Tag Archives: offshore tax planning

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.

Best International Tax Planning Book on the Planet, By Far

Here are the first few chapter of my easy to read book International Tax Planning in America for the Entrepreneur.   The book is a quick two-hour read with little tax jargon.  You will quickly learn the fundamentals of international taxation planning.  My international tax planning book explains the unique tax savings for the small business,  web based business, tax planning for importers and exporters and the best tax structure for the foreign business coming to the U.S. 

You can get the book on Amazon on this link.  The Kindle is only $9.50  (get the Kindle App for the PC on this link).  The book is also available in paper and audiobook. 

International Taxation in America for the Entrepreneur is the fastest tax answering publication in America. Both the  Kindle and PDF edition have our exclusive quick search function. Just type your topic and find the answer to any international tax planning question.  The audiobook is perfect for those on the road and traveling. 

International Tax Planning Book for the Cross Border Family

Cross Border families have special needs because America’s laws differ from every other country. The multi-national family risks paying taxes in more than one country.  Choosing the correct tax structure before arriving in the U.S. is required. 

A cross-border business has a similar problem.  Multi-national businesses often experience double taxation on one item.  American tax laws are different from the rest of the World.    Thus, you need the best international tax planning book on the Planet.  

Using  “plain English” my book provides solutions to issues regarding cross border taxation.  The examples are easy to understand.  

 For those looking for advance tax planning, the hundreds of footnotes and hyperlinks to court cases and tax planning articles are just a mouse click away.

My international tax planning book is available in audio, Kindle and hard copy.  Need more information.  Then please check out this blog post in offshore e-Commerce international tax planning. 

Saving Taxes with a Late-Filed Form 5471 (Controlled Foreign Corporation)

Big Data, Big Brother, IRS, roboaudit,

IRS Private Letter Rulings provide you certainty in your foreign tax planning. .

Offshore tax planning involves filing Form 5471 by any U.S. person owning shares of a foreign corporation. If the Form is not filed, audit time period of  your individual and domestic corporation return never ends.  

For example, in 2016 you own a foreign corporation.  You did not know that Form 5471 must be filed.  Ten years later, the IRS audits your 2026 return and discover you owned a shares of a foreign corporation in 2016.  The IRS can audit your 2016 return in 2026. 

We found an internal IRS letter stating that the IRS that once your file the Form,  the IRS is limited in its ability to assess taxes.  Lesson: It is better to be late than to never show up (or in this case file the tax form).  

The IRS issued this letter as  IRS Letter Ruling 201432020 which is below in blue print.

If you need help with your international tax concerns, then please email me, Brian Dooley, CPA, MBT at [email protected] 

The IRS internal letter is below is blue. 

Number: 201432020  Release Date: 8/8/2014 

From:  IRS International Tax
Sent: Tuesday, July 22, 2014 3:17:00 PM

Subject: Section 6501(c)(8) 

I understand you have a question about 6501(c)(8) as it relates to one of your cases. I  hope this clarifies things for you.    

In your case, section 6501(a)’s period of limitations would have expired in prior to the effective date of the HIRE Act.  Section 6501(c)(8), however, prior to the HIRE Act would have kept the statute open as to the entire return due to the taxpayer’s failure to file the Form 5471.   

When the HIRE Act came in 2010, amending slightly section  6501(c)(8), the effective date provision of the Act provides that the HIRE Act (2010) version of 6501(c)(8) applies to returns filed after the effective date (not our case) AND, returns filed before the effective date (our case) if the section 6501 statute of limitations was still open as of the date of the enactment of HIRE Act.

 Given that the period of limitations was open on the whole return under the pre -HIRE version of the 6501(c)(8) at the time of the enactment of HIRE Act, it remains open under HIRE act as to the whole return.   

If the taxpayer files the missing 5471, however, and establishes that it had reasonable cause for the late filing of the form, then the statute of limitations under section  6501(C)(8) would be open for a period of three years from the date of the filing of the form, but the assessment period would only be open as to the items related to the late-filed information return pursuant to 6501(c)(8)(B).   (Author note:  This is great news.  Most attorneys and CPAs believe that your entire return was open to assessment; not merely the items of taxable income on the Form 5471)

If any other provision of section 6501 keeps the assessment period open for a longer period of time (such as 6501(e) or (c)(3)) then we would rely on the longest assessment period possible. 

