You are on page 1of 15

Planning Ahead

U.S. TAXES AND THE GREEN CARD
!"#"$% ' ()#! *)#! ' +"%,,-" ' +(%#!(%.
International
Accounting &
Compliance

International
Accounting &
Compliance
IMPORTANT LEGAL INFORMATION PLEASE READ





LEGAL NOTICE
This piesentation is piepaieu foi geneial guiuance only, anu uoes not constitute the piovision of accounting, legal oi tax
auvice in any mannei, wiitten tax auvice unuei 0.S. Inteinal Revenue Seivice Ciiculai 2Su, oi any piofessional auvice of any
kinu. "uiay Inteinational" oi "uiay" iefeis to uiay CPA, PC (a 0.S. Ceitifieu Public Accounting fiim) anu uiay Inteinational Ltu
(a Bong Kong Limiteu Company).

The infoimation pioviueu in this piesentation shoulu not be a substitute foi consultation with qualifieu piofessionals who
unueistanu youi situation, as it will uiffei fiom otheis. In auuition, when making any tax planning uecisions you shoulu consult
with youi own legal, tax, accounting anu othei piofessional auvisois.

IRS Ciiculai 2Su notice: Tax auvice, if any, incluueu in this communication (incluuing any attachments) is not intenueu oi
wiitten to be useu, anu cannot be useu, by the iecipient foi the puipose of avoiuing penalties that may be imposeu unuei the
0.S. Inteinal Revenue Coue oi by any othei goveinmental tax authoiity.

This piesentation has been pioviueu as a couitesy, anu theiefoie while caie has been executeu in the piepaiation of this
infoimation uiay CPA, PC (0.S.), uiay Inteinational, Ltu. anu all of theii affiliates make no iepiesentations as to its
completeness, accuiacy oi the timeliness of the infoimation anu takes no iesponsibility to upuate this infoimation, such
infoimation is being pioviueu without waiianty of any kinu.

Ç 2u1S uiay CPA, PC anu uiay Inteinational Ltu. with all iights ieseiveu, this uocument shall not be iepiouuceu oi uistiibuteu
without the expiess wiitten peimission of uiay CPA, PC oi uiay Inteinational, Ltu.

Foi moie infoimation about us, please visit us at !!!"#$%&'()*"+,-"
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
International
Accounting &
Compliance
WHO WE ARE
)B@ 3@)C.-"
uiay Inteinational ("uiay") is
an inteinational netwoik of
public accounting anu
consulting fiims baseu in the
0.S., Bong Kong, China anu
Euiope. uiay was staiteu ovei
1u yeais ago in the 0.S. (via its
pieuecessoi) anu took the
foim of uiay Inteinational in
2u1S as the iesult of the
netwoiking of multiple
inuepenuent piactices anu
piofessionals.

uiay pioviues inteinational
accounting anu compliance
solutions in the 0.S., Ameiicas,
Asia anu Euiope. uiay focuses
on 0.S. accounting, tax, anu
goveinmental compliance foi
multinational companies,
investois, 0.S. peisons living
oveiseas anu foieign investois
anu companies investing in oi
moving to the 0.S.

uiay also consults on
compliance with 0.S. laws foi
businesses anu financial
institutions oveiseas such as
the Foieign Coiiupt Piactices
Act (FCPA) anu the Foieign
Account Tax Compliance Act
(FATCA), the IRS 0ffshoie
voluntaiy Bisclosuie
Piogiam, anu the Piogiam foi
Non-Piosecution Agieements
oi Non-Taiget letteis foi
Swiss Banks.

uiay's piincipals, paitneis,
anu employees have seiveu
clients woiluwiue. uiay has
offices in ueneva, Bong Kong,
Seattle, Shanghai anu plans to
open an office in Singapoie in
late 2u1S.

uiay's 0.S. public accounting
fiim (uiay CPA, PC) is
iegisteieu with the 0.S. Public
Company Accounting
0veisight Boaiu anu is a
membei of the Ameiican
Institute of Ceitifieu Public
Accountants anu the Centei
foi Auuit Quality.

