Statutes of Limitations & Tax Compliance: Are You Really Ready to File? | Ask An Expert with Virginia La Torre Jeker

“The IRS can go back over 20 years in certain instances for unfiled returns. We’re not making this stuff up,” warns Virginia La Torre Jeker, a seasoned US international tax attorney with over 40 years of experience and returning guest to the show. Virginia is a member of the New York Bar, specializing in all aspects of international tax and cross-border transactions. In this week’s Ask An Expert, host and founder of Plan First Wealth Richard Taylor talks to Virginia about the best ways to navigate the complexities of US taxation for expats. Do you know what it means for a tax return to be ‘open’? If you don’t, you should. You’ll learn about:

Tax statutes of limitations and their implications on cross-border taxpayers.
The consequences of missing forms and how it may leave tax returns perpetually open for IRS examination.
Denaturalization and its potential tax implications.
The importance of accurately filing foreign information returns and how failing to do so can result in penalties.
Virginia and Richard stress the importance of informed decision-making in tax filings. Whether you’re an expat, an immigrant to the US, or assisting international families, this episode is a fundamental listen to help you thrive financially and secure your retirement.

If you’re enjoying the show, please consider leaving a 5 star rating and review to help the mission, which is to help expats and immigrants thrive in America. Visit planfirstwealth.com to learn more about our services and connect with Richard Taylor on LinkedIn.

We’re the Brits in America is affiliated with Plan First Wealth LLC, an SEC-registered investment advisor. The views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views or positions of Plan First Wealth.

Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Plan First Wealth does not provide any tax and/or legal advice and strongly recommends that listeners seek their own advice in these areas.

About Richard

Richard Taylor is a British expat, dual citizen (UK & US). Originally from Bolton, he now lives in Greenwich, CT, where Plan First Wealth has its head office.

As the firm’s leader, Richard launched Taylor & Taylor, now Plan First Wealth, and continues to fuel the firm’s growth. Richard is a Chartered Financial Planner (UK – CII) in addition to holding the IMC (CFA UK) and Series 65 (US – FINRA).

Connect with Richard on LinkedIn

TRANSCRIPT:

Richard Taylor, Founder Plan First Wealth:
[00:00:43 – 00:01:25]
Welcome to the we’re the Brits in America Podcast, a Plan First Wealth podcast dedicated to helping ambitious expatriates and first generation immigrants thrive in America. I’m your host Richard Taylor, and Plan First Wealth is the business I founded and run today and we work with successful American and international families living across the US Helping them to make the most their opportunity living and working in America. However, while Plan First Wealth LLC is an SEC Registered Investment Advisor, the views and opinions expressed in this program are those of the speakers and do not necessarily reflect the views and positions of Plan First Wealth. Information presented is for educational purposes only. Alright, let’s get back to this week’s show.

Richard Taylor, Founder Plan First Wealth:
[00:01:27 – 00:02:27]
Welcome to our Ask an Expert show where I invite a fellow professional in the cross border space to come in and talk to me about the issues we think expats and immigrants in America need to be aware of if they are going to thrive here. My guest today is the returning champ, Virginia La Torre Jeker. Virginia is a US International Tax attorney and a member of the New York Bar since 1984 and admitted to practice before the U.S. tax Court and she has oodles of experience dealing with all aspects of international tax and cross border transactions. This is Virginia’s third appearance on the podcast. If you want to go back and take a Listen, there’s episode 37 when we discuss IRS penalty abatement, and episode 45 where we discuss leaving the US but this time we’re going to be talking about tax and the statute of limitations, specifically how missing any of the required forms for non US assets not only leaves taxpayers open to staggering penalties, but also creates statute of limitation issues that could leave one’s entire tax return open for attack forever.

Richard Taylor, Founder Plan First Wealth:
[00:02:27 – 00:02:34]
And it happens, folks, they go back. So without further ado, let’s get into this. Hi Virginia, welcome back to we’re the Brits in America.

Virginia Jeker:
[00:02:35 – 00:02:49]
Hi Richard, Good to be back. I’m always looking forward to our chats together because I think we give your listeners a lot of very important information and things they might not otherwise know about. So I’m happy to be here.

Richard Taylor, Founder Plan First Wealth:
[00:02:50 – 00:03:06]
Forgive me for saying this, I’m starting to see our our conversations almost as an extension of your blog. They’re not that nothing, nothing replaces your blog. Your blog is a treasure trove of information, but they are a way for me of taking this information and trying to get it out to a wider audience.

Virginia Jeker:
[00:03:06 – 00:03:35]
Yes, well, I’m pleased that you read the blog as much as you do. I know that you’ve told me that before and you actually click on all the hyperlinks and you get into, you know, the detail, the nitty gritty. And honestly, I think you’re one of the few people that do that who are in your industry. So I’m, I’m very pleased that you’re into the blog the way you are, and hopefully others will start to look at it because it is, I believe it really is a treasure trove of information.

Richard Taylor, Founder Plan First Wealth:
[00:03:37 – 00:03:58]
I find tax equally engrossing and horrifying. It’s like a, it’s like a jigsaw puzzle. And we just talking a minute ago, it can be like a maze. And being in a maze can be a lot of fun. But sometimes the repercussions and the stakes of not, of not finding your way through the maze or accidentally taking a wrong turn are bewildering.

Richard Taylor, Founder Plan First Wealth:
[00:03:59 – 00:04:08]
And some of the obstacles that have been put in the maze are so draconian and unnecessary that it can be quite distressing. This is absolutely quite a metaphor.

Virginia Jeker:
[00:04:09 – 00:04:33]
Absolutely. And I mean, Richard, I’ve been doing this for over 40 years, and honestly, certain things come up that still surprise me and take me, like, taking a deep breath. Can that really be. And I’ll just quickly mention one of them because I just recently posted this one on the blog. It was also an article in Forbes that I wrote.

Virginia Jeker:
[00:04:34 – 00:04:53]
It had to do with when someone, as you know, the Trump administration is now very gung ho on denaturalization and stripping people of their U.S. citizenship. People are scared. You know, what did they ever put on their naturalization forms? Did they make a mistake? Did they withhold something?

Virginia Jeker:
[00:04:53 – 00:05:08]
Were they not truthful? And all of these things can cause, unfortunately, a loss of US Citizenship. Not automatically. It’s got to go through the courts and so forth. But the point is, it’s happening and people are scared.

Virginia Jeker:
[00:05:09 – 00:05:46]
And one thing I was curious about was whether if someone is stripped of their citizenship, can this expatriation tax regime apply to them? You know, the exit tax and the 2801 transfer taxes on recipients of gifts or bequests, US recipients of gifts or bequests from that covered expatriate. And indeed, I found in the law, yes, it can apply. And this really surprised me because I didn’t think that someone who would be stripped of their citizenship involuntarily would have that tax regime applied to them, but it certainly does.

