Category: Tax Treaty

HISTORY OF FOREIGN BANK ACCOUNTS AND U.S. REPORTING

Below is the history of the Report of Foreign Bank and Financial Accounts, hereinafter also referred to as FBAR and its relationship to the Financial Crimes Enforcement Network (FinCEN), U.S. Treasury.

I. Statutory and Regulatory Provisions

The legislative framework generally referred to as the Bank Secrecy Act (BSA) consists of the Currency and Foreign Transactions Reporting Act of 1970, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (USA PATRIOT Act), Public Law 107–56 (October 26, 2001), and other legislation, including the Anti-Money Laundering Act of 2020 (AML Act).[2] The BSA is codified at 12 U.S.C. 1829b, 12 U.S.C. 1951–1960, and 31 U.S.

Recently enacted legislation termed “CTA” that may affect your tax planning

Recently enacted legislation termed “CTA” may affect your tax planning. The recently enacted legislation is part of the National Defense Authorization Act (NDAA) enacted by Congress on January 1, 2021, through the override of a presidential veto. The NDAA is a series of federal laws primarily sp

Warning to Individuals with Malta Personal Retirements

The IRS has now issued their opinion on their understanding of the meaning of pension fund for purposes of the United States–Malta income tax treaty (Treaty). The competent authorities, CA, have entered into this agreement on December 23, 2021, after becoming aware that U.S. taxpayers with no conn

Potentially abusive use of the US-Malta tax treaty

Some U.S. citizens and residents are relying on an interpretation of the U.S.-Malta Income Tax Treaty (Treaty) to take the position that they may contribute appreciated property tax-free to certain Maltese pension plans and that there are also no tax consequences when the plan sells the assets and distributes proceeds to the U.S. taxpayer. Ordinarily, the gain would be recognized upon disposition of the plan’s assets and distributions of the proceeds. The IRS is evaluating the issue to determine the validity of these arrangements and whether Treaty benefits should be available in such instances and may challenge the associated tax treatment.