Welcome to the Law Office of Alexey Manasuev
IRS Woes? Or just hoping to avoid them?
You’ve come to the right place. If you’re a US citizen or Green Card holder, living outside the United States, chances are you’ve had difficulty understanding how US tax rules operate and how they might apply to your situation.
You’ve also likely had concerns about your compliance with US tax law at some point. Your fears are not unwarranted. The IRS imposes tough, and sometimes unbending, penalties on those who aren’t compliant… and falling out of compliance is remarkably easy – even when you think you’re taking all the right steps. For those who don’t know what to do or choose to ignore the reality, penalties are equally high.
There is no shortage of situations where a bad decision led to negative consequences and unnecessary expenses for taxpayers. And this includes situations outside the taxpayer’s competence, as well as simply doing nothing, or ignoring the issue. So in protecting yourself, finding a qualified US tax professional with adequate cross-border tax expertise and experience is a great place to start! How to choose a qualified US tax advisor.
“Risk comes from not knowing what you’re doing.” Warren Buffett
That’s where we come in. Knowing the facts, and how to safely and efficiently navigate the system, can make the difference between making the right or wrong choice, compliance and non-compliance… and some hefty penalties. Alexey Manasuev, LL. M. (Int’l Tax), NYU, specializes in U.S. tax law. And with over 14 years’ experience practicing in this field, he’s seen some precarious situations – and come to the rescue of many clients.
“Knowledge is Power”[i]
Retaining the services of an expert in U.S. tax law isn’t a frivolous move. Take the situation a small business owner and client, found himself in recently. Eager to save some money on US tax advice, and believing that the US tax system is similar to Canada, he retained the services of a Canadian accountant to file his U.S. taxes.
It is common, at least in Canada, for some Canadian tax accountants to do US tax work. This well-meaning professional used his Canadian tax expertise, and his previous experience of preparing and filing US tax returns. He then advised the client that no tax return was required – after all, the client was losing money, not making it, and there was “nothing” to report. The Canadian tax accountant also missed a few important IRS filings that had to be done for the client, given certain transactions the client’s US subsidiary had with its Canadian parent company. Having received the advice, the client went about his business, only to find out later that he was non-compliant.
The IRS levied stiff penalties amounting to tens of thousands of dollars. The client was “advised” of the penalties by the IRS, via a penalty assessment notice – imagine the shock, when he believed himself to be compliant! Even worse, the client tried to resolve the problem himself! For more than a year, the client has been corresponding with the IRS, and, unknown to him, this has significantly limited options available to him to resolve his problems. Usually, self-help in these circumstances is not the best way to go. Fortunately, Alexey Manasuev was able to help.
Compliance is no longer an option
For those living and working in foreign countries, it is almost a given that they must report and pay tax where they live. But they also continue to be required to file tax returns in the United States - one of only three countries in the world that taxes its citizens and residents on a worldwide basis. What’s more, U.S. reporting is based on US persons’ worldwide income, even though they are paying taxes in the country in which they live.
[ii] And of note for those in Canada, in February, 2014, Canada and the U.S. signed a Model I Intergovernmental Agreement (“IGA”) under Foreign Account Tax Compliance Act (“FATCA”) to ensure that they work jointly to prevent tax evasion by significantly enhancing their information exchange and collection efforts,[iii] making voluntary compliance a smart move for everyone.