About Rev. Proc. 2020-17 and How it May Favorably Affect Your Foreign Trust
Breaking Tax News on Foreign Trusts: IRS Announcement March 2, 2020
As of March 2, 2020, U.S. taxpayers, expats or permanent residents with ownership or interests in a “U.S. Favored” Foreign Trust are exempt from reporting these interests and may be eligible for refunds on past reporting.
The new guidelines issued by the Internal Revenue Service exempt current and former U.S. citizens and residents from obligations to report ownership and money transfers to their foreign retirement, medical, disability and educational plans that are foreign trusts.
As of tax year 2019, qualifying individuals are exempt from disclosing their interests under the foreign trust reporting rules. In addition, the IRS will give taxpayers the right to request a refund or abatement of penalties paid for omissions made in previous years.
An accountant with international tax expertise can determine with certainty if your particular trust will qualify under the new rules and make a determination as to an individual’s eligibility for redress of previous penalties.
The IRS makes clear that these new guidelines do not “affect any reporting obligations under section 6038D or under any other provision of U.S. law, including the requirement to file FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), imposed by 31 U.S.C. section 5314 and the regulations thereunder.”
To download the entire IRS-issued white paper on the new U.S. Favored Foreign Trust provisions, click here.
This is potentially good news for those that hold certain retirement, education and medical foreign trust interests. A skilled global tax advisor will look at your entire investment portfolio, and can help you determine if you qualify for an exemption and refunds under the revised tax law.
Click here to book a consultation to discuss your tax situation as it relates to your foreign trust holdings.