Richard Taylor, Founder Plan First Wealth:
[00:05:47 – 00:06:04]
Virginia, a few things. For anyone listening to this wondering what we’re talking about, I urge you to go back to episode 45 where we talk about leaving the US where we we’re talking about this, the exit tax, VA just. I thought if you were denaturalized, you went back to your previous state, previous immigration status, which would be green card.

Virginia Jeker:
[00:06:04 – 00:06:13]
So yes, can be, can be. But I think this leads you to revocation of the green card.

Richard Taylor, Founder Plan First Wealth:
[00:06:13 – 00:06:13]
Oh, wow.

Virginia Jeker:
[00:06:13 – 00:06:57]
Yeah. Because I think so much will depend, and I’m not an immigration lawyer, but I think if you have not been truthful on your documentation, that pretty much that’s going to be. It could be a death knell for you. And I think if you were not truthful on the naturalization papers, if you revert to the green card stuff, I don’t think that that’s going to stop them from revoking the green card. I mean, I don’t know what kind of questions are asked on the green card forms, but I know for the naturalization one, they ask, for example, have you ever committed a crime for which you have not been convicted or did you ever participate in a crime for which you were not convicted?

Virginia Jeker:
[00:06:57 – 00:07:31]
So drug use, for example, illegal drug use would be something that could fall into that category. And I don’t know if the same question is on the green card application. You might know better than I, because you’ve actually probably gone through this process. But at the end of the day, yes, this whole denaturalization thing can lead to the absolute revocation of your citizenship. And if you look at the statute, the tax code statute, they don’t seem to even look to when the green card might be revoked.

Virginia Jeker:
[00:07:31 – 00:08:09]
The tax statute under a cap A looks to the date that a court strips you of your U.S. citizenship. So they’re not even looking to what happens when you go back to the green card. They say the expatriation date for someone who is denaturalized is the date the court issues that order of denaturalization. So I don’t even know that the question about when you are reverting to the green card status, if that helps you. I’ve never seen a case in real life with this, but it looks like we may be seeing you could be.

Richard Taylor, Founder Plan First Wealth:
[00:08:09 – 00:08:17]
Stripped of your citizenship. That’s your exit date, but technically you’re selling a green card, so you’re a permanent resident. That’d be a conundrum. That’d be one to get your head around.

Virginia Jeker:
[00:08:19 – 00:08:49]
I think we may be seeing a real life case eventually dealing with this, because if you were the attorney for the taxpayer, for example, you would say, well, I know that the tax statute under 877A says it’s the date he’s issued that revocation of citizenship order. But it’s. If he’s still a green card holder, then he still can fall back on. My date is when I get that green card revoked administratively. So it’s a question.

Virginia Jeker:
[00:08:50 – 00:09:27]
No one that I know of knows the answer because many tax professionals were shocked. That article on forbes got over 208,000 views, and people were very surprised that it could apply in this kind of situation. And again, we all know the US Tax laws are full of nuances, and you’ve just indicated the perfect one. Whereas, gee, under the immigration law, if he goes back to having the green card status, can he have an argument that my green card has not been revoked at this time? So I have, I have a chance to fix my mess up from a tax perspective.

Virginia Jeker:
[00:09:27 – 00:09:28]
Don’t know.

Richard Taylor, Founder Plan First Wealth:
[00:09:29 – 00:09:36]
The famous kind of person in the crosshairs of this is Elon Musk as well. Now he’s got a. He’s got a few pennies.

Virginia Jeker:
[00:09:37 – 00:09:44]
Yes. I mean, if something happened with his citizenship, would be defraying the deficit a bit, wouldn’t he, with the exit tax.

Richard Taylor, Founder Plan First Wealth:
[00:09:45 – 00:09:52]
Yeah, but how would it work? It’s all private businesses, so. Well, not all private businesses. Some are public.

Virginia Jeker:
[00:09:52 – 00:10:06]
He’d be deemed to sell whatever shares he has in his companies, and I’m assuming the gain on that would be quite, quite significant. That could be, you know, a big exit tax liability right there.

Richard Taylor, Founder Plan First Wealth:
[00:10:07 – 00:10:07]
Yikes.

Virginia Jeker:
[00:10:07 – 00:10:22]
Yes. Scary times, scary times. That’s right. But let us look at statutes of limitation and get people a little bit more scared or a little bit more aware at least, of, you know, the pitfalls and what to look out for.

Richard Taylor, Founder Plan First Wealth:
[00:10:22 – 00:10:49]
Virginia, on that note, just before we do you mentioned get people a little bit more scared. I’ve had a, I’ve had a couple of calls recently where people have, have expressed fear, frankly, from consuming some of the content I’ve been putting out. We’ve been putting out. And, and I’ve also inferred from a couple of people that they, you know, I, I got asked once. Yeah, but how, how do you have any evidence the IRS actually going after people for this?

Richard Taylor, Founder Plan First Wealth:
[00:10:49 – 00:11:15]
We’re talking about missing forms. And I inferred from this, some people think, like, we’re almost scaremongering, and I mean, which I think is a crazy attitude to take when we’re reporting we’re sharing what is the actual law, what is actually happening. I think it is genuinely scary. The repercussions are genuine, are real, and can be punitive. And I think a lot of it is Unfair and idiosyncratic.

Richard Taylor, Founder Plan First Wealth:
[00:11:15 – 00:11:22]
And I think people should be scared. Scared may be the wrong word, but should be aware and conscientious.

Virginia Jeker:
[00:11:23 – 00:11:23]
Yeah.

Richard Taylor, Founder Plan First Wealth:
[00:11:23 – 00:11:25]
And I think they should seek advice.

Virginia Jeker:
[00:11:25 – 00:11:44]
Absolutely. One thing I’ve really enjoyed about my discussions with you is that you don’t try and scare people. And, and I don’t either. It’s just not the way I operate. I know others do operate as scaremongering to get in cases, but I don’t think that’s the right approach.

Virginia Jeker:
[00:11:44 – 00:12:15]
I prefer an approach of like, like informing, educating. And then people can make their own decision which way they want to go. But the point is they need the accurate information. And a lot of times, unfortunately there’s a lot of information available, but it’s not always accurate. So I think by my tax blogs, which I do research extensively before I post, I think the accurate there, I give the hyperlinks.

Virginia Jeker:
[00:12:15 – 00:12:45]
People can dig deeper and you always, you know, dig deeper in our conversations than in your conversations with other advisors. And I, I don’t always see that. So I would view your, your podcast and your blog as, as a great resource for people. Not trying to scare them, but to just let people know. And I will mention a few cases today where the IRS has gone down back and could go back over 20 years in certain instances for unfiling.

Richard Taylor, Founder Plan First Wealth:
[00:12:45 – 00:12:47]
It happens. We’re not making this stuff up.

