Tag Archives: foreign trust

Provocative International Tax Planning News for Small Business

A new U.S. Senate study reported that business with International Tax Planning are taxed at only 14%. The report explains why small businesses pay more than the legal share.  Here is why you will always pay too much in taxes.    This is the report that your international tax accountant needs to help you save taxes. 

International tax planning and strategy

Applying for an IRS ruling on your international tax planning will save you taxes in the long run.

Fantastic IRS International Gift Tax Plan

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.

Amazing IRS Avoidance of  state income taxes  with this new IRS  designer  Nevada trust.  IRS tells how to use a Nevada trust to avoid state income taxes. Here’s what’s happeningon this link.   

New- Department of the Treasury letter to the U.K. tax authorities on U.S.  tax planning for UK and EU companies.  Here is the letter from the U.S. to the U.K. 

Be an IRS tax planning wizard with our new custom Google search, on this link.  This custom search reads 300,000 pages deep inside the IRS’s website and the tax court’s website.  It is free!.  Find the answers to your tax question quickly and accurately.

18th Century Supreme Court case destroys IRS tax penalty law. Using this case, the Tax Court gave the IRS a significant 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  Supreme Court Doctrine used by the IRS to blow up an offshore life insurance plan.

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.

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

internet tax planning, saving taxes, cloud tax planning

Saving taxes with the offshore cloud computer. 

Cloud tax planning. Learn how businesses are using the cloud to avoid taxes on this link. 

E-commerce companies are avoiding state income taxes and in some cases deferring U.S. taxes.

Here is how it works.  A computer service that can provide a service (such as a tax research program) or a product (such as music, e-books, video) has special sourcing rules.  The income can be foreign source income when the computer server in a foreign country. 

Is the U.S. a tax haven for citizens of the UK, Sweden, Belgium, Canada, Luxembourg, and Austria?  Yes, says the IRS in its Publication.  Learn the magic Tax Treaty words for these lucky citizens of The UK, Sweden, Belgium, Canada, Luxembourg, Austria on this link.

International tax law regarding foreign retirement plan trusts just improved.

International tax law regarding foreign retirement plan trusts just improved. I mean a Big Improvement.

First, here is new IRS ruling on the international tax law regarding a foreign retirement plan trust.  As you read this ruling, the great tax savings are found in the bad news.  Yep, and this is why.

International tax law is a two edged sword.  A law or IRS ruling that is bad for one taxpayer can be great for another.  In this case, the good news is that the foreign retirement plan trust was not qualified as a tax deferred trust.

I had a call from Ian.  He is a U.K. citizen and has been a U.K resident all of his life. 

His daughter married an American and they live in the high income tax state of California.  Now,Ian loves California but Ian does not love paying U.S. and California income tax on his U.K. retirement trust’s pension income.

This IRS ruling concluded what I had believed to be the correct international tax law.  But, without some official guidance, I  have been telling clients that the law was uncertain.    

Some clients were afraid of the IRS and decided to pay tax on their foreign pension income.

Back to Ian.  I called him today and told him that I wanted to examine U.K. retirement plan trust agreement.  I need to compare the terms of the trust to the IRS ruling.  Sure enough, the terms matched.

International tax law regarding foreign retirement plan trusts can avoid U.S. taxation.

This is how it works. This is what you want your CPA to notice.  This IRS ruling refers to section 83 of the tax code.  This section is an anti-taxpayer section.   Remember the double edged sword?  Anti-taxpayer is good if you are not an American.

Section 83 states that you are taxable on the money your employer sets aside for your retirement.  You are taxable even if you can’t access the money until your retire, die or are disabled.    The only exception is when the money is in a “qualified retirement plan”.

An American tax doctrine is called the “annual year”.  Therefore, what happens in 2018 is not affected by what did or did not happen in 2017.  Ian had 30 years of money placed into his U.K. retirement plan.

Since the plan was not a qualified plan, he was taxable on the money for the last 30 years had he been an American or a permanent U.S. resident (a green card).  But, he wasn’t.

Since he would have been taxable for the last 30 years, Section 83 provides that he is not taxable now.  In Ian’s case, International tax law regarding foreign retirement plan trusts allowed him to legally avoid taxes.    

However, International tax law regarding foreign retirement plan trusts will not allow everyone to avoid taxes.  It depends on the terms in the foreign retirement plan. 

If you want a tax study and report for your tax returns (not just this current year but for all the future years), then contact me, Brian Dooley, CPA, MBT at [email protected]

If you are looking for more international news, please click on this link.

Foreign trust tax planning and asset protection using the IRS blueprint

saving taxes, how to save taxes, tax planning,

Saving taxes by requesting a private letter ruling from the IRS National Office.

The IRS has a new blueprint on foreign trust tax planning and asset protection.  And it is very good!

The IRS issued a legal memorandum providing the blueprint for protecting assets and saving taxes. 

The tax advantage of a foreign trust is its classification as a “grantor trust.”  This tax plan uses a special asset protection section of the tax code, section 679.

Unlike a domestic trust, all assets transferred to a foreign trust are allowed “grantor trust” status (with one tax planning exception explained below).  They are also excluded from the taxable estate of the settlor.

As a “grantor trust,” the tax law allows the transfers of assets to the trust to be income tax-free.  Thus, you can do what you want to protect your assets and reduce estate taxes without worrying about income taxation.  

Foreign trust tax planning and asset protection is important for the small business owner.

This IRS blueprint on foreign trust tax planning is the explained in this episode of my radio show, Tax Talk below.

The play time is about 22 minutes. If you would like to see how a foreign trust fits into your business, then contact me, Brian Dooley, CPA,MBT at [email protected].

you want to defer income taxes, then fund the foreign trust with a loan due within five years.  

Such a loan is called a “qualified obligation.”  This makes the trust a tax deferral vehicle. The tax deferral can last for more than a century.  This type of a trust is named “non-grantor foreign trust.” 

The IRS Form 3520-A (filed by the trustee) details the tax planning structure for a tax-deferred foreign trust.  You will want to use the “qualified obligation” found on page 3 of the Form 3520 (filed by the settlor).   Learn more about this form on this link.

If you would like to discuss your questions about a foreign offshore trust, then send me, Brian Dooley, CPA an email at [email protected] or get my book (on this link) to learn how Nat King Cole designed his foreign trust (and beat the IRS in the Tax Court).

Foreign Investors Learn Why a Foreign Corporation 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 have an inheritance tax.  Estate taxes and inheritance differ.  This difference challenges international inheritance tax planners. 
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Tax Planning and Asset Protection using IRS Rules for a Promissory Note and a Foreign Trust

Saving taxes and protecting assets with a trust just became easier.

New IRS regulations will allow your tax planners, with pinpoint accuracy, shift income.  More importantly, these regulations allow a shift in the income’s character.  These same IRS rules legitimize a new strategy for protecting assets.

You see, the Wealthy know tax planning is not about deductions.  Tax planning is about income shifting and income character.

Every small business owner should have an asset protection trust. It is like going to Las Vegas and taking a few poker chips off the table.

Shifting income to a corporation or a trust in Nevada (a tax haven state) is an easy way to have more money.  In many cases, it is just as easy to shift the income to a corporation or a trust in a tax haven country.

With these new IRS regulations, a transfer of money to a related entity can accurately be classified as income, a loan or a capital investment.

Just think, I take a piece of paper, type in the correct words creating a “promissory note”.  Upon signing this paper, I created what is known in tax law as” property”.

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