You are currently browsing the Capital Comments weblog archives for the day 26. August 2009.
26. August 2009 by Dan Walkow, CFA, CMT.
One place the agency may be increasing its focus on is hedge funds, or at least, U.S. investors in off-shore hedge funds.
“Expect U.S. investors in off-shore hedge funds in places like the Cayman Islands, who failed to properly report earnings to the IRS, to be the next target of U.S. tax authorities,” said Shahzad Malik, partner at TroyGould in Los Angeles. “There are indications that the U.S. may be taking steps to target off-shore hedge funds by asking them about their U.S. partners and investigating their earnings.”
One indication for Malik that the IRS may be stepping up its enforcement of U.S. tax avoiders that are investors in off-shore hedge funds relates to a filing certain investors must make. The Treasury department has long required certain types of investors with foreign bank accounts and off-shore mutual funds to file a so-called “Report of Foreign Bank and Financial Accounts,” also known as an FBAR. Until recently, tax attorneys have generally understood that FBARs did not need to be filed by U.S. investors who owned interests in off-shore hedge funds.
US persons with foriegn bank or financial accounts want to pay attention here and file accordingly. Read the full story here.
Posted in Taxation | No Comments »