Internal Revenue Service
Office of Chief Counsel
1111 Constitution Ave., NW Washington, DC 20224

Trump “I Fight Very Hard to Pay as Little Tax as Possible” & Shouldn’t You?

Mr. Trump is not the first President that promote legal tax avoidance.  We know that Big Business and the Wealthy pay less in taxes.   If you own a business or real estate, my  the question is “Why don’t you?”

tax planning, avoid taxes, small tax business,

President John Kennedy (Democrat) is the most respected president of last century. The President and Supreme Court Justice Hand agreed that patriotism does not mean paying more than your legal share.
Supreme Court Justice Holmes said tax planning means you get as close to that legal line as possible

As JFK stated, the less you pay in taxes, the more money you have to create new jobs as you expand your business.

While President Kennedy as a Democrat, he and his family were very wealthy.  He and his family knew that it takes money to make money.

Senator Bernie Sanders paid tax at 13% and reported that tax planning corporations are taxed at an average of 14% (more on this link).

Yet, most small business owners believe tax planning means talking to their CPA at year end.

This is not tax planning.  Tax planning is closely looking at each function of your business. Then you optimize that function’s structure to avoid taxes.

Presidential Candidate Mitt Romney provides such example.  He has offshore businesses.  To bypass all the complex controlled foreign corporations tax laws,  he used a self-directed retirement plan,  You can learn how to use a Romney type self-directed retirement plan on this link.

mitt Romney IRA,

Big tax savings require a long term tax strategy. As long as you keep thinking “year end” tax planning, you will always pay more than your fair share of taxes.

This is why he is a billionaire.   He spends money to save money.  While most small business owners spend more on car maintenance than tax planning.

Since his plan, a new plan allows has been enacted for small business.  It is called the “Solo 401K” plan and your can learn how to use it on this link.

The Trump $billion legitimate tax loss is not from “year end” tax planning.  It is planned years in advance.  Mr. Trump had to avoid the following laws that prevent such a loss:
1.  “At Risk” limitation,
2.  “Passive loss” limitation and
3.  “Forgiveness of Debt” income.

Often I wonder if one of the reasons a small business becomes a big business is their passion for legal avoid taxes.  When LifeCycle started in a garage in Irvine (my home town), we had many breakfast meetings talking about taxes.   Year-end tax planning was never a topic. LifeCycle is now a “Big Business” with  40 years of success.

What you can do to have more money by paying less taxes.
1.  Be the leader of your tax team (usually a CPA and attorney).
2.  Be willing to work hard to avoid taxes
3.  Focus on the reward of having more cash to pay your bills and expand your business
4.  Be willing to spend $1 (on professional fees) to save $5 in taxes.
5.  Dissect your business and examine the tax laws for each activity.

If you want to save taxes like a billionaire, then create and work with your tax team. Meet no less than once every three months.  

Meanwhile, please enjoy our radio tax show on Blog Talk, entitled Presidential Loopholes.

tax planning, avoid taxes, small tax business,

Great Tax Savings using the New IRS Regulations on Debt versus Equity

tax planning, avoid taxes, small tax business,

President John Kennedy (Democrat) is the most respected president of last century. The President and Supreme Court Justice Hand agreed that patriotism does not mean paying more than your legal share.
Supreme Court Justice Holmes said tax planning means you get as close to that legal line as possible.

If you were a tax nerd, like me, you would have read many many articles on the new IRS section 385 regulations (debt versus equity transactions).  Nobody like change and that applies to most tax planners.   But for every action, there is an equal reaction.

While corporate tax planning will be more complex with these regulations, small business tax planning is improved.

 This blog looks at shifting income and wealth by valuing a promissory note.  For estate tax planning, you want the note to have a low value.

For small business income tax planning, you want the note to have a high value or a low value. In the example below,  the note had a low value.  
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