Chess Pieces on a Chessboard

Offshore Assets

Today, business is more global than ever, and American citizens have more international assets than at any time in the past. As a result, the U.S. Congress passed the Foreign Account Tax Compliance Act in 2010, and the Internal Revenue Service (IRS) increased the disclosures required regarding offshore assets, seeking to increase tax revenues and curb offshore tax evasion. In light of this increased attention and reporting obligations, it is more important than ever to ensure you are in compliance with your international tax reporting obligations. At the Ben-Cohen Law Firm, our tax specialists have the experience to assist you with foreign asset tax issues, whether you are a U.S. citizen with foreign assets or a foreign national doing business in the United States. We utilize the expertise of both a Los Angeles offshore asset attorney, certified by the State Bar of California Board of Legal Specialization as a Taxation Law Specialist, and a licensed Certified Public Accountant (CPA), to advise you on the complex rules governing international tax reporting.

Ensure Compliant Reporting of Foreign Business Transactions

The most common reporting forms for foreign assets are Form 8938 and the FBAR. Form 8938, the Statement of Specified Foreign Financial Assets, covers reporting of foreign financial assets, provided the total value of those assets exceed certain thresholds. The FBAR, or Report of Foreign Bank and Financial Accounts, applies generally to all U.S. persons with a financial interest in, or signature authority over, foreign accounts that exceed more than $10,000 in aggregate at any time during the tax year.

In addition to the FBAR and Form 8938, however, substantial reporting requirements exist in relation to international transactions and business. An offshore asset lawyer at our Los Angeles firm can explain these requirements. U.S. persons who own an interest in foreign corporations may be required to file the complicated Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations. The form requires owners to disclose their ownership share of a foreign corporation at the end of the year and provide financial information of the entity such as the balance sheet and income statement. However, Form 5471 has complex attribution rules that could increase an owner’s share of the foreign corporation, and failure to apply these rules properly could lead to substantial penalties for non-compliance.

Business owners considering transferring their appreciated property to a foreign corporation with an eye toward utilizing the corporate “non-recognition” rules and potentially avoiding additional U.S. taxes should note that, although these transfers are feasible in some situations, the IRS imposes substantial limitations when the transfer involves a foreign corporation. Section 367 of the Internal Revenue Code spells out these limitations. In many cases, these transfers involve filing Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation and substantial other filing requirements which require the assistance of an advisor with significant international tax experience.

Passive Activity Reporting

If a foreign entity derives a sufficient percentage of its assets or income from passive activities, it may qualify as a Passive Foreign Investment Company, and a U.S. person with an interest in the company, direct or indirect, may be required to file Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company. 

Furthermore, U.S. persons may be obligated to report their holdings and income in foreign partnerships using Form 1065 and/or Form 8865. Our offshore asset attorneys can advise Los Angeles clients and others on whether they need to file this form. Form 1120-F applies to foreign corporations having income that is “effectively connected” with a U.S. trade or business, which typically means any foreign corporation with an employee, office, warehouse, or production facility in the U.S. Taxpayers may benefit by applying income tax treaties to reduce double taxation between two countries and mitigate US tax consequences.

An integral part of our practice as Los Angeles offshore asset lawyers involves advising both U.S. persons regarding their reporting requirements related to foreign assets, as well as assisting foreigners doing business in the U.S. Many of the reporting requirements are extremely complicated, and the assistance of an experienced professional can prove invaluable. If you have questions about your foreign assets, or desire legal assistance with regard to coming into tax compliance, contact the tax attorneys at the Ben-Cohen Law Firm.

Client Reviews
I approached Mr. Ben-Cohen regarding a pending case with the State of California and my small business. During a time that was quite stressful, I found Mr. Ben-Cohen to be the perfect person to represent me and my company. He communicated with me in clear terms so that I understood everything that was taking place in a timely manner. He treated my situation with the type of candor you only find in a consummate professional and successfully negotiated a deal with the State of California that far exceeded my expectations. I found him to be kind, efficient, sensitive and nothing short of brilliant. I consider myself fortunate to have met him and highly recommend his services. I will not hesitate to use his firm in the future should a need arise.
★★★★★
I am an international tax advisor and have worked with Pedram on more than a dozen difficult and challenging cases. Pedram's clients and fellow advisors highly respect him because he has an uncanny ability to quickly identify and work diligently to resolve his clients' issues. Pedram is pragmatic in his approach. He is transparent with his clients and dedicated to getting to a fair and reasonable outcome. I have attended an IRS Appeals conference with Pedram and would want no other attorney on my side. Pedram is extremely passionate in his work and representing his clients. He is also enjoyable to work with and develops very good relationships with his clients and fellow advisors. I highly recommend Pedram for any tax controversy work. Avvo, Curt
★★★★★
Top Drawer Tax Fraud Lawyer. Pedram got me out a CI jam I thought I would not resolve. He is also fair and reasonable with his billing. I interviewed 4 top Tax Fraud Lawyers in LA and went with Pedram...Glad I did! Google, Michael Jeppson
★★★★★
Pedram Ben-Cohen at Ben-Cohen Law Firm, PLC is one of the most incredible, creative, and caring attorneys I have ever dealt with. He gave us hope but also gave us the reality and worst case scenario. He fought for us tooth and nail. The attention and time Pedram put into the case was like no other. He charged us more than fair and was very reasonable in every aspect. He is not the kind of attorney that charges for every minute. I liked him very much not only as an attorney but as a person because he is very honest, is true to his integrity, and is dedicated to his clients. He loves what he does and has the passion to protect and defend his clients, which totally shows in his work and our outcome. We originally hired another attorney from a famous firm who basically did not give us much hope on our case . That is when we came to Pedram who won our case in a short amount of time and got us the outcome we were looking for. Because of Pedram and his creativeness, willingness, and dedication, he got us our favorable outcome. He is our go to attorney for sure, without a doubt. Avvo, Anonymous
★★★★★
A few years ago I had a major tax problem and I was looking for the right professional tax lawyer. I interviewed at least five experts and all of them were very professional. I am very picky. When I met Mr. Pedram Ben-Cohen, it took me no more than five minutes to decide that he was the one, and I was absolutely right with my intuition. He is very professional, knowledgeable, smart, and knows his job perfectly. In addition to all of his professional skills, as a person he is very friendly, pleasant, ready to help, and took care of me like I was his own family. I referred and recommended him to friends and family with tax problems and will continue to do so warmly to anyone. I know that he is able and will do his job the best way for his clients. He is my personal tax lawyer and expert and will remain so. Google, Shlomo Kattan
★★★★★
Contact Us
Contact form