Foi moie infoimation about
us, please visit us at:

!!!"#$%&'()*"+,-

International
Accounting &
Compliance
OUR SERVICES
WHAT WE DO
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
AUDIT AND ATTEST SERVICES

INTL. FORENSIC ACCOUNTING

U.S. TAX COMPLIANCE
U.S. FATCA COMPLIANCE

INTL. TAX STRUCTURING

U.S. FCPA COMPLIANCE

International
Accounting &
Compliance
WHAT WE DO
)B@ 3@%1,.1" %@"%+
B0+0 C13% 1)23-.%#1"
%BD., %#D %,,"+, +"@$.1"+ .#,-0 C)@"#+.1 %11)B#,.#!
No single piece of 0.S. legislation will
have a laigei impact on foieign
financial institutions anu
inteimeuiaiies in the next S yeais as
FATCA.

Let us help you assess how this will
impact youi oiganization anu how to
implement a piactical, affoiuable
solution.
In touay's global lanuscape
inteinational tax stiuctuiing anu
planning has nevei been moie
impoitant.

Fiom tiansfei piicing, tieaty
compliance, withholuing
minimization, estate planning anu
uomiciliation, to pie-iesiuency tax
planning uiay is ieauy to help you
navigate this uifficult teiiain.
Wiuespieau globalization biings
incieaseu iisks of coiiupt piactices,
anu coiiesponuingly, an inciease in
FCPA enfoicement, penalties anu
piosecutions.

Let uiay help you piepaie anu
implement appiopiiate contiols to
piotect youi oiganization fiom
violations.
0ui expeiienceu auuitois pioviue
extensive expeiience auuiting public
anu piivate companies in the
uevelopeu anu ueveloping maikets.

Let us put oui extensive expeiience
opeiating in the 0.S., Asia, Euiope anu
the Ameiicas to woik foi you.

0ui foiensic accounting seivices aie
uesigneu to pioviuing vigilance befoie
the fact, ieconstiucting anu tiacing
iecoius aftei the fact, anu piepaiing
foi tiial once the finuings aie maue.

0ui team of expeits aie available foi
woiluwiue engagement.
uiay pioviues extensive 0.S. tax
compliance solutions to clients
woiluwiue. We woik with inuiviuuals,
family offices, investois, financial
institutions, multinational companies
anu uomestic (0.S.) businesses.

Let us guiue you thiough the maze of
complex 0.S. tax compliance.

B0+0 ,%E 1)23-.%#1"
B0+0 C%,1% 1)23-.%#1" .#,-0 ,%E +,@B1,B@.#!
International
Accounting &
Compliance
GEOGRAPHIC AREAS OF EXPERIENCE
WHERE WE WORK
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
@0 1FGHF
IJKLMJ
4NKNG
/NOPOJQJRJ
$MNPGJK
$NGNSTNUJ
B0%0"
BSLNVMOPJG
B+%
BRTHTJW
BVRJMGN
BHJGXJ
1QJX
,TGMOMJ
,TRVNW
,TRVKNGMOPJG
,FHF
,QJMUJGX
,JGSJGMJ
,JMYJG
,JZMVMOPJG
+WRMJ
+YJSMUJGX
+FTPQ *FRNJ
+FTPQ %[RM\J
+]JMG
IMKLJLYN
+TRMGJKN
+TXJG
+FKJUMJ
+MNRRJ -NFGN
+NGNHJU
+YNXNG
+JTXM
%RJLMJ
@TOOMJ
@FKJGMJ
3FRPTHJU
3FUJGX
3QMUM]]MGNO
3NRT
3JRJHTJW
3J]TJ #NY !TMGNJ
3JGJKJ
3JVMOPJG
)KJG
#FRYJW
#FRPQ *FRNJ
#MVJRJHTJ
#MHNRMJ
#MHNR
#NY INJUJGX
#N]JU
#JKMLMJ
2WJGKJR
2FSJKLM^TN
2FGHFUMJ
2FRF\\F
2N_M\F
2JTRMPJGMJ
2JUM
2JUJWOMJ
2JXJHJO\JR
-MLWJ
-MLNRMJ
-NLJGFG
-NOFPQF
-JFO
*WRHWOMOPJG
*NGWJ
`JPJR
*JSJSQOPJG
1JKLFXMJ
aJ]JG
aJKJM\J
.ORJNU
.PJUW
.RNUJGX
.RJ^
.RJG
.GXFGNOMJ
.GXMJ
.\NUJGX
(FGXTRJO
!TWJGJ
!TMGNJ
!TJPNKJUJ
!RNNGUJGX
!RNN\N
!RNJP
bRMPJMG
!QJGJ
!NRKJGW
!JLTG
CR0 !TWJGJ
CRJG\N
CMGUJGX
"PQMF]MJ
"RMPRNJ
"U +JUcJXFR
"HW]P
"\TJXFR D0 @0
1FGHF
DFK0 @N]0
1TLJ
1FUTKLMJ
1FPN Xd.cFMRN
1FOPJ @M\J
1QMGJ
1QMUN
10%0@0
1JGJXJ
*JKNRTG
bTRVMGJ
bRJSMU
bFPOYJGJ
bFUMcMJ
bQTPJG
bNUMSN
bNUJRTO
bJGHUJXNOQ
bJQJKJO
%TOPRJUMJ
%RHNGeGJ
%GHFUJ
%UHNRMJ
%UJOVJ
%[HQJGMOPJG
International
Accounting &
Compliance
NOW WHAT ABOUT TAXES?




