Timeline of News – Tax Notes on Cryptocurrency2022-02-01T14:09:46-05:00

March 2022

  • Maureen B

Maureen Burgy

March 15th, 2022|

Areas of Expertise US resident taxation US nonresident taxation International organization taxation Certifications/Credentials CPA, licensed in Maryland Education BS, Accounting, Pennsylvania State University Languages Spoken English Senior Tax Specialist Maureen is a CPA and Senior Tax Specialist at The Wolf Group. She is responsible for providing specialized tax services to clients with international concerns, including expatriates, inpatriates, and high-net-worth individuals with global assets, as well as international organization employees and retirees, and entrepreneurs with foreign interests. In this capacity, Maureen assists U.S. citizens, green card holders, and foreign nationals with their individual income tax matters. Before joining The Wolf Group, Maureen worked with public accounting firms in the field of federal consulting and auditing. Maureen also previously worked for a small accounting firm preparing individual income tax returns. Outside of work, Maureen enjoys hiking with her family, playing tennis, gardening, and reading.

  • Form 1065 K1

Why your Schedules K-1 may arrive later than usual this year

March 13th, 2022|

If you typically receive a Schedule K-1 from a partnership or S corporation, you may receive it later than usual this year. The IRS has created two new forms, Schedules K-2 and K-3, that many partnerships and S corporations must file this year at the same time that they produce their Schedules K-1. The new filing requirements are delaying their ability to file their business tax returns and to issue Schedules K-1 to partners and shareholders. The delays are taking place for multiple reasons: The IRS announced in 2021 that these forms would not be ready until at least late March 2022 at the earliest and that many businesses and entities would need to file an extension for their returns. The new forms are 14 to 20 pages each, so they require much more detail than businesses previously provided. The guidance on the forms continues to evolve. The IRS released Frequently Asked Questions on Schedules K-2 and K-3 in mid-February 2022, which clarified that the filing requirements apply to far more businesses than originally expected. Furthermore, the IRS is working to address ongoing questions and pushback from businesses and tax practitioners on these new forms. The forms carry severe penalties for failure to file or incomplete filing. The penalties apply both at the entity level and at the individual partner or shareholder level. The IRS and tax software providers are still programming the technology to allow businesses and individuals to e-file these forms. To learn more about the new Schedule K-2 and K-3 requirements, whether they apply to you, and how they may affect the timing of your returns, check out our Frequently Asked Questions (FAQs): FAQs for individuals waiting on K-1s FAQs for individuals filing Form 8865, to report an interest in a foreign partnership FAQs for partnerships filing Form 1065, Partnership Tax Return FAQs for S corporations filing Form 1120-S, S Corporation Tax Return We expect that the IRS’s requirements and guidance will continue to evolve over the coming weeks. At The Wolf Group, we are monitoring these developments and continuing to evaluate the approaches that are in the best interest of our clients. If you have questions on the new Schedules K-2 and K-3 or need assistance complying with the additional foreign reporting, please contact us. The Wolf Group has assisted clients with foreign disclosures and related tax form preparation for nearly four decades. Pursuant to Circular 230, promulgated by the Internal Revenue Service, any US tax advice contained in the body of this writing is not intended or written to be used, and cannot and should not be used, by any recipients as specific tax advice related to their facts and circumstances. Taxpayers should consult their local tax professional and/or attorney to obtain specific tax advice related to their facts and circumstances.

