The IRS has announced that the 2020 Annual Tax Filing Season (ATFS) will open on January 27, 2020. The IRS strongly encourages electronic filing and preparers are required to electronically file returns they prepare for compensation.
 Source: Taxpayer Advocate Service NTA Blog: Highlights of the Taxpayer First Act and Its Impact on TAS and Taxpayer Rights, November 21, 2019
A. Depending on the tax or information return that the taxpayer has failed to file, and the surrounding circumstances arising to the transgression, a number of outcomes could arise. The IRS usually considers whether the taxpayer had reasonable cause for the failure to file the return, and whether the taxpayer acted wilfully or non-wilfully.
Q. I haven’t filed IRS forms to report my trust. What should I do?
A: The delinquent international information return submission procedures are available for outstanding international information return Forms including 5471, 3520, 3520-a, 8865, 8938 but excluding Form FinCen114 The procedures are used where there is ‘reasonable cause’ for not having filed. Principles underpinning what constitutes ‘reasonable cause’ are longstanding, as are procedures concerning establishing ‘reasonable cause’.
Q. What if I haven’t filed a Foreign Bank Account Report (FBAR)?
A: The Delinquent FBAR Submission Procedures can be used to file delinquent FBARs under the following circumstances:
Q. How can I pay the IRS?
A. Here are some of the ways you can make a payment to the IRS:
Q. Can I claim the Qualified Business Income Deduction for business income I have earned in New Zealand?
A: No. Qualified Business Income (QBI) must be income earned from US sources. Foreign income is not income earned from US sources and therefore doesn’t constitute QBI. Accordingly, the deduction is not available.
 We strongly recommend professional advice be sought from us prior to filing outstanding international information returns.
 Form FinCen114 is not available for filing under the Delinquent International Information Return Submission Procedures.
On December 24, 2019 Inland Revenue released QB19/15 and QB 19/16 – Property held in trust and rented for short-term accommodation to cover the scenarios where:
Should property, for example a residence, be rented out by a beneficiary of a trust then the beneficiary is the one that derives the income.
A common example of this occurring is where a family residence is held in a NZ family trust. The trustees of the trust are the legal owners of the trust property. Frequently this is the husband and wife. However, the beneficiaries of the trust might be their adult children for whom the residence is being held in trust for.
Did You Know?
You can carry back foreign tax credits one year, and if you qualify to do so, you must carry these back to the earlier year, before applying the tax credits to the class of income to which they would otherwise attach in the current year.
The Consolidated Appropriations Act 2020 (the CA Act) was signed into law in Washington on 23 December 2019.
Expired tax provisions to be reinstated
Retirement plan provisions
 Some US tax rules are temporary and expire at a specific date (usually the 31st of December in a given year), unless extended. Extension is frequently retroactive. Tax extenders are not a new practise and tend to occur habitually in US tax law.
 Under the TCJA, children’s unearned income was taxed at the applicable trust income tax rate relevant to the class of income. The repeal of these provisions means that children’s unearned income is again taxable as per the taxpayer’s highest marginal income tax rate.
 If itemizing deductions
 A taxpayer needs to itemize using Schedule A to claim medical expenses of more than 7.5% of AGI; most taxpayers will get greater benefit from taking the Standard Deduction rather than itemized deductions.
 Previously a beneficiary of an inherited IRA had their own lifetime over which to make withdrawals from an inherited IRA.
 Prior to the introduction of this provision, part time workers who worked less than 1000 hours per year didn’t qualify to participate in an employer’s 401-k plan.
 A ‘required minimum distribution’ is the minimum amount a taxpayer must withdraw from a traditional IRA once the taxpayer reaches a certain age – previously 70.5 years. The RMD is derived from actuarial tables.
We are highly experienced in the areas of New Zealand and United States taxation specifically for people who have relocated from the United States to New Zealand or vice-versa.
In addition we provide the following services:
Call our Client Relationship Manager to make an appointment: +64 27 512 0365.