Virginia Jeker:
[00:12:47 – 00:12:48]
No, exactly.

Richard Taylor, Founder Plan First Wealth:
[00:12:48 – 00:12:54]
So I think we’re trying to arm you for forewarn you and arm you to protect yourself. Right. Put that aside. Let’s deal with it.

Virginia Jeker:
[00:12:54 – 00:13:41]
Okay, so maybe we should start off with the general rule like we’re talking about the tax statute of limitations. And pretty much a simple way to understand that is to say many years. Does the IRS have to go back and claim that I haven’t done something properly on my tax returns or I haven’t filed something correctly and assess additional taxes. So the whole premise behind a tax statute of limitations, and any statute of limitations for that matter, is to give the people a sense of closure to their tax returns in the case of tax statutes of limitation, give them that feeling of closure. This is done.

Virginia Jeker:
[00:13:41 – 00:14:22]
I don’t need to worry about it anymore. The IRS has a certain amount of time to come after me and assess additional taxes for mistakes or omissions, but once that time period has passed, they cannot come after me. So that’s what the tax statute of limitations is all about. And we have different tax statutes of limitations depending on the case. So the general rule is there’s a three year statute of limitations and the three years runs from the date the tax return was actually filed or the date the tax return was due, whichever is later.

Virginia Jeker:
[00:14:22 – 00:14:45]
Okay. So once you filed your tax return, the IRS generally has three years to come after you. That three year period can be extended and we will talk about the next possible extension. This is not the only one. So the next possible extension is something called a six year expanded statute of limitations.

Virginia Jeker:
[00:14:45 – 00:15:22]
And that six year period will come into play if there’s something called a substantial understatement with regard to your taxes. So a substantial understatement exists when the taxpayer omits income that is greater than 25% of the amount of gross income that was reported on the tax return. So if the gross income that’s omitted is over 25% of what he reported, you’ve got a substantial understatement and the statute goes to six years.

Richard Taylor, Founder Plan First Wealth:
[00:15:23 – 00:15:32]
So if you have $100,000 a year declared income but you’ve not declared more than $25,000, you’re going to six years.

Virginia Jeker:
[00:15:33 – 00:15:52]
That’s correct. Great. I’m glad you gave a concrete example. Okay. There’s another one that’s very important for taxpayers with any kind of foreign financial assets, for example stock in foreign companies, foreign partnership interests, foreign bank accounts, foreign brokerage accounts.

Virginia Jeker:
[00:15:53 – 00:16:37]
This special six year statute of limitations will apply if the taxpayer omits over $5,000 of income and that income omission is related to one of these specified foreign financial assets. For example, let’s take an example. Someone has a controlled foreign corporation, they should have been reporting subpart F income and they didn’t report that income. And it was, let’s say for a particular tax year it was $6,000, therefore over 5,000. And then in that case they would have the six year statute of limitations applying to them on that, that tax return.

Richard Taylor, Founder Plan First Wealth:
[00:16:39 – 00:17:13]
I think one that’ll catch out loads of people is now interest rates have gone up. Interest in a bank account, you know, if interest interest rates 4 or 5%, you’ve got more than a hundred thousand dollars in a non U S Account that you’re going to be, you’re probably going to be over that 5,000 limit. One which I, I worry about people we get, you get Social Security here. People from the UK can get a basic state pension. That basic state pension can be 5, 10, maybe a bit more, up to $15,000 a year basically.

Richard Taylor, Founder Plan First Wealth:
[00:17:13 – 00:17:35]
Some people, and this happens think because it’s paid into a UK account and because the UK has a personal allowance, tax free personal allowance, that means it’s not taxable. But when I hear that, I’m thinking that you’re not reporting this in the U.S. clearly, because this taxable in the U.S. and I think that would, this would apply to them. But then these people have probably got more problems because they’re also probably not filing the forms that we’re about to talk about as well.

Virginia Jeker:
[00:17:35 – 00:18:14]
So that’s right. Okay, so one that you’re referring to is now the infinite, I call it the infinite statute of limitations, where the statute of limitations never starts. So the clock never starts to tick for the IRS in terms of limiting its time. If you have not filed a tax return so no return is filed, statute of limitations never starts. This hits a lot of people who are living abroad and working abroad, and maybe they think I don’t earn enough to be be needing to file a return because I have the foreign earned income exclusion of $130,000.

Virginia Jeker:
[00:18:14 – 00:18:30]
So I don’t need to file a tax return to claim it. And everything is nice and dandy. Not. So you do need to file that tax return to claim the foreign earned income or housing exclusion. So if no tax return is filed, statute of limitations doesn’t start.

Virginia Jeker:
[00:18:30 – 00:19:15]
And some people think, well, you know what, it’s okay when I’m dead if they haven’t caught me, it’s no problem. That’s not true because the income tax liability that you have carries over into your estate, it doesn’t magically disappear, and then you’re leaving the problem for the executor of the estate, for the heirs, possibly, and it gets really, really messy. So when you have an unlimited statute of limitations where it doesn’t start because you didn’t file a tax return return, it’s not solved by dying, let’s put it that way. If the issue involves fraud. So if there’s been fraud in filing that tax return, then the statute of limitations never starts.

Virginia Jeker:
[00:19:16 – 00:19:52]
And one thing that’s super interesting is a case, it’s actually a couple of cases by the tax court where the question arose, what if the taxpayer didn’t commit the fraud, but the tax return preparer committed the fraud? Does that unlimited statute of limitations still apply? And the answer is yes. So the innocent taxpayer is punished for the fraud committed by the tax return preparer. That tax statute of limitations doesn’t start even though the fraud did not involve the taxpayer.

Richard Taylor, Founder Plan First Wealth:
[00:19:52 – 00:20:06]
The cynic in me though, I guess. Are we talking here the usual case of the tax of the tax adviser fraud? Is that going to be when it’s someone promising, promising refunds and then there’s a little bit of like, taxpayer more.

Virginia Jeker:
[00:20:06 – 00:20:36]
Than making a mistake. I mean, you know, there’s. Unfortunately, there’s a lot of unscrupulous people out there, and some of them are tax return preparers and they will, for example, say, we can get you, you know, greater refunds and when we prepare your return. And they are preparing fraudulent returns, for example, claiming dependents that don’t exist, claiming mortgage interest. There’s no such thing as a mortgage on this property, and so forth.

Virginia Jeker:
[00:20:36 – 00:20:46]
So it’s clearly fraud. It’s not like, gee, we made a mistake. Okay. Unfortunately, a lot of taxpayers don’t fully examine their tax returns.

Richard Taylor, Founder Plan First Wealth:
[00:20:46 – 00:20:54]
No, but there is, there is, there is an element of culpability sometimes in this stuff when it’s like, if it’s too good to be true, if it smells fishy, it’s. It’s probably fishy, you know.