I AM GETTING MY GREEN CARD
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4

International
Accounting &
Compliance
WELCOME TO U.S. WORLDWIDE INCOME TAX
0.S. taxpayeis aie iequiieu to iepoit anu pay taxes in the 0.S. on theii woiluwiue income, iegaiuless of
wheie it was eaineu, wheie they liveu anu even if they alieauy paiu taxes to anothei countiy. In geneial
these types of income incluue compensation income, inteiests, uiviuenus, anu othei investment income,
business income, capital gains, iental income anu pension income.

A Lawful Peimanent Resiuent ("LPR") becomes a 0.S. iesiuent anu 0.S. taxpayei when they ieceive theii
alien iegistiation caiu (oi "uieen Caiu") foi immigiation puiposes. Tax iesiuency begins in the yeai, anu in
most cases on the fiist uay, that the LPR is piesent in the 0.S
|1j
, anu the fiist uay of the yeai following the
ieceipt of the uieen Caiu iegaiuless of whethei the LPR evei comes to the 0.S.

Resiuency then continues until (a) the LPR status has been ievokeu oi (b) it has been auministiatively oi
juuicially ueteimineu to have been abanuoneu oi (c) the 0.S. iesiuence status is affecteu by an inteinational
tax tieaty wheieby the LPR is not subject to uouble taxation.

0nce iesiuency has been establisheu it is iiielevant if the LPR iemains piesent in the 0.S. anu they will
iemain subject to all of the same tax iules applicable to 0.S. citizens unless they lose theii LPR status.

///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
!"# %&' ()&*+ ,)& -++( ()+ '+./0'+-+1(* &2 ()+ 3)4*0567 3'+*+15+ (+*(8 (69 '+*0:+154 -64 ;+<01 3'0&' (& '+5+0=01< ()+0' >'++1 ?6':@
International
Accounting &
Compliance





WHAT ARE MY REPORTING OBLIGATIONS?
While the scope of this piesentation is not laige enough to encompass all of the potential iepoiting
obligations of a 0.S. Taxpayei, below you will finu some common examples of iepoiting obligations foi
iesiuent aliens:

! You aie iequiieu to iepoit youi woiluwiue income annually. This incluues income (foi example
uiviuenus, ients, foieign cuiiency gains oi inteiest) that is ieceiveu anu kept offshoie. This is geneially
uone on IRS foim 1u4u 0.S. Inuiviuual Income Tax Retuin.
! You aie iequiieu to iepoit all of youi offshoie financial accounts to the 0niteu States Tieasuiy on an
annual basis if the aggiegate value exceeus $1u,uuu at any time uuiing the yeai. These incluue those
beneficially owneu by you in any way, anu also accounts to which you aie a signatoiy (such as business
anu tiust accounts). This is uone on Tieasuiy Bepaitment Foim TB F 9u-22.1.
! You aie iequiieu to iepoit beneficial owneiship of specifieu foieign financial assets which incluues any
financial account, stock oi secuiities issueu by someone who is not a 0.S. peison, any inteiest in a
foieign entity, any financial instiument oi contiact with an issuei oi counteipaity that is not a 0.S.
peison. This obligation begins when (if filing single oi sepaiately) the foieign financial assets exceeus
(1) $Su,uuu on the last uay of the yeai, oi (2) $7S,uuu on any uay uuiing the tax yeai, foi maiiieu
couples the thiesholu is (1) $1uu,uuu on the last uay of the tax yeai, oi (2) $1Su,uuu on any uay uuiing
the tax yeai
|1j
. This is uone in IRS Foim 89S8, Statement of Specifieu Foieign Financial Assets.
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
!"# A)+'+ 6'+ 6::0(0&167 '+3&'(01< &;70<6(0&1* 61: 2&'+0<1 6**+(* ,)05) '+./0'+ &' :& 1&( '+./0'+ :0*57&*/'+8 */5) 6::0(0&167 :+(607 0* 01 +95+** &2 ()+ *5&3+ &2 ()+ */;B+5( -6((+' &2 ()0*
3'+*+1(6(0&1@
International
Accounting &
Compliance





