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" Did I really have to declare that to the IRS??? ". How to Come Back into the US Tax System. Town Hall Evening Dr Guillaume Grisel “Changes in the US Tax Laws: LL.M . (Cambridge), Ph.D ., T.E.P. How it impacts US Citizens Abroad” Attorney- at - law , Bonnard Lawson.

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Did i really have to declare that to the irs

"Did I reallyhavetodeclarethattothe IRS???"

How to Come Back into the US Tax System

Town Hall EveningDr Guillaume Grisel

“Changes in the US Tax Laws:LL.M. (Cambridge), Ph.D., T.E.P.

How it impacts US Citizens Abroad”Attorney-at-law, Bonnard Lawson


Swiss us estate planning in a nutshell

Swiss-US Estate Planning in a Nutshell

Pre-NuptialAgreements, Wills, Powers of Attorney, Etc.

For US Citizens Living in Switzerland


Did i really have to declare that to the irs1

"Did I really have to declare that to the IRS???"

How to Come Back into the US Tax System


The available options

The available options

What the IRS wantsyou to do:

  • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12)

    Or

  • "Streamlinedfiling" New StreamlinedFilingComplianceProcedures for Non-Resident U.S. Taxpayers(Sept. 2012)

    Whatmany people do…

  • "Quiet" or "Silent" Disclosure


The available options1

The available options

What the IRS wantsyou to do:

  • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12)

    Whatmany people do…


Ovdp what you have to pay

OVDP: What you have to pay

  • 8 years income tax + interests

  • Tax penalties

    • Accuracy-related penalties (20% of tax due)

    • Failure to file/pay penalties (up to 25% of tax due each)

  • FBAR penalty!

    • 27.5% of highest value of each offshore account during the 8 last years (!!!)

      Can be reduced to 12.5% or even 5% in some (rare) cases

  • Your lawyer and your CPA…


  • Ovdp up down sides

    OVDP: Up & down sides

    Upsides

    • Quasi-assurance of no criminal prosecution

    • Predictability of tax and penalties due

      Downsides

    • High penalties (in particular FBAR penalty)

    • Thorough audit by the IRS

    • High professional fees (CPA, lawyer)


    The available options2

    The available options

    What the IRS wantsyou to do:

    • "OVDP" Offshore VoluntaryDisclosure Program (2009  11  12)

      Or

    • "Streamlinedfiling" New FilingComplianceProcedures for Non-Resident U.S. Taxpayers(Sept. 2012)

    8


    Streamlined filing up down sides

    Streamlined filing: Up & down sides

    Upsides

    • Cheap and simple

      • 3 yearstaxonly (+ 6 years FBAR)

      • No penalties (onlyinterests)

      • Lowerprofessionalfees

        Downsides

    • Very restrictive eligibility conditions

      • Non-residentsince 1st January 2009

      • No return filedsince 2009

      • Max. $1500 /year due to the IRS

      • Lowlevel of compliancerisk

    • Lack of predictability: no assurance about criminalprosecution and penalties

    • All submissionsreviewed by the IRS

    9


    The available options3

    The available options

    What the IRS wants you to do:

    • "OVDP" Offshore Voluntary Disclosure Program (2009  11  12)

      Or

    • "Streamlined filing" New Filing Compliance Procedures for Non-Resident U.S. Taxpayers (Sept. 2012)

      What many people do…

    • "Quiet" or "Silent" Disclosure

    10


    Quiet disclosure up down sides

    « Quiet disclosure »: Up & down sides

    Upsides

    • Relatively cheap and simple (if accepted by the IRS…)

      • 6 yearstaxreturns and FBARs

      • Failure to file/pay penalties but no FBAR penalty

      • Lowerprofessionalfees

    • Generally no review by the IRS (but…)

      Downsides

    • Not consistent with IRS rules no assurance about criminalprosecution and FBAR penalties

    11


    Which way to pick

    Which way to pick?