Virginia Jeker:
[00:20:55 – 00:20:56]
Correct.

Richard Taylor, Founder Plan First Wealth:
[00:20:56 – 00:21:04]
Yeah. So I don’t want to blame taxpayers, but sometimes you have to ask yourself, what were you thinking? Tax advisor went to prison recently. I think Castro.

Virginia Jeker:
[00:21:04 – 00:21:05]
Yes, John.

Richard Taylor, Founder Plan First Wealth:
[00:21:05 – 00:21:17]
Famous case where, because he was advised, I believe, he was advising Australian expats quite a lot. And there’s repercussions from this thoroughly unpleasant situation. It happens.

Virginia Jeker:
[00:21:17 – 00:21:36]
Yes, it does happen. And I think, as you say, Richard, if it’s too good to be true, you know, it isn’t. I unfortunately. Well, for example, if people want to really look it up, there was a case called the Fairbank F A I R B A N K the Fairbank case. And that went back.

Virginia Jeker:
[00:21:36 – 00:22:10]
It was in 2018, notice of deficiency, where the IRS went back to the year 2003 through 2009. And I think there was, you know, there were issues there with what, what went on with the return preparer. There was another, certainly, a case involving fraud called the Murin case. M U R R I N and that was a tax court case. And the notice of deficiency was issued in 2019 and was going back over 20 years because fraud was involved there.

Virginia Jeker:
[00:22:10 – 00:22:23]
So. But they weren’t. The tax court, as I remember it, did not feel the taxpayer was involved at all in the fraud. Okay. There’s a difference between being fraudulent and being stupid.

Richard Taylor, Founder Plan First Wealth:
[00:22:24 – 00:22:31]
Yeah. Well, then you get into a question of willful ignorance. We’ve talked about this a lot, Will. You’re ignorant, but it’s. Yeah, totally.

Richard Taylor, Founder Plan First Wealth:
[00:22:31 – 00:22:31]
Yeah. Yeah.

Virginia Jeker:
[00:22:31 – 00:22:32]
Right.

Richard Taylor, Founder Plan First Wealth:
[00:22:32 – 00:22:39]
But you’re left with the repercussions of the, you know, they can go back 20 years, then you’re going to get hit with attacks and, and the interest. And the interest Everything is going to.

Virginia Jeker:
[00:22:39 – 00:23:02]
Be staggering, total nightmare. And it was the tax return preparer that had committed the fraud in that instance, the Marin case. And I know that this is. It’s an unsettled area because the tax court has its view, but other courts have said, no, it’s got to be the fraud of the taxpayer in order for this to apply. So it’s an unsettled area.

Virginia Jeker:
[00:23:02 – 00:23:19]
But, you know, you never know. You never know. So you’ve got to be very careful with who your return preparer is and look at your return. And if you see this mortgage interest deductions or 20, you know, dependents being claimed, that should be a clue to you.

Richard Taylor, Founder Plan First Wealth:
[00:23:19 – 00:23:41]
You know, I have got some sympathy with that, though, because tax returns are indecipherable here. And I’ve got a background and a knowledge of this and even I really struggle with them, really struggle with them to decipher the forms. They are, they’re crazy complicated. So there is a cynic in me who, who, who has raised eyebrows. And I do think people need to be, to be more careful when something sounds.

Richard Taylor, Founder Plan First Wealth:
[00:23:41 – 00:23:57]
If you mean promised these return, these refunds that have no basis in any logic, then that should sound alarm bells, but at the same time, barely understand. I don’t think I understand my tax return, to be perfectly honest with you. And I’m very much tangentially related to this industry. So if I don’t, I don’t think most people do.

Virginia Jeker:
[00:23:58 – 00:24:14]
I think that’s correct. I think that’s correct. But there are a few red flags. For example, totally, if the return preparer is saying, I will take a percentage of the refund amount you get, that might be something that the person should be aware of. Why might someone want to do that?

Virginia Jeker:
[00:24:14 – 00:24:46]
Because the greater the refund amount is, the greater his compensation for preparing the return will be. So if you’re in that kind of situation, it might be a red flag. With the John Anthony Castro case, for example, he was very belligerent when taxpayers would question what he was doing with their returns and, you know, would shout down at them, basically. So if your return preparer is not listening to you and addressing your questions constructively, that’s another red flag. Okay, there are red flags.

Virginia Jeker:
[00:24:46 – 00:25:05]
There are. And people have to be aware and not be intimidated if their return preparer is shouting them down and saying, hey, I’m the professional, you know, you don’t know anything. I mean, that’s not the way you address your client. You’ve got to address constructively. You’ve got to answer Their questions.

Virginia Jeker:
[00:25:05 – 00:26:25]
So, yes, fraud is an instance when the statute of limitations will never start. Now, you had mentioned, Richard, very significantly, when a foreign information return is not filed, that statute of limitations will not start to run until the IRS gets that foreign information return and then they have three years from the date they have received it. So conceivably, if you have a foreign information return that has not been filed, for example, Form 8938, where you’re reporting foreign specified foreign financial assets owned by the taxpayer, or Form 5471, where you’ve got a foreign corporation, that information needs to be reported on that form, Form 8865 with regard to foreign partnerships, I mean, there’s a long, long list of foreign information returns, Form 3520 regarding foreign trusts. Now, we have had this discussion before about unfiled information returns and what can happen and do you have reasonable cause for not filing, filing it and so forth, because that might forgive penalties. All right, but the statute of limitations issue is quite different.

Virginia Jeker:
[00:26:26 – 00:27:39]
So with regard to form 3520, that form is used to report information about foreign trusts, but it’s also used in part four of that form iv, roman numeral IV to report foreign gifts or foreign bequests received by a US person if they’ve exceeded a certain amount. It’s $100,000 threshold. So if someone hasn’t filed the Form 3520 because they have received a foreign gift or a foreign bequest, that is an interesting point because that will not trigger the unlimited statute of limitations. And you learn this by carefully going through which code section mandates that you file the Form 3520 upon receiving a foreign gift or bequest and cross reference it with the unlimited statute of limitations provision that came in with fatcup that says if you didn’t file a foreign information return, the statute doesn’t start to run. So it’s actually examining both statutory provisions in the code.

Virginia Jeker:
[00:27:39 – 00:27:47]
And, and you see, wow, okay, I may escape if I didn’t file that foreign information return about the foreign gift.

Richard Taylor, Founder Plan First Wealth:
[00:27:48 – 00:28:08]
If I just can bring this to life. For people who are listening to this in my practice, what I see the most often is missing. Well, F bars are different, but F bars and 8938. So people are not reporting. People still not reporting their foreign accounts and assets.