WHAT ARE THE U.S. TAX RATES?
In the 0.S. tax is imposeu by the Feueial uoveinment, most states anu in some cases local
goveinments. Basic 0.S. feueial income tax iates aie listeu below:

! Inuiviuual income tax iates aie maiginal, in that they inciease as taxable income incieases. Tax
iates begin at 1u% once $8,92S in taxable income is eaineu (foi single anu maiiieu filing
sepaiately taxpayeis, maiiieu fileu jointly amount begins at $17,8Su) anu inciease until they
ieach the highest iate of S9.6% (at appioximately $4uu,uu1 in income foi a single anu maiiieu
filing sepaiately taxpayeis, anu $4Su,uu1 foi maiiieu filing jointly taxpayeis).
! Capital gains (gains fiom the sale of capital assets such as stocks anu investment ieal estate) aie
taxeu baseu on the holuing peiiou of the asset which is solu anu the type of asset. In geneial, if
the asset was helu foi less than one yeai, they aie taxeu at the same iate as income in numbei 1
above. If the asset was helu foi moie than one yeai they aie taxeu at a iate of 1S%. Sales of
collectibles aie taxeu at highei iates.

! 0.S. feueial coipoiate tax iates aie also maiginal anu geneially begin at 1S% anu can be as high
as 4u%.
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
!"# A)+'+ 6'+ 6::0(0&167 '+3&'(01< &;70<6(0&1* 61: 2&'+0<1 6**+(* ,)05) '+./0'+ &' :& 1&( '+./0'+ :0*57&*/'+8 */5) 6::0(0&167 :+(607 0* 01 +95+** &2 ()+ *5&3+ &2 ()+ */;B+5( -6((+' &2 ()0*
3'+*+1(6(0&1@
International
Accounting &
Compliance





WHAT HAPPENS IF I DON’T COMPLY?
Non-compliance with the 0.S. tax laws aie seveie anu can incluue ciiminal liability. While the scope of this
piesentation is not laige enough to encompass all of the potential penalties foi not meeting filing
obligations, heie aie some common penalties that an LPR can face:

• Failuie to file a 0.S. tax ietuin - penalties aie S% of the balance uue plus anu auuitional S% pei month,
up to a maximum of 2S% of the tax uue.
• Failuie to pay taxes when uue - a penalty of .S% of the amount of the unpaiu tax pei month up to a
maximum of 2S%.
• Accuiacy ielateu penalties - If the amounts iepoiteu on an income tax ietuin aie latei aujusteu by the
IRS anu a tax inciease iesults, an auuitional penalty may be assesseu of 2u% - 4u% of the inciease of
the taxes uue in some cases.
• Fiauu penalties - if you fail to file a ietuin oi pay tax uue anu the IRS can uemonstiate fiauu, you can be
liable to penalties that amount to 7S% of the unpaiu tax, anu ciiminal piosecution.
• Taxpayeis who aie shaieholueis of coipoiations which aie contiolleu by 0.S. peisons (contiolleu
foieign coipoiations) aie iequiieu to file anu annual uisclosuie statement. If such foim is not timely
fileu penalties can be assesseu at $1u,uu to $Su,uuu pei foim.
• Failuie to file Statement of Specifieu Foieign Financial Assets - up to $1u,uuu foi failuie to uisclose anu
an auuitional $1u,uuu foi each Su uays of non-filing aftei IRS notice foi a failuie to uisclose; foi a
potential maximum penalty of $6u,uuu; ciiminal penalties many also apply.
• Failuie to uisclose foieign bank anu financial accounts can caiiy (among othei penalties) the gieatei of
$1uu,uuu oi Su% of the account balances, inteiest, anu also ciiminal penalties which may incluue
aiiest anu piosecution (in the case of an LPR likely iemoval¡uepoitation).
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
PENALTIES AND RISKS ARE HIGH





International
Accounting &
Compliance





POTENTIAL CRIMINAL LIABILITY
Possible ciiminal chaiges ielateu to tax ietuins incluue tax evasion (26 0.S.C. § 72u1),
filing a false ietuin (26 0.S.C. § 72u6(1)) anu failuie to file an income tax ietuin (26
0.S.C. § 72uS). Willfully failing to file an FBAR anu willfully filing a false FBAR aie both
violations that aie subject to ciiminal penalties unuei S1 0.S.C. § SS22.

