  International Taxation in America for the Entrepreneur for $9.50 at Amazon on this link.

 

saving taxes, how to save taxes, tax planning,

Saving taxes with an IRS approved tax plan is called a private letter ruling.

International Gift Tax Plans with this IRS internal letter on this link. Fantastic legal tax avoidance for the foreign person with family in the U.S. is explained in this letter.

  • Avoiding state income taxes this new IRS  designer  Nevada trust.  IRS tells how to use your Nevada corporation as your trustee to legally stop paying state taxes on your investment income. Here’s what’s happeningon this link.

New- Saving international taxes with this letter from the U.S. Department of the Treasury letter to the U.K. tax authorities on tax planning in the U.S. for UK and EU companies.

Tax planning, with the Supreme Court common tax laws

Tax planning with Supreme Court common tax laws

18th Century Supreme Court case destroys IRS tax penalty law. Using this case, the Tax Court gave the IRS a big defeat.  Here is what happen.   The Supreme Court is the “Law of the Land.”  It rules over the IRS and Congress.   

It works both ways.  The blog on this link explains the most missed Supreme Court Doctrine use by the IRS to blow up this offshore plan.

international tax planning, international, tax, planning,

International tax planning and international tax savings with this Treasury Department report. 

The secret report on tax savings international tax plans that the IRS cannot stop was issued by the U.S. Department of the Treasury (a branch of the White House).

They reported the successful foreign tax plans of international businesses. We have obtained a copy.  It is on this link.   Here you will learn the legitimate foreign tax plans that Congress likes. 

offshore trust, foreign trust, nevada trust, estate planning trust, esbt,    Since the Middle Ages, the wealthy have capitalized on trusts to avoid paying taxes. During the Great Crusades, upon the death of a knight, his entire estate went to the king.    Nine hundred years later, things have not changed much except the ‘King” takes only half.

Trust are the most efficient tax tool. International tax planning should start with a Nevada trust to own the foreign company.  Learn trust tax planning and asset protection on this easy to read blog post.    It has the blueprint for successful trust tax planning.   IRS memo on asset protection and tax planning with an offshore trust.  Get it now on this blog post.

internet tax planning, saving taxes, cloud tax planning

Saving taxes with the cloud-based

Cloud tax planning. Learn how businesses are using the cloud to save taxes on this link.  E-commerce companies are avoiding state income taxes and in some cases deferring U.S. taxes.

Be an IRS tax wizard with our new custom Google search, on this link.  This custom Google app to read 400,000 pages deep inside the IRS’s website and the tax court’s website.

Foreign Investors Learn Why a Corporation and Family Limited Partnership is U.S. Death Tax Trap

The problem for the non-resident alien is that their estate tax exemption is $60,000 and not $5.3 million (as it is for Americans).   And there is one more problem… the U.S. estate tax planner.  While the U.S. has a tax on the estate, other countries tax the recipient.  This tax is called an “inheritance tax.”

Thus the  American tax planner also must know “international inheritance tax planning” for the foreign country of the investor.

They advise the nonresident alien (the term for estate and gift taxes is “nondomiciled“) to own their U.S. investments and U.S. real estate through a foreign corporation (such as a Panamanian company or a British Virgin Island company).  

Since the 1950’s, this tax plan has failed.  The U.S. courts have ruled for the IRS (more on these cases on this link).  These court cases focused on the power to revoke (section 2038) and the right to the corporate dividends (section 2036).  These tax laws  required the assets owned by the foreign entity to be included in the deceased’s U.S. taxable estate

The best estate tax planning method for the foreign investor involves a trust.   Here is a link on the basics.  In Europe and the United Kingdom are subject to an inheritance tax.  Estate taxes and inheritance differ.  This difference challenges international inheritance tax planners. 
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Protecting Yourself from the New IRS Big Brother SuperComputer & Its “Artificial Intelligence”

big brother, IRS spying, IRS audit,

IRS spying includes license plate recognition. Stores, tolls, hotels and any other place that has a surveillance camera has been added to IRS Big Data Supercomputer.
Learn how to protect yourself with this episode of Tax Talk.

The Internal Revenue Service is using and storing license-plate recognition on its new Supercomputer and cell phone tracking (a new stealth program called “Stingray”).

The website of “TLOxp” is on the left.  I just had a demonstration and it is really Big Brother.  Tolls and parking lots (with a camera) feed pictures of your license plate  into this computer. 

The Government uses Stingray  to trick your cell phone to ping off a device other than a cellphone tower.  This technology can record numbers for a phone’s incoming and outgoing calls.

Then, the IRS supercomputer can cross-reference this information with your cell phone records, your Facebook postings and Instagram’s.

Bloomberg News reported that the IRS and other government agencies have been collecting this data since 2012, when the IRS installed its Supercomputer.

The IRS Robot is farming EBay, LinkedIn, and Facebook, Yelp and all social media. It saves your Internet searches.  In  some cases, the robot saves your emails.  

 It has access to every social media posting going back to 2008.  Deleting your posts does not make them go away. They are stored up to six years on this Big Data Supercomputer (six years is the maximum period for a tax audit).

 The IRS has bragged that their computer can make DNA blueprint of each of our behavior.

The IRS  Supercomputer reads all 200 million e-Filed returns in just ten hours.   

Learn how to protect yourself and how to “game” the IRS robot auditor with this episode of Tax Talk. 

