Do You have a Foreign Bank Account?
If so, you may be required to report to the Department of Treasury. The Law: Any United States person who has a financial interest in or signature authority, or other authority over any financial account(s) in a foreign country is required to file a Report of Foreign Bank and Financial Accounts (FBAR), if the aggregate value of these accounts exceeds $10,000 at any time during the calendar year.
If you have any questions about how to comply with the reporting requirements for foreign bank accounts, please contact our office.
New IRS Rules for Tax Professionals
The IRS has issued new rules that will affect how we communicate tax advice with you. The new rules, which took effect June 21, 2005, apply whenever a practitioner provides written advice, including e-mails, faxes, and letters, on tax issues. While the rules are motivated by the government’s concern with abusive tax shelters, they will apply to advice given on many common and accepted tax issues and transactions.
Under the new IRS rules, clients cannot rely on a tax opinion for protection from penalties unless the practitioner provides a comprehensive tax opinion that considers and discusses:
- All relevant facts and applicable law,
- The relationship between the facts and the law,
- A conclusion as to the legal consequences of each tax issue, and
- The likelihood that the taxpayer will prevail if the IRS challenges the transaction.
An alternative to writing a comprehensive opinion is to include a disclaimer on written advice furnished to the client. This disclaimer will state that the client cannot rely on the opinion for protection from tax penalties. Accordingly, effective January 1, 2006, Shaw Mumford & Co., P.C. will include the following language in all written communications. Shaw Mumford & Co., P.C. will also issue all tax advice in written form.
“Unless otherwise noted, any federal tax advice in this communication (including any attachments, enclosures, or other accompanying materials) was not intended or written to be used, and it cannot be used, by any taxpayer for the purpose of avoiding penalties that may be imposed.”
Please be assured that we will continue to act diligently to meet your tax planning and compliance needs. The use of this legend does not change the quality of our service and the advice you have come to expect from us. In appropriate cases, after consultation with you, we will provide a comprehensive opinion that meets the new rules.
If you have any questions about this important development, or other tax issues, please feel free to contact us.