Richard Taylor, Founder Plan First Wealth:
[00:28:09 – 00:28:36]
So there’s missing 8,938. Often people might be filing these forms, FBAR and 8,938, but they have non US retirement accounts, which are counted as a, as a trust. The most common example we see is a SIPP and they’re not filing a 3520 and a 3520A. And still all the time happened yesterday. We’re meeting people who have got Pfix often times within an Isaac 8629.

Richard Taylor, Founder Plan First Wealth:
[00:28:36 – 00:28:58]
They’re not filing the 8621 in relating to, in relation to the non US mutual funds, non US ETFs that they’re holding. And so there’s, and, and often, sometimes people are guilty, guilty and there’s wrong words use. People are making this mistake across all three and sometimes it’s just one. It doesn’t really matter. At least the problem is the same.

Virginia Jeker:
[00:28:58 – 00:29:12]
Correct. Every form that you’ve mentioned for those specific purposes that, that you’ve mentioned. If the form is not filed, it will result in this unlimited statute of limitations until the IRS gets the form.

Richard Taylor, Founder Plan First Wealth:
[00:29:12 – 00:29:31]
Okay, so does that unlimited statute of limitations, one, how big a problem is this? Are they going to go back? Two, does it not, does it relate to everything or does it, if I’ve not filed a 3520 because of a sip, does it mean my sips just under threat forever or does it mean everything’s under attack?

Virginia Jeker:
[00:29:32 – 00:29:51]
That’s an excellent question, Richard. An excellent question. Unfortunately, everything is under attack. The entire tax return remains open for the IRS to audit and examine and give you additional taxes. It’s not just this form related to my foreign pension or whatever.

Virginia Jeker:
[00:29:51 – 00:30:03]
So only that is open. The entire form 1040 is open for the IRS. So that’s a very unfortunate repercussion here.

Richard Taylor, Founder Plan First Wealth:
[00:30:04 – 00:30:04]
Yikes.

Virginia Jeker:
[00:30:05 – 00:30:07]
Yeah, yikes. Definitely yikes.

Richard Taylor, Founder Plan First Wealth:
[00:30:08 – 00:30:21]
What about if, what about if I, if I can assert a reasonable cause or non willfulness or what any other standards they have for, for saying sorry, sorry guys, it wasn’t my fault.

Virginia Jeker:
[00:30:21 – 00:30:59]
Reasonable cause can get you out of penalties, but it can’t get you out of the statute of limitations problem. So the statute of limitations is going to be open and they’re going to say, okay, you owe XYZ in tax because of this and there’s a penalty because you didn’t file it or whatever the penalty is going to be. Now if you have reasonable cause, which we discussed in one of our earlier podcasts, the penalty might be forgiven. So that’s it. And you’re not going to escape tax, you’re not going to escape interest.

Virginia Jeker:
[00:31:00 – 00:31:01]
Not going to happen.

Richard Taylor, Founder Plan First Wealth:
[00:31:01 – 00:31:07]
And to the, to the people who say, yeah, well, you know, they’re not Looking for me. It was a mistake. What do we say to that?

Virginia Jeker:
[00:31:07 – 00:31:13]
I don’t know. I mean, it’s playing Russian roulette, you know, do you want to do that? The bullet might be there.

Richard Taylor, Founder Plan First Wealth:
[00:31:13 – 00:31:25]
I can’t comprehend this. The attitude that. Attitude taxes. Attorneys before have talked in terms of like the risk profile of a potential client. And some clients, apparently you’re just okay to, to live without hanging over them.

Richard Taylor, Founder Plan First Wealth:
[00:31:25 – 00:31:37]
Maybe, maybe they get found out, maybe they don’t. Maybe they get selected for audit, even just randomly. Maybe they don’t. But Russian roulette is the perfect analogy. I can’t imagine going into my retirement without hanging over me.

Virginia Jeker:
[00:31:37 – 00:31:44]
Yeah, but a lot of, a lot of clients do play Russian roulette, so a lot of.

Richard Taylor, Founder Plan First Wealth:
[00:31:44 – 00:31:46]
Do you think they don’t understand the repercussions?

Virginia Jeker:
[00:31:47 – 00:31:52]
You know, it’s not something we, we can understand, but it happens.

Richard Taylor, Founder Plan First Wealth:
[00:31:53 – 00:32:07]
Do you think it’s because they don’t understand? They don’t. The concept of penalty stacking, which we’ve talked about before, well, they’ll, they’ll just throw the book at you and just keep leveraging, you know. No, it’s not 10,000. It’s 10,000 for that year and 10,000 for that year and ten thousand that year and 35% for that year.

Richard Taylor, Founder Plan First Wealth:
[00:32:07 – 00:32:17]
And stack it all together. And once you start, and then you add interest and everything else. Once you start stacking it up, it gets, it gets scary. Do you think people just don’t realize? They just think, oh, they hear 10,000.

Richard Taylor, Founder Plan First Wealth:
[00:32:17 – 00:32:25]
They think, I could, I could swallow 10,000. Not realizing that 10,000 is one part of a multi stacked approach.

Virginia Jeker:
[00:32:26 – 00:33:05]
Yes, I think that’s a big part of it. If they’re properly advised, you know, for example, you say, gee, a lot of professionals will talk about the risk profile of their client, but, but if they’re properly advised and given a number, let’s have the accountant run a number and give us an example of what penalty you might face. That’s giving the client full information that they can really see. Oh, I don’t think I want to take that chance. Or maybe they do, but I don’t see people being given that amount of information partly because they don’t want to pay for.

Virginia Jeker:
[00:33:05 – 00:33:07]
Yeah, that work to be done.

Richard Taylor, Founder Plan First Wealth:
[00:33:09 – 00:33:32]
Yeah. What would you say to the people who say, yeah, okay, so that was that. Yeah, I, I now realize that I didn’t file these forms, but that was, that was years ago and I am doing now and I don’t think there’s anything wrong in my tax return. I Don’t know. I don’t know for sure because I don’t really understand my tax return.

Richard Taylor, Founder Plan First Wealth:
[00:33:32 – 00:33:40]
But you know, I, I think everything’s okay and you know, it’s like 5, 6, 10, however many years ago.

Virginia Jeker:
[00:33:43 – 00:34:17]
I think they need to understand, you know, is this unlimited statute of limitations going to apply to them? And I’ll give you an example of how this hits somebody by surprise. So this unlimited statute of limitations if you fail to file a foreign information return that is otherwise due to came in with FATCA. Okay, so that came in in 2010. So the question was, all right, so for tax returns filed after that certain date in 2010, March something of 2010, this unlimited statute of limitations rule applied.

Virginia Jeker:
[00:34:18 – 00:34:51]
So if someone had an earlier tax return, they may be thinking, well, it doesn’t matter for me because it’s not a 20 after a 2010 return. But if you read the statute, it applies to, also to years that were open at the time of the March 2010 enactment of the act. So you could have had a six year statute of limitations because of substantial understatement of income. So that would take you back 2010, going back at least six years. All right, where are you then?

