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" Did I really have to declare that to the IRS??? "

" Did I really have to declare that to the IRS??? ". How to Come Back into the US Tax System. Town Hall Evening Dr Guillaume Grisel “Changes in the US Tax Laws: LL.M . (Cambridge), Ph.D ., T.E.P. How it impacts US Citizens Abroad” Attorney- at - law , Bonnard Lawson.

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" Did I really have to declare that to the IRS??? "

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  1. "Did I reallyhavetodeclarethattothe IRS???" How to Come Back into the US Tax System Town Hall EveningDr Guillaume Grisel “Changes in the US Tax Laws:LL.M. (Cambridge), Ph.D., T.E.P. How it impacts US Citizens Abroad”Attorney-at-law, Bonnard Lawson

  2. Swiss-US Estate Planning in a Nutshell Pre-NuptialAgreements, Wills, Powers of Attorney, Etc. For US Citizens Living in Switzerland

  3. "Did I really have to declare that to the IRS???" How to Come Back into the US Tax System

  4. The available options What the IRS wantsyou to do: • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12) Or • "Streamlinedfiling" New StreamlinedFilingComplianceProcedures for Non-Resident U.S. Taxpayers(Sept. 2012) Whatmany people do… • "Quiet" or "Silent" Disclosure

  5. The available options What the IRS wantsyou to do: • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12) Whatmany people do…

  6. OVDP: What you have to pay • 8 years income tax + interests • Tax penalties • Accuracy-related penalties (20% of tax due) • Failure to file/pay penalties (up to 25% of tax due each) • FBAR penalty! • 27.5% of highest value of each offshore account during the 8 last years (!!!) Can be reduced to 12.5% or even 5% in some (rare) cases • Your lawyer and your CPA…

  7. OVDP: Up & down sides Upsides • Quasi-assurance of no criminal prosecution • Predictability of tax and penalties due Downsides • High penalties (in particular FBAR penalty) • Thorough audit by the IRS • High professional fees (CPA, lawyer)

  8. The available options What the IRS wantsyou to do: • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12) Or • "Streamlinedfiling" New FilingComplianceProcedures for Non-Resident U.S. Taxpayers(Sept. 2012) 8

  9. Streamlined filing: Up & down sides Upsides • Cheap and simple • 3 yearstaxonly (+ 6 years FBAR) • No penalties (onlyinterests) • Lowerprofessionalfees Downsides • Very restrictive eligibility conditions • Non-residentsince 1st January 2009 • No return filedsince 2009 • Max. $1500 /year due to the IRS • Lowlevel of compliancerisk • Lack of predictability: no assurance about criminalprosecution and penalties • All submissionsreviewed by the IRS 9

  10. The available options What the IRS wants you to do: • "OVDP" Offshore Voluntary Disclosure Program (2009  11  12) Or • "Streamlined filing" New Filing Compliance Procedures for Non-Resident U.S. Taxpayers (Sept. 2012) What many people do… • "Quiet" or "Silent" Disclosure 10

  11. « Quiet disclosure »: Up & down sides Upsides • Relatively cheap and simple (if accepted by the IRS…) • 6 yearstaxreturns and FBARs • Failure to file/pay penalties but no FBAR penalty • Lowerprofessionalfees • Generally no review by the IRS (but…) Downsides • Not consistent with IRS rules no assurance about criminalprosecution and FBAR penalties 11

  12. Which way to pick? If you are in this situation…  Considerthisway… • Eligible for Streamlinedfiling Streamlinedfiling • US resident OVDP • Sophisticated offshore tax planning  OVDP • Very important tax due  OVDP • Risk of exchange of information  OVDP • Other « high risk » situation  OVDP • Only FBAR are missing  File missing FBAR and explain • Other cases  ? 12

  13. Swiss-US Estate Planning in a Nutshell Pre-NuptialAgreements, Wills, Powers of Attorney, Etc. For US Citizens Living in Switzerland Dr. Guillaume Grisel LL.M. (Cambridge), Ph.D., T.E.P. Attorney-at-law, Bonnard Lawson