New Schedules K-2 & K-3 – FAQs for Individuals Who Receive K-1s

March 4th, 2022|

Will the new Schedule K-2 and K-3 filing requirements affect me? Although these new requirements mostly affect certain partnerships and S corporations, they may affect you if you are: An individual who receives a Schedule K-1 from a partnership or S corporation. In this case, you may not receive your K-1 (and new K-3, if applicable) until later than usual. This could delay your individual tax return filings. An individual who typically files Form 8865 as part of your individual income tax return to report ownership in a foreign partnership. If you file Form 8865, you are required to include the new schedules with your returns this year. See our Frequently Asked Questions for filers of Form 8865. What are Schedules K-2 and K-3? Schedule K-2 is a new 14- to 19-page form with up to 11 sections. It is filed as part of the partnership or S corporation tax return. It reports items of international tax relevance from the operation of the business. Since this form gets filed as part of the business return, you won’t see a copy unless you see the complete business tax returns. Schedule K-3 is a 15- to 20-page form with up to 13 sections. It is basically an expansion of Schedule K-1 to provide greater detail to you on your share of the business’s international tax items. It is needed for the preparation of your individual income tax returns. This schedule is provided to both you and the IRS, and it reports your share of income, deductions, credit, and international informational reporting items. It may also include data needed for you to file certain international informational forms (such as Forms 5471, 8858, 926, 8621, and 8992) as part of your Form 1040, Individual Income Tax Return. Many of these forms have a $10,000 penalty for failure to file. Even if the partnership or S corporation does not have foreign income or foreign assets, it may still need to file Schedules K-2 and K-3, which could delay your individual tax filings. Why is the IRS requiring these? Formerly, Schedule K (on the business tax return) and Schedule K-1 (issued to you) did not require any specific format to provide international information. As a result, many details needed for the accurate preparation of your individual income tax returns were either lumped together on a few lines of Schedule K-1 or missing altogether. Plus, information on international informational filing requirements (such as IRS Forms 5471, 926, 8992, 8865, and 8621, which carry large penalties) was often referenced in a footnote with unintelligible details and a caveat to “see your tax preparer.” Per the IRS, this resulted “…in what could be a confusing array of statements attached to the schedules K and K-1. The new schedules K-2 and K-3 provide greater certainty and consistency, helping partners and shareholders to voluntarily comply with their filing and reporting obligations.” Now, the IRS is requiring the more detailed Schedules K-2 and K-3 to provide this clarity, and it is motivating [...]

The New FinCEN Beneficial Ownership Disclosures: What You Need To Know

March 1st, 2022|

The US Government is seeking to increase transparency around the “true” beneficial owners of U.S. entities or entities doing business in the US. In particular, the US wants to: Cut through all the layers of company ownership to identify the individuals or companies that ultimately own or control the company, and Determine whether any of them are foreign individuals or foreign entities. As a result, beginning in 2022, the US will require entities to file a new informational form to disclose their “beneficial owners.” Here is what you need to know regarding the new mandatory filings. Which owners are being targeted by the new disclosure requirements? The new disclosure requirements specifically seek to obtain information on beneficial owners who are: Non-resident aliens (including individuals living inside the US on tax-exempt visas, such as A, F, G, J, and M visa holders), or Foreign entities. “Beneficial owners” are those who “directly or indirectly, through any contract, arrangement, understand, relationship, or otherwise” (1) exercise substantial control over the entity, or (2) own or control at least 25% of the entity. Beneficial ownership information does not need to be provided for US tax residents, such as individuals who meet the Substantial Presence Test for residency, green card holders, and US citizens. Who needs to file the new beneficial ownership information forms? Certain types of entities (see below) must file the new forms to disclose details on any beneficial owners who are foreign individuals or foreign entities. Since many of the entities in question are small businesses or LLCs, this means that it will fall to the owners themselves to do the filings. For what types of entities must ownership information be provided? US entities, including Corporations LLCs LPs, LLPs, LLLPs Business trusts Other “similar entities” created by filing a document with a US state Foreign entities that have filed and registered to do business in the US, including Corporations LLCs Limited and limited liability partnerships Trusts Other “similar entities” formed under the laws of a foreign country The new requirements affect not only small businesses but also: LLCs and other US entities created solely to hold property or other assets LLCs and other entities that hold rental properties LLCs and other entities created to conduct consulting work or small business activities Are there any exceptions? Yes, the proposed regulations include 23 different exceptions. If an entity meets one of those exceptions, the new forms need not be filed to disclose ownership. The two primary exceptions are: Exempt organizations (non-profits) that fall under Internal Revenue Code §501(c), and Large operating companies with more than 20 employees, with gross receipts over $5 million, and a physical presence in the US What information must be reported on the new forms? Three types of information must be reported: Information on the entity itself, including Official name and trade names Address information Jurisdiction where the entity was formed Unique identifier numbers Information on beneficial owners, including Legal name Date of birth Address information Unique identifying numbers from acceptable [...]

