Tag Archives: international tax accountant

Provocative International Tax Planning News for Small Business

International tax planning is going “crazy” with the 2018 GOP tax law.  International tax avoidance has never been more legal.  The tax savings have never been so Big!  It is time for you invest money with your international tax accountant and upgrade your plan.   

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. Alien’s estate tax exemption is only $60,000.

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 companiesHere 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.

UK, Sweden, Belgium, Canada, Luxembourg & Austria Citizens U.S. Tax Planning

UK, Sweden, Belgium, Canada, Luxembourg & Austria U.S. tax planning in the United States looks at the unique tax treaties for these citizens.  Below are the magical words from the Tax Treaties for the citizens of The UK, Sweden, Belgium, Canada, Luxembourg, Austria, Thailand and Tunisia:

“An individual who is a United States citizen or an alien admitted to the United States  for permanent residence (a “green card” holder) is a resident of the United States only if the  individual has a substantial presence, permanent home or habitual abode in the United States and if that individual is not a resident of a State other than the name for other country for the purposes  of a double taxation convention between that State and the name for other country.”

 UK, Sweden, Belgium, Canada, Luxembourg & Austria U.S. tax planning starts with your U.S. Visa.

Tax Treaties with these words allow U.S. resident aliens to legallyavoid U.S. income taxes on their foreign income.  

 For example,  Mr. Bond, a U.K. citizen has a substantial presence in the U.S.  He does not have a green card.  He is in the U.S. on an investor visa. Mr. Bond only pays U.S. income tax on his U.S. income.  The income from his U.K. business and all other foreign companies or investments is U.S.

Mr. Bond only pays U.S. income tax on his U.S. income.  The income from his U.K. business and all other foreign companies or investments is U.S. tax free.

IRS Publication 519 “states that the U.S. domestic rules that determine if a non-U.S. citizen is a U.S. resident do not override tax treaty definitions of residency.”

Below is our e-book of IRS Publication 519 explaining international tax planning for Sam, a U.K. citizen living in the U.S.

The IRS example discussing Sam applies to citizens of UK, Sweden, Belgium, Canada, Luxembourg, Austria, Thailand and Tunisia.    If you want the PDF version of this IRS publication, then email me at [email protected]

If you have overpaid your U.S. income taxes and want a refund, then email me, Brian Dooley, CPA, MBT, at [email protected] We work with other CPAs.

International Law Los Angeles

International law Los Angeles style is unique.  “International law Los Angeles” includes California income tax law.  California’s water edge election helps the international business.

The California water’s edge election assures the international business that it will not pay State income taxes on its foriegn profit.   Your international tax accountant should discuss this with you.

Los Angeles is a multilingual city.  It is one of the most popular city for the start-up of an international business because of the favorable tax law.

An example of “International Law Los Angeles” for an United Kingdom Corporation.

Tax savings with the international law Los Angele include the new low U.S. income tax rate. A foreign corporation U.S profit is taxed at  21%.  While the State tax rate is 8.8%, the State does not tax your non-U.S. income.

Likewise, the U.S. generally does not tax a foreign corporations non-U.S. income.  As a result, Los Angeles is not an important international tax haven.

For example, Ian owns a U.K. company.  He wants to expand the business to the U.S., Canada and Mexico.  The U.S. has a trade agreement with each of these countries (known as NAFTA).

The U.K. company opens an office near the port in Los Angeles.  The London office keeps the authority to “negotiate, conclude and approve” (an important U.S. tax law).

The U.K. company ships its inventory from London to be warehoused in L.A.   The U.K. company sells its products to distributors  in the U.S., Canada and Mexico.

Its international tax accountant know “international law Los Angeles”.  The U.K. company made the State water’s edge election.

The profit earned from the Canadian and Mexican customers is tax free.  California does not tax this profit.  The U.S. does not tax this profit.

The international tax accountant knows of the U.S. branch profits tax (more on this link).  The CPA helps the client keep an accurate general ledger.   The branch profit tax does not apply to the non-U.S. income.   The U.K. company avoids this tax by working closely with their international tax accountant.

In Summary: “International Law Los Angeles”

From the internet, you would never guess that Los Angeles and California can by an international tax haven.  Just, think.  Banking in the USA, great lifestyle, no “blacklist” and a fantastic international tax have is yours because of the “International Law Los Angeles”

If you need help getting started, then contact me, Brian Dooley, CPA, MBT at [email protected]  We can prepare for you a “startup tax study”.  All we need is your business plan.  

International Gift Tax Strategy and Planning

International gift tax strategy and planning can be a challenge for the international tax attorney and accountant.   The non-resident alien does not get the preferred tax law available to Americans. 

As a result, gifts to their family in the United States is often taxable.  The IRS can collect the tax from the individual that received the gift. 

