But the newest disclosure for foreign trusts will be a different kettle of fish entirely.
The year before, Congress passed a law that terminated many tax benefits of foreign trusts established by U.S. residents, treating them more like domestic trusts.
Moreover, other penalties may apply, such as for failing to file IRS forms relating to ownership of foreign corporations or interests in foreign trusts, among others.
U.S. lawmakers designed the Foreign Account Tax Compliance Act (FATCA) to "force foreign financial institutions, foreign trusts, and foreign corporations to provide information" on undisclosed assets held by Americans after Dec. 31, 2012.
In other words, Foreign Asset Protection Trusts do not rely on the U.S. courts finding that the laws of the foreign jurisdiction will apply, and in fact there is an implicit assumption that the U.S. courts will not make such a finding those trusts are designed to be effective even in the face of an adverse ruling by a U.S court.
This is not to be read as any endorsement of Foreign Asset Protection Trusts.
The propagation of the use of trust protectors began with the rise of foreign asset protection trusts established by American citizens during the 1990s.
Fourth, the complexity of Romney's one publicly released tax return, with all its foreign accounts, trusts, corporations and partnerships, leaves even experts (including us) scratching their heads.
Because self-settled asset protection trusts were generally invalid in most U.S. states at that time, Americans who established these trusts in foreign countries risked granting control of their assets to foreign trustees.
Even though this article focuses solely on FBARs, there are a bevy of other tax forms to consider with foreign transactions, companies, trusts and more.
FORBES: Handling New IRS Foreign Reporting Requirements Without Doing Jail Time
In 2002, they gave the go-ahead for trusts to fly in foreign surgeons to cut waiting lists.
The bank also estimates that profit-oriented investors (including trust banks, investment trusts, individuals and foreign funds) now own a greater proportion of those shares than do cross-holding banks and business partners who frequently prop up bad managers.
The contrast is that FAPTs do not require favorable choice-of-law rulings to function as intended, since a presumption behind those trusts is that the foreign jurisdiction where the trustee is based is not going to honor U.S. law or court rulings anyway.
This Opinion is as close as we have come so far to a ruling on the choice-of-law issues involving asset protection trusts, outside of the foreign trust context.
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