A peison convicteu of tax evasion is subject to a piison teim of up to five yeais anu a
fine of up to $2Su,uuu. Filing a false ietuin subjects a peison to a piison teim of up to
thiee yeais anu a fine of up to $2Su,uuu. A peison who fails to file a tax ietuin is subject
to a piison teim of up to one yeai anu a fine of up to $1uu,uuu. Failing to file an FBAR
subjects a peison to a piison teim of up to ten yeais anu ciiminal penalties of up to
$Suu,uuu.

///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
U.S. TAX AND REPORTING VIOLATIONS CAN CARRY CRIMINAL PENALTIES





International
Accounting &
Compliance
IMPLICATIONS FOR FOREIGN BUSINESS OWNERS
Foieign business owneis aie in a unique position to take auvantage of pie-iesiuency planning to stiuctuie
theii affaiis to ieuuce the tax impact of theii iesiuency uecision. The gieatest oppoitunity foi planning anu
stiuctuiing is piioi to when the foieign business ownei obtains LPR status oi tax iesiuency.

When a foieign business ownei becomes a 0.S. iesiuent, they then become subject to the 0.S. tax system.
This means that uiviuenus, payments foi uiiectoiships anu salaiy payments to the LPR become subject to
0.S. taxation, even in not ieceiveu oi paiu in oi to the 0.S.

Foieign coipoiations owneu by LPRs aie subject to special iepoiting, anu may be subject to the payment of
0.S. taxes.

In extieme cases theie can be ciicumstances when a foieign coipoiation, which is owneu by a 0.S.
taxpayei, can be subject to taxes in the local juiisuiction, also be subject to taxation in the 0.S., anu then
subject to 0.S. taxation to the LPR when uiviuenus aie uistiibuteu, iesulting in tiiple taxation.

Pie-iesiuency planning anu stiuctuiing can have significant implications on how eainings aie taxeu anu in
many cases can uiamatically ieuuce the amount of taxes which woulu otheiwise have been uue without
planning.

///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
International
Accounting &
Compliance
0.S. iesiuency biings with it a complicateu
aiiay of tax anu legal consequences, many of
which aie not obvious oi appaient when
making the uecision to make the 0.S. youi
home.

Any foieign national who anticipates becoming
a 0.S. iesiuent shoulu seek tax counsel piioi to
becoming a 0.S. iesiuent to make suie that the
potential auveise tax consequences aie
auuiesseu in auvance.

uiay's pie-iesiuency planning enables you to
unueistanu the tax consequences of youi
uecision, anu stiuctuie youi affaiis piioi to
becoming a 0.S. taxpayei.
uiay's pie-iesiuency tax planning is
especially impactful foi foieign business
owneis anu those who will still ieceive
foieign income anu maintain foieign assets
aftei becoming a 0.S. iesiuent.

Effective tax planning has the potential to
yielu significant tax savings, paying foi itself
many times ovei.

uiay's pie-iesiuency tax planning begins
with a compiehensive evaluation of youi
situation, specific iecommenuations foi youi
unique situation, anu the cooiuination anu
implementation of the plan.
PRE-RESIDENCY PLANNING
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4
A UNIQUE OPPORTUNITY NOT AFFORDED TO U.S. CITIZENS





International
Accounting &
Compliance
CONTACT US
Website:
www.giayintl.com
E-mail:
infoÇgiayintl.com

Address:
0.S. Inteinational 0ffice
(Banuling 0.S. Tax anu Compliance foi Inteinational Business)

Attn: }eiemy Stobie, CPA, CFE
1u9uu NE 8
th
Stieet
Suite 1uuu
Bellevue, WA 98uu4
Phone:
+ uu1 42S.999.S68S xt 1u
uiay welcomes youi questions, comments anu inquiiies anu woulu like
the oppoitunity to seive you.
///01)23%#4+.,"01)2 ' 1)23%#452%.-01)2 ' 6789 :;< =>? ' ,(.+ +,@"", 987A 1.,4A 1)B#,@4