For example, parents in Hong Kong make a bank wire transfer in the amount of $200,000 to their son.  The IRS can collect the gift tax from the son. 

In this blog, I review one items that seem to cause unexpected U.S. gift tax.  The  items is a gift of money (such as  a check or bank wire transfer or cash).

To get a complete understanding of the U.S. international gift tax and estate tax laws, I recommend by book (for $9.50) available at Amazon on this link.

International gift tax strategy and planning for a gift of Money

The treatment of a gift of money (not paper dollars but checks, wire transfers and other banking transfers) is very unclear.  So, unclear that the foreign individual should never make such a gift.  This blog does have a possible international  gift tax strategy and plan.  So, please keeping reading.

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Why You Will Always Pay too Much in Taxes

Nothing is more complex than income tax. Yet, most small business owners meet with their CPA at year end with the fantasy that this will save taxes. At best, it reduces this year's taxes by increasing next year's taxes.

Einstein stated that “The hardest thing to understand in the World is the income tax.”  Yet, most small business owners meet with their CPA at year end with the fantasy that this will save taxes. At best, it reduces this year’s taxes by increasing next year’s taxes.

  Think of 1,000,000 pages written over 100 years by different people with different agendas.  Big Business exploits this complexity by hiring the best international tax accountants. 

However, small business sees the international  tax accountant as an unwanted expense. 

The complexity is caused by the process. Great Depression tax laws apply to international businesses.  World War II tax laws apply to small (and big) business.

Starting  50 years ago (1967), our Government began using  “patches” to get the Tax Code to make social changes (this is known as socialism).  The current tax reform is more than 400 pages of patches. 

Now, don’t blame anyone party.  Both sides jumped on patch bandwagon.  The result is 1,000,000 of pages of conflicting laws.

Most small business owners budget an hour or so of their CPA’s time for “year-end” tax planning.   Meanwhile, the news reports that firms like General Electric have 2.3% tax rate over the last decade.     GE’s tax department is larger than all of the IRS’s international tax department.

Great firms invest in their tax structure.   Business tax planning fees are tax deductible. Here, in my lovely state of California, $10,000 in tax planning fees is only $4,700 of after-tax dollars (our marginal highest tax rate is  53%).

While the conflicting laws are very complex, they create 1,000s of international tax accounting strategies.   Here are a few:
1.  Cash advance payments can be tax-free for decades (more on this link).
2.  Small business owners over age 57 have huge tax savings with private pension plans
3.  Importers can use the Bush administration contract manufacturing laws to avoid taxes (more on this link) legitimately.
4. The IRS has designed a new type of trust to help you avoid state income taxes and protect your assets (more on this link).
5.  President Reagan’s privately owned insurance company tax law allow you to have your insurance company.  You can self-insure and pay your domestic insurance corporation up to $1.2 million a year tax-free.  This is known as a captive insurance company (more on this link).
6.  Defer taxes (like Disneyland) with gift cards and other private money (more on this link).  Use an offshore corporation as the “maker” of the gift cards. 

Thousands of International Tax Strategies used by the best International Tax Accountants

International tax accountants do not have a book of these.  Your CPA must spend time with you and learn the details of your business.  Your tax loophole maybe your inventory method, your e-commerce website, your multi-state transactions, your business insurance (or the items that you are not insuring) and the list goes on.

Domestic Tax Planning collaborates International Tax Planning

For example, Bob has a successful web based business.   He has a few part-time employees and independent contractors assisting him.   He wants to be a tax haven. Yes, Bob, himself wants to be a tax haven.  He learned about the new solo 401-K tax law.  Bob can be the sole trustee, sign on the bank account, buy real estate that is financed, buy stocks, bonds, and stock funds.   Like former Presidential candidate Mitt Romney, he uses the solo 401K plan to own tax haven offshore corporations (more on this link). 

He started the fund in November.  By January he placed more than $100,000 tax deductible dollars into the plan.  This saved him $50,000 in taxes.  Of course, the investment profits will be tax-free.  He hired a law firm to establish the plan and maintain the plan.  The cost over two years is $10,000 deductible dollars (so after tax $5,000).    $5,000  saves $50,000.

Bob also used a 1954 tax law on medical reimbursement plan.   He paid $15,000 to his attorney to draft the plan.  This plan does not have to file a tax return, so there is no annual cost.  The plan pays for all the supplements required by his doctor, his co-pay, and therapies not covered by insurance.   He saves $10,000 a year in taxes for a $5,000 one-time deductible ($2,500 after-tax) cost.  $2,500 saves $10,000 year after year.

If you would like to discuss your tax concerns, ,then email me, Brian Dooley, CPA, MBT, at [email protected].