Why the US is the 2nd Largest Tax Haven in the World

March 1st, 2022|

For years, the IRS has complained about “tax havens” like Switzerland whose secrecy laws have enabled wealthy US citizens to hide assets offshore and (illegally) shelter their foreign income from US taxation. Since 2009, the US has made great strides in chipping away at these barriers to find out what Americans have been hiding. Meanwhile, the US hasn’t been so transparent at home. It turns out that the US itself is one of the most secretive tax havens in the world. Foreign investors and private citizens can easily set up companies in the US without having to disclose the true “beneficial owners” of those companies. In many US states, less information is required to form a new company than is required to obtain a bank account or even a driver’s license. As a result, many non-US individuals, businesses, and trusts open “businesses” in the US, often in the form of US limited liability companies (LLCs). Because the true “beneficial owners” of these companies are not disclosed, foreign actors can hide behind these structures and use them to conceal income and assets from their home governments. They ultimately route substantial amounts of money through the companies to avoid paying tax in their home countries. And the use of US tax havens has been growing. On October 3, 2021, the International Consortium of Investigative Journalists (ICIJ) reported on the “Pandora Papers,” nearly 12 million leaked documents that disclose the confidential use of offshore tax havens by celebrities, wealthy citizens of numerous countries, and prominent global political figures. In its report, the ICIJ pointed out that use of US tax havens has grown while remaining somewhat under the radar: “Over the past decade, South Dakota, Nevada and more than a dozen other U.S. states have transformed themselves into leaders in the business of peddling financial secrecy. Meanwhile, most of the policy and law enforcement efforts of the world’s most powerful nations have stayed focused on ‘traditional’ offshore havens, such as the Bahamas, the Caymans, and other island paradises.” It’s easy to understand how foreign countries would be upset by the double standard concerning the US’s lack of transparency. In the last two rankings of “financial secrecy” by the FACT Coalition and Tax Justice Network, the US has been 2nd in the world (after Switzerland in 2018 and after the Cayman Islands in 2020). “This is not a ranking in which the US wants to be number one or even number two,” according to Gary Kalman, Executive Director of the FACT Coalition from 2016 to 2019. Despite the US being a member of the international anti-money laundering “Financial Action Task Force on Money Laundering (FATF)” for more than a decade, the US has made little progress in improving its transparency. The ICIJ points out that “the US is the country best situated to bring an end to offshore financial abuses,” but it has shown little interest in doing so: “The U.S. has refused to join a 2014 agreement supported by more than 100 jurisdictions, [...]

February 2022

Yujie Deng

February 7th, 2022|

Areas of Expertise US resident taxation US nonresident taxation International organization taxation US payroll and business tax Certifications/Credentials CPA, licensed in Maryland Education Master of Accounting, University of Maryland BS, Accounting, Pennsylvania State University Languages Spoken English Mandarin Senior Tax Specialist Yujie is a CPA and Senior Tax Specialist on The Wolf Group team responsible for providing specialized tax services to clients with international concerns, including expatriates, inpatriates, and high-net-worth individuals with global assets, as well as international organization employees and retirees, and entrepreneurs with foreign interests. In this capacity, Yujie assists U.S. citizens, green card holders, and foreign nationals with their individual income tax matters. Before joining The Wolf Group, Yujie worked in both corporate accounting and public accounting. She prepared individual and business tax returns, resolved tax notices with the IRS, fulfilled internal accounting functions, and handled payroll filings and other tax compliance matters. While at the University of Maryland, she co-led the Volunteer Income Tax Assistance program to provide tax preparation support to those in need.

Tomi Dreni

February 7th, 2022|

Areas of Expertise US resident taxation US nonresident taxation International organization taxation Financial analysis and bookkeeping Education AAS, Accounting, US MBA & Master of Finance, Korce, Albania BS, Marketing, Korce, Albania Languages Spoken English Albanian Italian Senior Tax Specialist Tomi is a  Senior Tax Specialist on The Wolf Group team responsible for providing specialized tax services to clients with international concerns, including expatriates, inpatriates, and high-net-worth individuals with global assets, as well as international organization employees and retirees, and entrepreneurs with foreign interests. In this capacity, Tomi assists U.S. citizens, green card holders, and foreign nationals with their individual income tax matters. Tomi has 15 years of experience in the financial services industry. Before joining The Wolf Group, Tomi held positions in finance, accounting, business administration, and marketing, in the US and Albania. He previously worked in public accounting in Albania, preparing tax returns, drafting financial statements, performing bookkeeping services, and corresponding with the tax authorities to resolve tax matters.

Thao Dao

February 7th, 2022|

Areas of Expertise US resident and expatriate taxation US nonresident taxation International organization taxation IRS Amnesty programs, including Streamlined Filings Certifications/ Credentials CPA, licensed in Maryland and Virginia Education BS, Accounting, University of Maryland BA, Economics, University of Maryland Languages Spoken English Vietnamese  Tax Supervisor Thao is a CPA and Tax Supervisor on The Wolf Group team responsible for providing specialized tax services to clients with international concerns, including expatriates, inpatriates, and high-net-worth individuals with global assets, as well as international organization employees and retirees, and entrepreneurs with foreign interests. In this capacity, Thao assists U.S. citizens, green card holders, and foreign nationals with their individual income tax matters. She also assists clients in filing amended tax returns under IRS Amnesty programs, such as the IRS Streamlined Foreign and Domestic Filing Procedures. Before joining The Wolf Group, Thao interned at a public accounting firm, researching US tax laws for businesses and individuals, as well as assisting clients in resolving tax notices with the IRS. While at the University of Maryland, she participated in the Volunteer Income Tax Assistance program to provide tax preparation support to those in need. Outside of work, Thao enjoys traveling, baking, and playing with her dog. Thao is a big foodie and she will travel great distances for food.