Virginia Jeker:
[00:34:54 – 00:35:55]
2003, we had a case, actually this was the Fairbank case. It was a 2018 notice of deficiency and the IRS was going back to tax years 2003 through 2009 and also 2011, for some reason they didn’t hit 2010. And that one was because somehow one of these foreign information returns may not have been filed and the guy still had the open years because of when the statute of limitations may have still been open based on substantial understatement or something. So it can be that they by some fluke can go back quite far. And you know, you never think about it happening until like you read one of these cases and you’re like, oh my goodness, might still be an issue.

Richard Taylor, Founder Plan First Wealth:
[00:35:56 – 00:36:20]
But what do I do if I’m thinking, you know, listen to this podcast, because of this podcast, your blog recently, they’ve got themselves a good cross border tax advisor and they’re pretty sure that the last couple of last few years, everything, everything’s been filed. Statute limitations, clock ticking. Great. But they’re aware that prior to this something was missing. 35, 2086, 21, whatever it might be something.

Richard Taylor, Founder Plan First Wealth:
[00:36:21 – 00:36:37]
But, but there was, they were still trying to, there was still no fraud going on. There was still no statement of income, as far as they’re aware. They think everything is, they think everything is okay, but you never know. In u. S. Tax, but they think everything’s okay. But now they’re aware that potentially that returns open forever.

Richard Taylor, Founder Plan First Wealth:
[00:36:38 – 00:36:42]
Is it worth that person like revisiting this or is it just. That’s just a risk you’re live with?

Virginia Jeker:
[00:36:42 – 00:37:16]
Well, the IRS does have procedures where things can be fixed without penalties in many cases. So for example, the streamline program has been around for a very long time now since I think 2012. That involves when someone has not reported income from a foreign financial asset and they can file their corrected tax returns as well as these delinquent foreign information returns that weren’t filed. That’s usually going back three years only. Okay, so not like, oh my gosh, it was eight years ago when I didn’t file something.

Virginia Jeker:
[00:37:18 – 00:37:53]
So that’s one possibility. The other possibility is the IRS has a procedure. If all of the income was reported but you failed to file the foreign information return for some reason, then they have this delinquent foreign information return procedure. And if you can submit reasonable cause statement, you and I have spoken about how detailed and robust that really needs to be, then the penalty may be forgiven for not filing it. And by filing it, of course, then you’ve got your statute of limitations starting to kick in.

Virginia Jeker:
[00:37:53 – 00:38:25]
So the delinquent information return procedure might be helpful for someone in that case. But having said that, reasonable cause is not that easy to get. You and I have talked about cases where, you know, we’ve seen the IRS not accept reasonable cause statements that we think, or at least I think were very well prepared and would constitute reasonable cause in my mind. And the taxpayer has had to go to court and fight it. And then the IRS can seeds and they give back the penalty amount.

Virginia Jeker:
[00:38:25 – 00:38:59]
But meanwhile, this poor taxpayer has lost hours and hours of sleep. He’s paid hours many dollars in professional fees to get this sorted out. The taxpayer advocate service has brought this up with the irs and the IRS did announce, yes, we are going to change our like automatic assessment of penalties for certain things and certain filed foreign information returns that were late. And we will be reading the reasonable cause statement, But I’m not sure if that’s truly happening. Okay.

Virginia Jeker:
[00:38:59 – 00:39:26]
I’m just not sure. I mean, I recently saw a case reported in may of this year involving a chinese woman that was a resident, became a U.S. resident, and I believe she had gotten a lot of wedding gifts when she had just started her residence. They were, you know, given to her as gifts for her wedding. And she didn’t file the Form 3520. And the IRS came after for these penalties.

Virginia Jeker:
[00:39:26 – 00:39:38]
And she had relied on TurboTax. It said, you know, doesn’t matter the amount. If they were gifts, you don’t need to report them. And it didn’t tell her about this foreign information return. And the IRS did hit her for these penalties.

Virginia Jeker:
[00:39:38 – 00:40:00]
And I know that she was fighting it in court. And the court, the IRS had said, we want summary judgment on this, meaning there’s no issues to be decided here. You should just grant us our, you know, request that the penalties would apply. And the court said, no, there’s too many issues of fact here to go through. Did she have reasonable cause and so forth.

Virginia Jeker:
[00:40:00 – 00:40:15]
So, you know, I’m just, I’m hesitant to say the IRS is following what it announced because they don’t really know that it said, well, we will be considering and reading the reasonable cause statements. Why did this case get so far?

Richard Taylor, Founder Plan First Wealth:
[00:40:16 – 00:40:35]
It’s such a low bar that it’s newsworthy. Not only newsworthy, it’s celebrated in the community. When they say they will read, they will. They will just read and consider. I know, a reasonable course statement that someone spent hours and thousands of dollars in preparing.

Richard Taylor, Founder Plan First Wealth:
[00:40:35 – 00:40:45]
It’s so depressing that that is noteworthy. And then that’s before we even factor in. Yeah, but are they reading it? Are they taking it into consideration? People have no idea how the.

Richard Taylor, Founder Plan First Wealth:
[00:40:45 – 00:40:48]
The tax system works. What you do, you kind of wish you didn’t.

Virginia Jeker:
[00:40:49 – 00:41:35]
Again, Richard bears noting that because you didn’t file the Form 3520 with regard to a foreign gift or bequest that you received, that that is not a form, that Part IV is not a form that will keep the statute of limitations open indefinitely. So someone there might say, you know what, maybe I’ll take the chance. Because I’m very concerned about, you know, even though I think I have a great reasonable cause, maybe the IRS won’t believe so, and I’m going to be hit with the penalty. Now, the statute of limitations might end for your tax return, but I believe they can always come back and hit you with the penalty for not filing it.

Richard Taylor, Founder Plan First Wealth:
[00:41:36 – 00:41:36]
Oh, really?

Virginia Jeker:
[00:41:37 – 00:41:58]
Yeah. I don’t think the statute of limitations has anything to do with the penalty. Do you follow me? They can not examine your tax return and keep that open because you didn’t file a Form 3520 to report your foreign gift or bequest, but you can still be assessed the penalty. And the Penalty can be great.

Virginia Jeker:
[00:41:58 – 00:42:00]
25 of the value of the gift.

Richard Taylor, Founder Plan First Wealth:
[00:42:02 – 00:42:04]
Wow. Wow.

Virginia Jeker:
[00:42:04 – 00:42:07]
So there’s a lot of nuances here. You know, that, that.

Richard Taylor, Founder Plan First Wealth:
[00:42:07 – 00:42:25]
So if you, if you got, if you got a million dollar inheritance 20 years ago, the statute of limitations is still on that account and you didn’t report it. It’s actually limitations on that return is closed. But if they, if they get wind of that, they can still come after you for the 25% of the, of the million dollars.

