Effectively Navigating International Taxation Challenges

U.S. citizens with international investments must take appropriate measures to comply with federal tax laws. The federal government closely scrutinizes offshore bank accounts and devotes substantial resources to enforcing compliance with its tax laws. Foreign nationals living and working in the United States potentially face many tax complications as well.

In these and other situations, careful guidance and intelligent counsel from a knowledgeable tax attorney will create significant value. At Goldburd McCone LLP, our Manhattan law firm represents an international clientele, taking on the complete range of international taxation matters for individuals and businesses, including:

• Failure to pay taxes on international accounts
• Foreign bank account report (FBAR) requirements
• Foreign Account Tax Compliance Act (FATCA) matters
• Unreported foreign income and accounts
• Capital gains taxes involving the sale of foreign real estate and investments
• International tax planning/expanded worldwide planning (EWP)
• International tax controversies involving foreign trusts, bank accounts or business ownership
• Foreign tax credits/deductions related to international business transactions
• Tax liability for American business activities abroad
• Declaration of overseas assets in foreign bank accounts
• Global intangible low-taxed income (GILTI)
• Foreign Investment in Real Property Tax Act (FIRPTA)
• Tax obligations for foreign athletes, artists and entertainers working in the United States
• Subjugation for international business activities within the United States or those who receive income from American sources

Whatever your tax needs, we will provide effective, candid representation aimed at minimizing your overall tax burden while complying with all applicable regulations.

Protecting Your Rights And Your Foreign Investments

Many taxpayers are surprised to learn that the federal government has vast powers to collect taxes on overseas accounts. FATCA requires foreign banks to identify U.S. citizens and residents who have accounts totaling more than $50,000. Furthermore, under FBAR, any U.S. taxpayer with overseas holdings totaling more than $10,000 at any point in a given year must file a report with the government.

While these laws can make foreign investment cumbersome, businesses and individuals can still use foreign accounts for their investments with careful planning. Our lawyers have full command of these issues and can develop innovative, ethical strategies that help you achieve your goals. If the government claims that you have not reported foreign accounts or have failed to pay taxes on foreign accounts, we will be prepared to take decisive action on your behalf.

Schedule Your Case Evaluation Today

Call our New York law firm at 212-302-9400 or toll-free at 844-653-2873, or complete our online form to begin.

Frequently Asked Questions

What are FBAR reporting requirements and who must file?

You must file an FBAR if your combined foreign accounts exceed $10,000 at any point during the year, even if just for one day, with penalties up to $12,921 per account for non-willful violations or 50% of account balances for willful failures. This requirement captures all foreign bank accounts, investment accounts, and even indirect interests through foreign entities, making compliance critical for anyone with overseas financial ties.

How does FATCA differ from FBAR requirements?

FBAR requires reporting foreign bank and financial accounts over $10,000 to FinCEN, while FATCA Form 8938 requires reporting a broader range of foreign assets starting at $50,000 to the IRS with your tax return. You often need to file both since they cover overlapping but different assets and have separate penalty structures, with FBAR penalties being particularly severe at up to 50% of account values for willful violations.

What happens if I haven’t reported my foreign bank accounts?

Unreported foreign accounts face penalties ranging from $12,921 per account for non-willful violations to 50% of the account balance or criminal prosecution for willful concealment, but the IRS offers amnesty through programs like the Streamlined Filing Compliance Procedures. Coming forward voluntarily before the IRS discovers your accounts can reduce penalties to 5% or even zero, while waiting until you’re caught eliminates these options and maximizes both financial and criminal exposure.

What are the tax obligations for foreign athletes and entertainers performing in the U.S.?

Foreign athletes and entertainers face automatic 30% withholding on their U.S. performance income unless they secure a Central Withholding Agreement or treaty benefits to reduce the rate based on their actual tax liability. They must file U.S. tax returns reporting income from competitions, endorsements, and appearances, with residency status determining whether they owe tax only on U.S.-source income or worldwide earnings.

Can foreign tax credits reduce my U.S. tax liability?

Foreign tax credits offset your U.S. taxes dollar-for-dollar for taxes paid to other countries on the same income, preventing double taxation on foreign earnings like wages, dividends, or business profits. The credit is limited to the U.S. tax rate on that foreign income, meaning you can’t use high foreign taxes to reduce U.S. tax on domestic income, and excess credits can be carried back one year or forward ten years.

What is international tax planning and when should I consider it?

International tax planning legally structures your global operations to minimize taxes through strategies like treaty benefits, transfer pricing, and efficient entity structures while navigating different countries’ tax systems and anti-avoidance rules. This requires balancing legitimate tax reduction with compliance obligations across multiple jurisdictions, as aggressive positions can trigger audits, penalties, and reputational damage from tax authorities increasingly sharing information through agreements like FATCA and the Common Reporting Standard.

How can I protect my foreign investments while remaining compliant?

To protect foreign investments while remaining compliant, you must manage risks from political instability, currency fluctuations, and legal challenges. This is balanced with strict adherence to tax reporting and disclosure requirements in both the host country and your home country.

Disclaimer: this is not financial advice.