Getting the Best of Both Worlds – International Tax Planning for S Corporations and their Alien Shareholders

Dual residents are citizens of nations that have a tax treaty with the U.S.  Most tax treaties have a “tie-breaker” rule that favors the country of citizenship.  

International Tax Planning for S Corporations and their Alien Shareholders – Getting the Best of two tax Worlds

Okay, here is the general rule. A general rule is that dual resident residents are treated as U.S. residents for purposes.  This link provides an IRS legal memorandum on the topic of the dual resident process.    For tax planning, the dual resident will use its home country tax treaty to elect to be a non-resident alien.  This way, he is not paying U.S. tax on his worldwide income. 

Dual residents are often shareholders of S corporation. Here the dual resident international tax planning needs to be cautious.

Until recently, the  IRS regulations provide that if a dual resident taxpayer is a shareholder in an S corporation and the alien claims a treaty benefit as a non-resident alien, the taxpayer is a non-resident alien for the S corporation’s rules.  As a result, the entity’s S corporation election will be terminated.[2]

Most tax planners will tell you that this continues to be the law.   If they do, then you know that you have the wrong international tax planner.

The dual resident alien usually wants to elect to be a non-resident alien.   The tax savings are huge.  For example, no self-employment tax, no controlled foreign corporation tax, no tax on foreign income, no passive income tax, no tax on U.S. bank income and no tax on gains on the U.S. stock market.  Yes, all of this is tax-free.

But here is the problem.  How to invest into a U.S. business.  The easiest is to invest using a domestic limited liability company.   But for the dual resident, his/her home country may not recognize the LLC for asset protection. Thus, why you are protected in the U.S., you are not protected outside the U.S.  The alternative is a corporation. A subchapter S corporation allows a single tax structure.

The IRS issued Treasury Decision 8733 provides that a  dual resident is allowed the best of both tax worlds.   First, he/she remains a non-resident alien legally avoiding the taxes mentioned above.

Next, the dual resident alien can elect to pay U.S. income tax on the S-corporation’s income as if the income was U.S. business income.  If he does, he is an allowed to be a shareholder of the corporation.

For example, the S-corporation is a retail store.  Mr. Wilson a U.K. citizen and a dual resident is a shareholder.  He has not elected to be U.S. resident.  However, he has elected to follow the IRS rules in Treasury Decision 8733.   The S-corporation also earns interest income on its bank deposits.  Mr. Wilson earned $100,000 investing in the U.S. stock market.

The income from the store and the interest income are taxable as business income.  However, the dual resident alien continues to avoid self-employment tax.   The $100,000 gain in the stock market is not taxable by the IRS. 

The IRS  Treasury Decision 8733    states “under section 7701(b) provide that for purposes of determining the U.S. income tax liability of a dual-status alien who is a shareholder of an S corporation, the trade or business or permanent establishment of the S corporation shall be passed through to the dual status alien pursuant to section 1366(b).”

Here is what is happening. The taxpayer and the S corporation entering into an agreement to be subject to tax and withholding as if the dual resident were a non-resident alien partner in a partnership.  This means that the S-corporation withholds tax on his share of the income.  The tax is withheld at the highest tax rate.  This tax is refundable when the dual resident alien files his income tax return.

If the dual resident taxpayer does this then:
1.  the character and source of the S corporation items included in the dual resident shareholder’s income are determined as if realized by the shareholder and
2. the dual resident shareholder is considered as carrying on a business within the United States through a permanent establishment if the S corporation carries on such a business.[4]

This exception is not available if the S corporation was a C corporation[5]

Special IRS reporting: A dual resident taxpayer who is an S corporation shareholder must:
1. comply with the filing requirements and
2  must include an additional declaration indicating that he understands that claiming a treaty benefit as a non-resident will terminate the S corporation’s election unless the exception applies. [6]   IRS Form 8833, Treaty-Based Return Position Disclosure (under Section 6114 or 7701(b)) is required if the payments or income items reportable because of that determination are more than $100,000.

By the way, this blog article is the only article on this topic.  It represents on of the many innovations international tax plans found only in my book, International Tax Planning in America for the Entrepreneur, on this link.  You will learn many tried and true tax plans that no one else knows.

We recommend that you work with the IRS and get their okay of your tax plan with a private letter ruling (get more information on this link).

[1] Warning:  The regulations 301.7701(b)- 7(b).  state that the filing of a Form 1040NR by the dual resident taxpayer may affect the determination by the Immigration and Naturalization Service as to whether the individual qualifies to maintain a residency permit.

[2] Regulation 301.7701(b)-7(a)(4)(iii).

[3] Regulation 301.7701(b)-7(a)(4)(ii).

[4]  Regulation 301.7701(b)-7(a)(4)(iv).

[5]  Regulation 301.7701(b)- 7(a)(4)(iv).

[6] Regulation 301.7701(b)-7(c)(3). In part 10 FSA (field service advice) 1992-50 states   “[10]  A dual resident taxpayer who is assigned residence to the treaty partner’s country and claims to be treated as a resident of that country will be treated as a nonresident of the United States solely for purposes of computing their U.S. income tax liability. For purposes other than the computation of their U.S. income tax liability, the individual will be treated as a U.S. resident under the Internal Revenue Code. To take advantage of the treaty “tie- breaker” rule exception, a dual resident taxpayer must timely file a completed Form 1040NR tax return with a statement in the form required by section 301.7701(b)-7(c) of the regulations, attached to the return. The filing of a Form 1040NR with the attached statement is required under section 301.7701(b)-7(b) whether or not the individual has any income subject to U.S. tax.”