Virginia Jeker:
[00:42:26 – 00:42:31]
I’m assuming that this requirement under the 3520 existed 20 years ago.

Richard Taylor, Founder Plan First Wealth:
[00:42:32 – 00:42:35]
Yeah. Okay. But if that was the case. Wow. Yikes.

Richard Taylor, Founder Plan First Wealth:
[00:42:36 – 00:42:36]
God.

Virginia Jeker:
[00:42:36 – 00:42:50]
I mean the penalty for not filing it doesn’t go away. But the statute of limitations issue was closed. The answer always argue I had reasonable cause, but that’s not always that easy to get.

Richard Taylor, Founder Plan First Wealth:
[00:42:50 – 00:43:13]
Or, and even if you end up winning, you could end up in court spending thousands of hours and thousands of more dollars trying to assert it. So you win, but you also kind of lose along the way. The answer here is just always advice, advice, advice. Just please people have a cross border professional prepare your returns then from the get go. I encountered someone yesterday who, who had come here and was doing largely diying and, and there was everything in there.

Richard Taylor, Founder Plan First Wealth:
[00:43:13 – 00:43:29]
Sips with no 3520pfix, ISIS, all sorts of problems and it can all be avoided with a good cross border tax adviser. Or at the very least if it’s not avoided, you’ve got a better case for reasonable cause.

Virginia Jeker:
[00:43:29 – 00:43:56]
Absolutely, absolutely. Because one thing the IRS does look at is was this professional you hired competent to advise you on this issue. So you know if you’re using a return preparer that’s charging you 500 bucks, he’s around the block in a little storefront operation and you’ve got cross border issues. I don’t think that’s going to fly. As you know I had proper tax advice.

Richard Taylor, Founder Plan First Wealth:
[00:43:57 – 00:43:58]
Totally. Yeah.

Virginia Jeker:
[00:43:58 – 00:43:58]
Right.

Richard Taylor, Founder Plan First Wealth:
[00:43:58 – 00:44:00]
Now that’s why we’ll keep having these conversations.

Virginia Jeker:
[00:44:00 – 00:44:04]
I mentioned who got the wedding gifts was she’s relying on TurboTax.

Richard Taylor, Founder Plan First Wealth:
[00:44:06 – 00:44:30]
So let’s see those, those two words strike fear into me when I hear a client mention them or a prospect if client mentioned them. So God knows what they do to the crossbody. You know, I don’t know what happens to you when you hear those two words. But you just two I know we’re in trouble when I hear turbo tax or I’m an accountant, which means I do my own. A UK accountant, which I do my own tax returns which means what, what, what am I about to find here?

Virginia Jeker:
[00:44:30 – 00:44:50]
Yes, what are you about to find? That’s the question. One other thing I would like to mention on this not filing of foreign information returns. So this applies. You and I spoke in one of our earlier podcasts about someone that gives up their green card when they’ve been in the US for at least eight tax years.

Virginia Jeker:
[00:44:50 – 00:45:38]
And they can then be treated as something called a covered expatriate if they have, you know, the 2 million net worth or they meet the income tax liability threshold or they haven’t been fully compliant with their US Tax returns, US Tax obligations. So these people who give up their citizenship or give up long term residency status need to file in the year following the year of the expatriation. They need to file this form 8854. And that form covers a few things. It covers showing that they don’t where they do have a net worth of $2 million or more, part of it has a balance sheet where they list their assets and the fair market values and so forth and so on.

Virginia Jeker:
[00:45:38 – 00:46:26]
So that Form 8854 is attached to the final tax return. And the final tax return is comprised of two elements, a Form 1040 for the part of the year where they were still a US tax subject and form 1040nr for the the balance of the year that they after they’ve expatriated that they’re no longer a US person. So the Form 8854 is attached to that. Now is that one of these foreign information returns that if you don’t file the Form 8854, your tax return remains open indefinitely under the statute of limitations rules we’re discussing. Interestingly enough, it is not one of those from foreign information returns that will keep the tax return open.

Virginia Jeker:
[00:46:26 – 00:46:46]
You can still be assessed a penalty for not filing it. I believe it’s $10,000. But that’s the least of your worries. If you don’t file it and satisfy the requirement that you certify your tax compliance for the five years prior, you will then be treated as a covered expatriate. And we know bad things happen to those guys.

Virginia Jeker:
[00:46:46 – 00:47:16]
So the Biden administration had in one of their tax green green books recommended that this Form 8854 be added to the list of foreign information returns that can keep the statute of limitations open forever until they get it. That still hasn’t been done. We haven’t seen that happen yet. But it did come up, as, you know, a potential for tax reform, but it didn’t happen. So that I found that interesting, the formation 5, 4.

Richard Taylor, Founder Plan First Wealth:
[00:47:17 – 00:47:22]
If you’re not filing that form, though presumably that’s because you don’t realize you’re expatriating.

Virginia Jeker:
[00:47:23 – 00:47:45]
That could be. Or people, you know, they turn in their green card, they, they don’t know it’s treated as an expatriation because they’ve held it for eight years. Right, that could be. Or people just aren’t aware they need to do this even though they’ve given up citizenship. Especially with accidental Americans who aren’t familiar with the US Tax system, have no clue.

Virginia Jeker:
[00:47:45 – 00:48:00]
And they’re like, oh my gosh, I just realized I’m also a U.S. citizen. I want to get rid of my U.S. citizenship. And they go and they, they give up their citizenship at the nearest embassy. They may not realize anything about what they should have been doing with their tax returns.

Richard Taylor, Founder Plan First Wealth:
[00:48:01 – 00:48:08]
So they, they would give up? Yeah, they would just move on. They wouldn’t do anything. They do it from the immigration side, but they do nothing from the tax side. Right, right.

Virginia Jeker:
[00:48:08 – 00:48:10]
Technically, they’re going to be a covered.

Richard Taylor, Founder Plan First Wealth:
[00:48:10 – 00:48:18]
Expatriate, which is going to can if they ever want. If they ever have any US Family or ever want to come back. I guess it have massive implications.

Virginia Jeker:
[00:48:18 – 00:48:19]
Yeah.

Richard Taylor, Founder Plan First Wealth:
[00:48:19 – 00:48:21]
Wow. That’ll be an unpleasant surprise, wouldn’t it?

Virginia Jeker:
[00:48:22 – 00:48:23]
Wouldn’t be good.

Richard Taylor, Founder Plan First Wealth:
[00:48:24 – 00:48:25]
More food for thought.

Virginia Jeker:
[00:48:25 – 00:48:52]
Okay, well, I think that that covers pretty much everything I wanted to raise on the statute of limitations issues. You know, there’s many nuances. Now, we started off saying, gee, someone who’s stripped of his U. S. Citizenship is, is treated as, you know, a covered expat if he’s got that net worth or any of the other tests met, which, as I said, surprised me and many, many professionals.

