-“There's no time like the present.”

Saying (English)

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The reality:

International information and tax reporting can seem like a bottomless pit. There is little room for error, and meeting all requirements, with respect to both foreign assets and transactions, can become an intricate and stressful exercise. Oversights can weigh taxpayers down, threatening them with severe penalties. If you're in this category, you need an immediate plan of action. Depending on the facts, certain steps could ease your burden, perhaps substantially, and minimize your penalty exposure.

Predictably, some cite reporting complexity to rationalize keeping their activities, both in business and investment, exclusively domestic. Indeed, U.S. persons can resort to an ever-growing list of excuses to look inward, confining their assets, transactions, and operations to this country. However, in the final analysis, the opportunity costs of this approach can be steep.

To be sure, taxpayers must confront challenging questions: (1) the “when,” (2) the “where,” (3) the “why,” and (4) the “how.”

The response:

The firm aims to overcome compliance threats, streamline and restructure information systems (for more efficient compliance), and meticulously design plans for client objectives. Trey M. Bruce, Esq., CPA, LL.M. (Tax), CFE, and AICPA Elijah Watt Sells Award recipient (2015) can help. Through the firm, he works one-on-one with clients, without associate or assistant delegation, and relentlessly strives (i) for cost-effectiveness, (ii) for compliance-focused results, addressing key engagement subtleties, and (iii) for managed and relatively predictable tax consequences. To learn more about the firm's “Business” approach in tax, franchise, and fraud investigation, visit About the Firm.

While drawing on experience with foreign assets, foreign fiduciary officers, international information reporting, and the like, Trey also harnesses experience outside the international tax and reporting domain. That is, he embraces such experience and seeks to channel it, as applicable, to expand his “issue spotting,” particularly when inspecting for hidden or “buried” threats to client objectives. By doing so, he believes he can offer more substantive and client-attentive solutions. Such experience includes, for instance, performing forensic accounting engagements; representing taxpayers on IRS audit; issuing varying “tax opinion” levels on sensitive matters; representing clients in civil, bankruptcy, and probate proceedings; preparing entity and individual returns; auditing and preparing financial statements; drafting transactional documentation; and so forth. Cumulatively, Trey regards these experiences as invaluable to his discipline and ability to identify, and then monitor, opportunities and threats.

Outbound International Tax

Engagement objectives in planning, consulting, and/or compliance may include the following:

• Subpart F: managing implications and key determinants of Subpart F income and GILTI; integrating QBAI, tested income effects, and other GILTI variables into decision-making models; assessing benefits of individual § 962 elections; etc.

• PFICs: monitoring PFIC status and planning steps to avoid key thresholds; identifying favorable opportunities in passive income and asset testing; understanding “look-through” implications; securing an optimal election available (when necessary), etc.

• Foreign tax credit: optimizing conditions to maximize credit; responding to expected “basket” limitations, including those complicated by “look-thru” rules; monitoring (fluid) criteria on creditable taxes and planning based on the same; developing procedures for commonly overlooked complexities; etc.

• U.S. citizens or residents overseas: understanding exemptions and potential tradeoffs for a specific taxpayer; simplifying and coordinating compliance responsibilities; securing benefits under totalization agreements relating to social security taxes (when available); planning for, and protecting against, potential “tax home” and other challenges; etc.

• Foreign currency matters: applying “qualified business unit” definition and addressing its implications; identifying efficiencies in tax and financial reporting workflows; effecting functional currency changes; avoiding missteps in translation rules; etc.

• Outbound property transfers: weighing benefits and costs, including lost opportunities (e.g., applicable FDII deduction, etc.); planning for gain recognition and its timing; designing procedures to meet special conditions (e.g., “gain deferral method” for certain appreciated property to section 721(c) partnerships, etc.); accounting for post-disposition events and relationships with intangibles, etc.

International Information Reporting

These engagements may call for the following procedures:

• Streamlined filing compliance procedures (SFCP): seeking multipronged resolution and compromise for previously undisclosed foreign financial assets. Learn more about the firm's scope of services in tax engagements.

• Alternatives to SFCP: helping taxpayers with narrower compliance procedures (not requiring SFCP), such as submitting delinquent FBARs and international information returns, etc.

• Form 3520 series: an area Trey particularly enjoys, properly memorializing U.S. agent appointments; working with fiduciaries overseas; promoting and safeguarding the information flow among “owners,” non-owner beneficiaries, and fiduciaries; etc. See also Family planning and the "inactive" foreign trust, Part I and Part II .

• Form 8938: accounting for subtleties in reporting thresholds; identifying exceptions to simplify taxpayer responsibilities; resolving valuation headaches; limiting the extent of duplicative reporting; etc. See also Foreign Assets: The girlfriend and the joint account, Part II.

• Other reporting complications: guiding taxpayers through areas of concern in foreign disregarded entity and foreign branch reporting; shareholder reporting relating to CFCs and PFICs; certain partner reporting on foreign partnerships; etc.

Here's a question: have you engaged professionals and received “feel good” deliverables—superficially reassuring—only to later discover, on audit or otherwise, a tortured web of unidentified issues, unsupported assumptions, or reckless and inexplicable “plugs”? If so, did you reach back out to the original firm to ask what happened? Was it responsive?

Since 2019, this firm has, on a number of occasions, effectively inherited "mini crises" that arose from these types of problems. One lesson learned is not exactly a breakthrough: clients often do themselves a disservice by not pressing their professionals, particularly during the engagement, to address all relevant questions and issues. Trey believes this general lesson is especially applicable in matters tied to foreign-asset reporting and outbound international tax. Often, the stakes are simply much higher. If you have a gut feeling that your planning, preparation or compliance deliverable may be “window dressing,” don't sit silently. Speak up. 

If you believe this firm may be a good fit for you, consider reaching out. Ask Trey difficult questions: technical, administrative, or otherwise. Evaluate and compare the expected value, cost, and personalized service relative to other firms. And by all means, feel confident in your professional(s) before moving forward, whether from this firm or any other. Nothing can substitute for one-one-one dialogue with, and transparency from, the professional conducting (and not merely supervising) critical engagement matters.