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Taxation of Transferring Funds From Abroad

Pedram Ben-Cohen is an Attorney-at-Law and a Certified Public Accountant (CPA) who specializes in civil and criminal tax controversy and litigation. Mr. Ben-Cohen is also a Certified Taxation Law Specialist, certified by the State Bar of California Board of Legal Specialization. Mr. Ben-Cohen represents clients in civil and criminal tax matters, including voluntary disclosures, offshore matters, audits, appeals, litigation, and collection defense.

Prior to establishing the in 2009, Mr. Ben-Cohen was associated with the international law firms of Latham & Watkins, LLP and Gibson, Dunn & Crutcher, LLP. He also gained tax controversy experience working at Deloitte & Touche, LLP and the Tax Division of the U.S. Attorney’s Office. Mr. Ben-Cohen was admitted to the California Bar in 2003.

Mr. Ben-Cohen graduated from Georgetown Law School and earned a B.S. degree from the University of Southern California, where he majored in accounting.

Three Typical Sources of Funds
  1. Gifts from Family
  2. Sale of Real Estate
  3. Bank Accounts
Gifts From Family
  1. Gifts from Non-U.S. Persons
    1. Form 3520, Annual Return to Report Transactions with Foreign Trusts
    2. and Receipt of Certain Foreign Gifts
    3. Failure to timely file Form 3520 may result in a penalty of up to 25% of
    4. the gift
  2. Gifts from U.S. Persons
  1. Annual exclusion
    • $15,000 in 2020
  2. Unified lifetime exemption
  3. Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return
    • $11.18 million until 2025 ($22.36 million if filing jointly)
Sale of Real Estate
  1. Cost Basis
    1. Purchase price
    2. Fair market value at time of inheritance
    3. Carryover basis if gift
  2. Schedule D, Capital Gains and Losses
  3. Sale documents translated in English
  1. Federal Capital Gains Tax
    • 15% if income is between $40,001 and $441,450 ($80,001 to $496,600 if filing jointly)
    • 20% if income is over $441,450 ($496,601 if filing jointly)
    • Obamacare Capital Gains Tax
      • Additional 3.8% if income is over $200,000 ($250,000 if filing jointly)
    • California Capital Gains Tax
  2. Taxed as ordinary income, up to 13.3%
  3. Sale documents translated in English
Bank Accounts
  1. Non-Willful vs. Willful
  1. Disclosure of the accounts to accountant or others
  2. Source of the funds: unreported income, inherited funds, gifts
  3. Taxpayer’s education, profession, command of English language
  4. Level of involvement in investment activity and account mgmt.
  5. Reasons for opening the foreign account
  6. Manner account was held
    • In name of taxpayer, numbered account, nominee entity such as trust/corporation, hold mail
  7. Amount of money in the account
    • $100,000 vs. $100 million
Bank Accounts
  1. Non-Willful
    1. Streamlined Domestic Offshore Procedures
      • FBARs for 6 tax years
      • Amended tax returns for 3 tax years
      • 5% miscellaneous offshore penalty of highest aggregate foreign asset value
      • Taxes owed plus interest
    2. Streamlined Foreign Offshore Procedures
      • FBARs for 6 tax years
      • Original or amended tax returns for 3 tax years
      • No penalties
      • Taxes owed plus interest
Bank Accounts
  1. b. Willful
    1. Criminal Clearance
      • Form 14457, Voluntary Disclosure Practice Preclearance Request and Application
    2. Automatic Examination
      • Tax returns and FBARs for 6 tax years
      • 50% FBAR penalty
      • Accuracy-related penalty applied to 5 tax years
      • Civil fraud penalty applied to 1 tax year

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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. Google, We Care Spa
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
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