Complex Domestic & International Tax Matters

It’s crucial for U.S. taxpayers to accurately present required reporting to U.S. taxing authorities. Reporting non-compliance can create substantial penalties, loss of passport, or risks of prosecution.

We’re known for turning compliance complexity into an advantage for our high and ultra-high net worth clients by making their challenges understandable.

We have extensive experience meeting with legal counsel and clients to discuss client needs and the mechanics of the situations they face. Over the years, the depth and breadth of that experience has enabled us to provide clients with analytics and a point of view that helps them minimize and mitigate costly compliance mistakes. We also advise them concerning the drawbacks associated with not fulfilling their regulatory and fiscal reporting responsibilities.

The Challenges

When clients come to us with non-compliant reporting challenges, we help them gain peace of mind by encouraging the use of existing U.S. tax amnesty programs.

Among the services we provide for complex tax situations are:

Voluntary Disclosures and Streamlined Filing Compliance Procedures for Qualifying U.S. Taxpayers
Corporate Taxation
Estate & Trust Tax
International Taxation
M&A Tax Compliance Due Diligence
State & Location Taxation
Federal Income Tax
Tax Reporting Compliance Services
Tax Compliant Wealth Planning
FIRPTA
Cross-border taxation
Digital Assets/Cryptocurrency

How virtual currencies and digital assets are taxed.

Whether you’re new to cryptocurrency investing, or you have a substantial portfolio, it is necessary to understand how virtual currencies and digital assets are taxed.

Since 2014, U.S. taxpayers are required to report all crypto conversions, payments, purchases, and income to the IRS, and to state tax authorities where applicable. Each of these transactions has different tax implications.

There are multiple ways you could end up owing taxes through cryptocurrency transactions. Without the help of a crypto taxation expert, even an honest mistake could incur costly IRS penalties.

While multiple federal agencies have issued proposed regulations, the ones that matter for your taxes are those of the IRS. Beginning in 2019, U.S. tax filers must answer a question on Form 1040 asking if they had any type of transaction related to a virtual currency or digital asset during the year.

On 4/19/24, the IRS published draft Form 1099-DA for reporting digital asset proceeds from broker transactions. The IRS states that: “For sales or exchanges of digital assets that take place on or after Jan. 1, 2025, the final regulations would require brokers, including digital asset trading platforms, digital asset payment processors and certain digital asset hosted wallet providers, to report gross proceeds on a newly developed Form 1099-DA and to provide payee statements to customers. Brokers, in certain circumstances, would also be required to include gain or loss and basis information for sales that take place on or after Jan. 1, 2026, on these information returns and statements, so that customers have the information they need to prepare their tax returns”. This reporting can be risky and expensive without assistance.

The important take away is that taxpayers that are not digital asset compliant may want to start considering becoming compliant ready now. When Form 1099-DA is approved, the IRS will have the ability to track digital asset income. That said, it is best to have good recordkeeping of all digital asset transactions. This means that taxpayers involved with digital assets need to keep track of their digital asset trading activities, wallets, exchanges, and account reconciliation in order to be aware of their potential reporting obligations.

Testimonials: Complex Domestic & International Tax Matters

“As an expat living in Costa Rica, I have lived the burden of FATCA and its reporting requirements. My bank closed my account and all the other banks simply refused to open an account without the proper documentation. I felt like a financial pariah. I did not think that I had to file a US Tax return because I don’t live in the US, and I don’t have any income arising in the US. Foodman assisted me by preventing me from paying taxes on the same income both to the US and to Colombia, where I live, by utilizing the Foreign Earned Income Exclusion and the Foreign Tax Credit”.

Expatriate employed by a Colombian Corporation

“I received what is called a “Soft Letter” from the IRS stating: “Our records indicate that you haven’t taken necessary action to remedy your non-compliance with U.S. reporting requirements relating to foreign income, foreign entities, or foreign financial accounts.” I became concerned and knew that I needed to take immediate action. Foodman CPAs & Advisors assisted me with submitting the proper narrative statement to the IRS as per the instructions of the “Soft Letter” regarding my options related to underreported foreign assets. The explanations provided by Foodman together with all the actions taken to become compliant were successful. I am finally able to sleep well at night!”

High Net Worth Individual in Tamarindo, Costa Rica

“Foodman CPAs & Advisors assisted me with the IRS Streamlined Filing Compliance Procedures. I am a Taxpayer that was able to certify that failure to report all income, pay all tax and submit all required information returns such as the FBAR – was due to non-willful conduct. Foodman organized all of my tax documents, gathered all the foreign financial account statements, and presented to the IRS a complete package. By ensuring accuracy, knowledge, and expertise, Foodman was able to avoid the risk of audit or rejection from the program. Although this is a daunting task, Foodman made the process painless. Thank you Stanley!”

John, Costa Rica

“There are so many warnings out there regarding the IRS cracking down on Virtual Currency that I decided to talk to Foodman CPAs & Advisors about potential tax consequences given the fact that I’ve been somewhat active with Virtual Currency. I am absolutely happy that I sought the advice of a tax professional that understands Virtual Currency. Foodman explained that Taxpayers who engaged in virtual currency transactions in 2020 must answer a Yes or No Question on page 1 of Form 1040. The question is: “At any time during 2020, did you receive, sell, send, exchange or otherwise acquire any financial interest in any virtual currency? Failing to answer will prevent electronic filing of a 2020 Form 1040. The firm explained to me that this question first appeared in Schedule 1 of the 2019 Form 1040. Moving the Question from Schedule 1 of the 2019 Form 1040 to the first page of Form 1040 in 2020 is a sign of IRS enforcement escalation. Because IRS classifies virtual currency as an asset, if the answer is Yes, its disposal in an investment sales transaction requires reporting the transaction on Form 8949 – which was news to me”.

Peter W., Miami, Florida

I am a US taxpayer that willfully failed to comply with my tax and reporting obligations. In order to provide the peace of mind that my family deserves, I made the decision to come forward via the IRS Voluntary Disclosure Practice – managed by the IRS Criminal Investigation Unit. I knew that I had to cooperate in determining the correct tax liability and make a good faith arrangement to pay in full the tax, interest and penalties owed in order to avoid criminal prosecution and possible incarceration. The best decision that I ever made was to hire a US licensed CPA with an international tax practice – Foodman CPAs & Advisors – who recommended a US licensed tax attorney. They both worked together as a team and all the information and work done was protected under attorney-client privilege until the Voluntary Disclosure was made. At the end, I was able to come into compliance and avoid potential criminal prosecution. Eternally grateful”.