Sachini Amarasinghe

February 7th, 2022|

Areas of Expertise US resident taxation US nonresident taxation International organization taxation Education BS, Accounting, George Mason University Languages Spoken English Sinhala Tax Specialist Sachini is a Tax Specialist on The Wolf Group team responsible for providing specialized tax services to clients with international concerns, including expatriates, inpatriates, and high-net-worth individuals with global assets, as well as international organization employees and retirees, and entrepreneurs with foreign interests. In this capacity, Sachini assists U.S. citizens, green card holders, and foreign nationals with their individual income tax matters. Before joining The Wolf Group, Sachini studied business, accounting, and finance and taught finance to undergraduate students.

January 2022

December 2021

November 2021

2020

November 22nd, 2021|

The Firm moves into new offices in Fairfax, VA, setting the stage for future growth.

2019

November 22nd, 2021|

Jen Marenberg becomes a shareholder of The Wolf Group, P.C. Mishkin Santa is appointed Secretary of the Society of Tax and Estate Planners (STEP) Mid-Atlantic region. The Firm is engaged as “of counsel” equivalent to provide international/expatriate tax support to dozens of CPA and law firms in the U.S. and abroad. Mishkin Santa visits, and speaks at, NEXIA International firms across Australia.

2018

November 22nd, 2021|

Mishkin Santa becomes a shareholder of The Wolf Group, P.C. Mishkin Santa visits, and gives more than a dozen presentations speaks at, NEXIA International firms across Australia.

2017

November 22nd, 2021|

The Firm launches its blog, Cross-Border Tax Matters, to share insights on the international tax implications of popular (e.g., sports, celebrity) news stories and on new developments in the tax world. Len Wolf authors a chapter in “The Diplomatic Handbook” published by the American Immigration Attorneys Association (AILA), entitled “Income Taxation of G-IV and A Visa Holders.” The Firm launches its cryptocurrency tax practice.

2016

November 22nd, 2021|

Mishkin Santa joins the firm as International Tax Director. The Wolf Group is invited to present at the United Nations headquarters on International Organization tax matters and establishes an office presence in New York City.

2014

November 22nd, 2021|

The Firm is invited to present to the Florida Institute of CPAs/Florida Bar Association combined International Tax Conference in Miami, Florida, attended by 2,000 delegates from around the world.

2013

November 22nd, 2021|

Jen Marenberg joins the firm as a senior expatriate tax consultant. Her role in the Firm grows over the years, and she becomes an income partner 4 years later.

2012

November 22nd, 2021|

The Wolf Group wins the Nexia “Firm of the Year Award,” chosen from more than 200 CPA firms around the world. The Firm also publishes a “Guide to the U.S. Taxation” for several International Organizations’ credit unions and publishes white papers on topics including “Fundamental Financial Planning and Investment Strategies for Foreign Nationals Living in the U.S.” and “Fundamental Financial Planning and Investment Strategies for U.S. Persons Living Overseas.” The Firm sponsors a 5K Walk for Hope benefiting Access Hope, a non-profit organization dedicated to enhancing access to mental health services by underserved populations.

2011

November 22nd, 2021|

Len Wolf appears on the radio show, Blueprint for Wealth, and The Wolf Group chairs NEXIA International’s Global Mobility Tax Services specialty group, leading the Nexia Global Mobility Tax Forum in Paris.

2010

November 22nd, 2021|

The Wolf Group publishes its first internally written and published quarterly newsletter, Global Insights.

2009

November 22nd, 2021|

The Firm is renamed The Wolf Group, P.C. With the merger of SCI International and NEXIA International, Len Wolf is named Co-chair of the International Tax Committee and Bob Len is appointed as a Regional Chairman (Western Hemisphere) of the combined entity.

2004

November 22nd, 2021|

TWG initiates a secondment program with other NEXIA International firms around the world, in which professional staff are exchanged for 6-week periods. Professional staff exchanges ensue with top quality firms in the UK, France, Germany, Singapore, Australia, and other countries.

2003

November 22nd, 2021|

The Firm launches its first internship program, the first of many initiatives over the decades to expose undergraduate students to international tax matters.

2002

November 22nd, 2021|

Our Firm joins SCI International, which later merges with Nexia International, the 9th largest accounting network in the world, according to the latest IAB World Survey. Len Wolf visits over a dozen SCI International member firms abroad.

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