International Taxation

There is an established route, and which one fits depends on your facts. The IRS Streamlined Filing Compliance Procedures cover taxpayers whose failure to file was non-willful, and currently require three years of returns and six years of FBARs. If the returns were correct and only information returns were missed, the Delinquent International Information Return procedures may fit instead. Willfulness is a factual determination that no one should assume in either direction, so we assess it before recommending a path.

Yes. The United States taxes citizens and green card holders on worldwide income no matter where they live, and paying tax in another country does not remove the filing obligation. What foreign tax usually removes is the balance due. The Foreign Earned Income Exclusion on Form 2555 is worth up to $132,900 for 2026, and the Foreign Tax Credit on Form 1116 offsets what you already paid abroad. Most of our expat clients owe little or nothing once both are applied. The filing itself is still required.

FBAR is FinCEN Form 114, required when your foreign financial accounts total more than $10,000 combined at any point in the year. It covers bank, brokerage, and pension accounts, including accounts you only have signature authority over, and it is filed with FinCEN separately from your tax return. The current non-willful penalty is $16,536 per report, and willful cases reach the greater of $165,353 or half the account balance. If you have missed years, there are established catch-up paths, and using one is materially safer than quietly filing late.

They are different filings with different agencies, and many people owe both. FBAR goes to FinCEN once your foreign accounts exceed $10,000 combined. Form 8938 goes to the IRS with your return, and it has two thresholds per category, not one. A single filer in the US files if foreign assets exceed $50,000 on the last day of the year or $75,000 at any point during it. A married couple living abroad files at $400,000 on the last day or $600,000 at any point. Crossing either test triggers the filing. Filing one does not satisfy the other, and the asset definitions do not match.

Usually Form 5471, and sometimes more. Form 5471 reports foreign corporations and carries a $10,000 penalty per company per year under IRC Section 6038. If the failure continues more than 90 days after IRS notice, another $10,000 accrues per 30 days, capped at $50,000, so $60,000 per company per year at the ceiling. Form 8858 covers foreign disregarded entities and branches, and Form 8865 covers foreign partnerships. If the company is a controlled foreign corporation, you may also have a current inclusion of net CFC tested income, the successor regime to GILTI, or Subpart F income even though nothing was distributed to you. For tax years beginning after December 31, 2025 those inclusions run higher, because the One Big Beautiful Bill Act repealed the QBAI routine-return exclusion and cut the Section 250 deduction to 40 percent.

Probably yes, as a reporting matter rather than a tax matter. A gift or inheritance above $100,000 from an individual or estate outside the United States is reportable on Form 3520, and the threshold drops to $20,573 for 2026 if the gift comes from a foreign corporation or partnership. The receipt itself is generally not taxable income to you, which is exactly why people skip the form. The penalty under IRC Section 6039F(c) is 5 percent of the gift for each month the failure continues, capped at 25 percent of the amount received, absent reasonable cause. The reporting failure, not the inheritance, is the real exposure.

It depends on the tax rate where you live, and the choice has consequences beyond this year. The exclusion tends to win in a low-tax or no-tax country, and the credit tends to win in a high-tax one. The exclusion only covers earned income, so it does nothing for rental, pension, or investment income. It can also reduce the refundable child credit and your IRA contribution room, and revoking it locks you out for five years without IRS consent. We model both before choosing.

Most likely yes to both. H-1B holders generally become resident aliens under the substantial presence test, which is met with 31 days in the current year and 183 days counting all current-year days, a third of last year, and a sixth of the year before. A resident alien reports worldwide income and files FBAR and Form 8938 on home-country accounts. F-1 and J-1 holders are treated differently for a limited period, so do not assume the visa rules are interchangeable.

Often, yes. Because non-US pooled funds hold predominantly passive assets, they generally meet the passive foreign investment company tests in IRC Section 1297, and the default Section 1291 regime taxes gains at the highest ordinary rate for prior years with an interest charge. A Section 1295 QEF election is the usual fix, but it requires the fund to issue a PFIC Annual Information Statement, and many foreign funds do not. Where QEF is unavailable, we compare a Section 1296 mark-to-market election against the default.

Yes, and most of our international engagements work exactly that way. A CPA license is a US credential and does not require you to be near a US office. Documents move through an encrypted client portal, consultations happen by phone or video around your time zone, and you work directly with the same licensed CPA throughout. We have offices in Houston, San Jose, and New York, but nothing about an international return requires you to visit one.

Pricing is flat-rate and quoted after a free consultation, because the cost is driven by how many information returns and how many years are involved rather than by an hourly clock. To scope it we need your last filed US return if there is one, year-end balances for each foreign account, any foreign tax returns you file, and details of any foreign company, trust, or pension. You get the number before any work begins.