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IPFS News Link • TAXES: Federal

An important ruling on foreign financial accounts


Last night my partner and I held our monthly subscribers-only teleconference for premium members, and one of the hot topics was the ambiguous nature of laws.

Everywhere in the world, laws are riddled with errors, discrepancies, omissions, and double think. Often these ambiguities are intentional– a result of political bargaining or lobbying to maintain a back-door loophole that only affects a small percentage of the population.

More often than not, though, the ambiguities are unintentional, derived from the haste and incompetence of lawmakers. Whatever the reason, there are some rules that are so opaque that legal volumes are filled with case studies and court interpretations.

US tax code and offshore regulations are great examples.  Current law requires US taxpayers to report ownership interest and signature authority over foreign financial accounts (“FFAs”) if the total value of those FFAs exceeds $10,000.