  14. Estate planning: what for? • Makesure yourassetswillbetransferred to the people youwant • Minimizethe taxburden • Makeyour relatives’ life easier by simplifying the estateprocedures

  15. Whatwillhappen to myassetsaftermydeath? • 1. Division of the marital property • Betweenthe survivingspouse and the estate • 2. Division of the estate Between the heirs (and the legatees) • + Taxes and expenses …

  16. Division of marital property • Whatwillhappenif no planning isdone? • Whichlawwillapply? Swiss or US Law? • Law of the (last) common place of residence of the spouses. •  Swisslaw • How ispropertydividedunder the Swiss«default» regime? • Acquests sharing (Errungenschaftsbeteiligung, participation aux acquêts) • Assetsearnedduringthe marriage : split 50-50 «Acquests» • Assetsacquiredbeforethe marriage: not split • Gifts / bequestsreceivedduring the marriage: not split «Ownassets» 16

  17. Division of marital property • What are youralternative planning options? By making a prenup / postnup, youcanchoosebetween: • Modifiedacquests sharing: The 50%-50% rulecanbechanged • Communityproperty(freedomas to whichassets are in or out of the community) • Separationof assets • US law if at least one spouseisUS

  18. Inheritance • Whatwillhappenif no planning isdone? • Whichlawwillapply? Swiss or US Law? Law of the last place of residence of the deceased.  Swisslaw • How isthe estatedividedunder the Swisslaw «intestacy» rules:

  19. Inheritance • Whatare your alternative planning options? By making a will or an inheritance agreement, youcanchoose to: • Modify the legalshares • Appoint new heirsForcedheirshiprights must berespected • Appoint legatees • Make an inheritance agreement • Give a usufruct to the survivingspouseOptions to « getaround » the forcedheirshiprights • Subjectyourestate to US law Pay attention to the conditions and consequences! • Appointment of an executor! • Trusts are recognized in Switzerland

  20. Inheritance Legalshares of the heirsatlaw: Forcedheirshiprights:

  21. Estate / inheritance taxes • US citizens living in Switzerland are potentiallyexposed to: • US federalestatetaxIf estate and previous gifts exceed $ 5.25 millions • Swiss cantonal inheritancetaxThe Canton in which the deceasedhadtheir last place of residence • No inheritancetax in Schwyz • US state estatetax?Possibly ,if US domicile not lost (e.g. US lawwill) • Swissfederalinheritancetax? Maybe in the (near) future …

  22. In case of incapacity… the new Swissrules Whatwillhappenif no planning isdone? • Whocanact on mybehalf in the daily life? • Guardianisappointed by the Court if: - Individualcannotsafeguardhis/herinterests - An urgent matter must besettled • Spouse or civil partnerhas limitedpowerswith respect to: • Legalacts: only if «usuallynecessary» to satisfy the needs • Assets:limited to «ordinary» management • Mail : only if «necessary» • Health care

  23. In case of incapacity… the new Swissrules Whatwillhappenif no planning isdone? • Whocanmakehealth-care decisions on mybehalf? In order: • Guardian if he/shespecificallyreceivedthis power • Spouse or civil partner if they live in the samehousehold or if he/sheprovidespersonal assistance • Descendants • Parents if theyprovidepersonal assistance • Siblings

  24. In case of incapacity… the new Swissrules What are your alternative planning options? • Daily life  Power of attorney in case of incapacity • Freedom to appoint the attorney youwant • Freedom to define the scope of theirpowersin 3 possible fields • Personal assistance • Management of the assets • Representationtowardsthirdparties • Possibility to appoint different attorneys in differentfields • Health care  Advanced medical directives • Early instructions for physicians • Appointmentof a representative for health-care purposes

  25. Thank you very much for your attention Shouldyou have any questions… • Bonnard Lawson – International Law Firm Me Guillaume GRISEL Rue du Grand-Chêne 8 CP 5463 CH-1002 Lausanne • gg@ilf.ch • +41(0)21/348’11’88

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