Richard Taylor, Founder Plan First Wealth:
[00:48:54 – 00:48:56]
Watch your space on this one, I guess.

Virginia Jeker:
[00:48:57 – 00:49:14]
Yes, absolutely. Because we see it happening more and more and that, that this has become an issue, this issue of denaturalization. And let’s see, you know, what’s going to happen. I mean, it may get somebody. You just don’t know.

Virginia Jeker:
[00:49:14 – 00:49:36]
I mean, if you imagine the worst case, somebody gets stripped of their US Citizenship and they don’t have the net worth, they don’t have the income tax liability, but they haven’t been fully tax compliant for the past four, five years. I mean, is the IRS really going to go after that guy? I don’t know. Is he a covered expat? Technically, yeah.

Richard Taylor, Founder Plan First Wealth:
[00:49:36 – 00:49:47]
So if he’s, if he was, if he was under 2 million but still considered a covered expat, they’d go after them. You know, they do the whole liquidation. Mark to market liquidation on the day they left or the day before they Left and they’d come after you for tax. Right.

Virginia Jeker:
[00:49:48 – 00:50:04]
Well, about enforcement, okay, we don’t know because we haven’t seen the cases. But we are, we are talking, you know, this is the law. This is what could happen. This is the technicality of it all. What do you think of that?

Virginia Jeker:
[00:50:04 – 00:50:10]
Someone’s involuntarily stripped of their U.S. citizenship and finds himself with a huge exit tax.

Richard Taylor, Founder Plan First Wealth:
[00:50:11 – 00:50:20]
You got to think if it’s someone like, you know, if it’s someone high profile and wealthy, they’re going to fight this every step of the way. Immigration and then tax.

Virginia Jeker:
[00:50:20 – 00:50:43]
I think, Richard, in the real world, what would happen is they can’t just strip you of your US Citizenship and it’s done. It’s got to go through a court. Okay, where you can. The immigration statutes need to be examined. Can this person be denaturalized because of not reporting drug use, whatever, whatever other crime on his immigration forms?

Virginia Jeker:
[00:50:43 – 00:51:33]
And once that is happening, if it’s a high net worth person, then they’ve got to go to the best tax professional possible and say, look, this might happen to me, I might be stripped of my U.S. citizenship. What can I do so that I’m not going to be treated as a covered expatriate? They’re going to have time. It’s like the person at the border that we spoke about with the green card and he hasn’t been complying with the immigration rules of, you know, U.S. residency. And the border authorities give him a hard time and pressure him and say, look, if you Sign this Form I407 and relinquish your green card here at the border, then you know what, we’re going to let you in and whatever, whatever.

Virginia Jeker:
[00:51:33 – 00:52:03]
And so this poor guy at the border, because he’s being pressured, gives up the green card by signing the Form I407 at the airport, doesn’t realize I’m a long term resident. I’ve held the green card for at least eight tax years. Now by signing the Form I 407, I have voluntarily given up my green card and this whole expatriation regime is applying to me. I didn’t have time to do tax planning. I didn’t think about it.

Virginia Jeker:
[00:52:03 – 00:52:21]
So it’s a similar case where you say to that guy, don’t sign that. I407 demand your administrative hearing to see if you should be having the green card revoked so you at least have time to do some tax planning. Do something.

Richard Taylor, Founder Plan First Wealth:
[00:52:22 – 00:52:40]
Buy yourself some time, folks. We’ve repeatedly referred back to them, but just a reminder, episode 37 when we talk about IRS penalty abatement. And episode 45 when we talk about leaving the US the exit tax, giving up involuntary. Well, voluntarily but unknowingly. Understanding the consequences of relinquishing your green card at the border.

Richard Taylor, Founder Plan First Wealth:
[00:52:40 – 00:52:48]
Lots of things not to do, lots of things to think about, to be aware of. Go back, check them out. They’re all linked. We’ve referred back to them. This is a tapestry.

Richard Taylor, Founder Plan First Wealth:
[00:52:48 – 00:52:52]
And not doing one thing over here has a downstream repercussions over here.

Virginia Jeker:
[00:52:52 – 00:53:05]
Yes, yes, exactly, exactly. And you know, people can find the US Tax blog. I have certain categories that they will find of interest. We have a category for green card holders. We have a category for expatriation.

Virginia Jeker:
[00:53:05 – 00:53:30]
So people can always go to those and review, you know, the blogs we’ve got up and I’ll just let people know where they can find that information. It’s www.us-tac.org org. And I think people can be reading and learning and reviewing a lot of the things we’ve, we’ve spoken about today and in our earlier podcasts.

Richard Taylor, Founder Plan First Wealth:
[00:53:31 – 00:53:46]
And you know what, if anyone’s still coming to the US Given what’s going on right now, read this stuff before you come here. So much headache can be removed, can be avoided if you understand this before you come. But that’s not what happens. People, people. This is not logical, I don’t think.

Richard Taylor, Founder Plan First Wealth:
[00:53:46 – 00:53:53]
Isn’t it certainly coming from other tax regimes where this is just this just stuff doesn’t exist. It’s not logical. So when you move here, and we’ve.

Virginia Jeker:
[00:53:54 – 00:53:57]
Mentioned it before, Richard, like people are not given the information.

Richard Taylor, Founder Plan First Wealth:
[00:53:58 – 00:53:58]
No.

Virginia Jeker:
[00:53:58 – 00:54:02]
Before they’re granted the green card, before they’re granted U.S. citizenship.

Richard Taylor, Founder Plan First Wealth:
[00:54:02 – 00:54:04]
It should be before they get the visa. Virginia.

Virginia Jeker:
[00:54:04 – 00:54:07]
Before they move here, understand their tax liabilities.

Richard Taylor, Founder Plan First Wealth:
[00:54:07 – 00:54:23]
Virginia. That’s why everyone moves here with unreported accounts and not filing certain the right forms and pfix galore. Because so much could be avoided if they, if they took advice or they, they learned this stuff before they left their home country so much. And then before they take green card and then before they get citizenship. Right.

Richard Taylor, Founder Plan First Wealth:
[00:54:23 – 00:54:25]
Well, thank you again.

Virginia Jeker:
[00:54:25 – 00:54:35]
So pleasure. Richard. Always great to speak to you as always. Knowing that you are, you know, really on the ball with your clients. They’re very lucky to have you.

Richard Taylor, Founder Plan First Wealth:
[00:54:36 – 00:54:39]
Thank you. Thank you. I hope they agree. Until the next time.

Virginia Jeker:
[00:54:39 – 00:54:41]
Yes, I look forward. Have a great day.

Richard Taylor, Founder Plan First Wealth:
[00:54:42 – 00:55:33]
You too. Cheers. Sam.