Electing to have the income of your International Corporation/IBC or LLC flow through the company directly to the shareholder/members so that the income is reported on your 1040, with greatly simplify your offshore tax reporting.
This process and our service includes obtaining an I.R.S. Tax I.D (EIN). for the Company as well as electing "Foreign Disregarded Entity (FDE) Status", for one member/shareholder companies, or "Foreign Partnership Status" for multi-member companies.
Initial I.R.S. filings include:
- Initial filing of form SS-4 to obtain an EIN for the company
- Initial filing of form 8832 to elect FDE or Foreign Partnership status
Once the International Entity obtains "pass-through" status, compliance becomes a reasonably simple matter and the complicated "Controlled Foreign Corporation (CFC)" filing (IRS Form 5471) is eliminated.
You will need to work with your Accountant or C.P.A. to file Form 8858
(detail) (single member FDE status) along with your 1040, and for the Foreign Partnership status, we recommend pro-actively filing a regular U.S. partnership form (1065) along with the required Form 8865
(detail) to fulfill the "offshore" filing requirement.
In addition to reporting the income of your International Corporation / IBC / LLC there are also reporting requirements for Foreign Financial Assets and Foreign Financial Accounts so you will probably also need to file the following forms, but please don't take our word for it, instead, please take advice from your accountant or C.P.A. (or ask us for a referral):
- Form 8938 (detail) - Statement of Specified Foreign Financial Assets
- Form FBAR/FinCEN Form 114 (detail) - Foreign Financial Accounts (online filing)
Also, once you become a client we will provide you with reminder notices in advance of the filing deadlines of the various forms.
PLEASE NOTE: Just because the assets are disclosed to the I.R.S. does not mean that the I.R.S. can seize the assets! Once outside the U.S.A., the I.R.S. becomes a creditor, just like any other creditor and must go through a VERY COMPLEX LEGAL PROCEDURE before it can hope to collect on any of these assets and will have no more success than the average (disappointed) creditor.