    If you are in this situation… Considerthisway…

    • Eligible for Streamlinedfiling Streamlinedfiling

    • US resident OVDP

    • Sophisticated offshore tax planning OVDP

    • Very important tax due  OVDP

    • Risk of exchange of information OVDP

    • Other « high risk » situation OVDP

    • Only FBAR are missing File missing FBAR and explain

    • Other cases ?

    12


    Swiss us estate planning in a nutshell1

    Swiss-US Estate Planning in a Nutshell

    Pre-NuptialAgreements, Wills, Powers of Attorney, Etc.

    For US Citizens Living in Switzerland

    Dr. Guillaume Grisel

    LL.M. (Cambridge), Ph.D., T.E.P.

    Attorney-at-law, Bonnard Lawson


    Estate planning what for

    Estate planning: what for?

    • Makesure yourassetswillbetransferred to the people youwant

    • Minimizethe taxburden

    • Makeyour relatives’ life easier by simplifying the estateprocedures


    What will happen to my assets after my death

    Whatwillhappen to myassetsaftermydeath?

    • 1. Division of the marital property

    • Betweenthe survivingspouse and the estate

  • 2. Division of the estate

    Between the heirs (and the legatees)

  • + Taxes and expenses …


  • Division of marital property

    Division of marital property

    • Whatwillhappenif no planning isdone?

      • Whichlawwillapply? Swiss or US Law?

      • Law of the (last) common place of residence of the spouses.

      •  Swisslaw

      • How ispropertydividedunder the Swiss«default» regime?

      • Acquests sharing (Errungenschaftsbeteiligung, participation aux acquêts)

        • Assetsearnedduringthe marriage : split 50-50«Acquests»

        • Assetsacquiredbeforethe marriage:not split

        • Gifts / bequestsreceivedduring the marriage:not split«Ownassets»

    16


    Division of marital property1

    Division of marital property

    • What are youralternative planning options?

      By making a prenup / postnup, youcanchoosebetween:

      • Modifiedacquests sharing: The 50%-50% rulecanbechanged

      • Communityproperty(freedomas to whichassets are in or out of the community)

      • Separationof assets

      • US law if at least one spouseisUS


    Inheritance

    Inheritance

    • Whatwillhappenif no planning isdone?

      • Whichlawwillapply? Swiss or US Law?

        Law of the last place of residence of the deceased.

         Swisslaw

      • How isthe estatedividedunder the Swisslaw «intestacy» rules:


    Inheritance1

    Inheritance

    • Whatare your alternative planning options?

      By making a will or an inheritance agreement, youcanchoose to:

      • Modify the legalshares

      • Appoint new heirsForcedheirshiprights must berespected

      • Appoint legatees

      • Make an inheritance agreement

      • Give a usufruct to the survivingspouseOptions to « getaround » the forcedheirshiprights

      • Subjectyourestate to US law

        Pay attention to the conditions and consequences!

        • Appointment of an executor!

        • Trusts are recognized in Switzerland


    Inheritance2

    Inheritance

    Legalshares of the heirsatlaw:

    Forcedheirshiprights:


    Estate inheritance taxes

    Estate / inheritance taxes

    • US citizens living in Switzerland are potentiallyexposed to:

  • US federalestatetaxIf estate and previous gifts exceed $ 5.25 millions

  • Swiss cantonal inheritancetaxThe Canton in which the deceasedhadtheir last place of residence

    • No inheritancetax in Schwyz

  • US state estatetax?Possibly ,if US domicile not lost (e.g. US lawwill)

  • Swissfederalinheritancetax?Maybe in the (near) future …


  • In case of incapacity the new swiss rules

    In case of incapacity… the new Swissrules

    Whatwillhappenif no planning isdone?

    • Whocanact on mybehalf in the daily life?

    • Guardianisappointed by the Court if:

      - Individualcannotsafeguardhis/herinterests

      - An urgent matter must besettled

    • Spouse or civil partnerhas limitedpowerswith respect to:

      • Legalacts: only if «usuallynecessary» to satisfy the needs

      • Assets:limited to «ordinary» management

      • Mail : only if «necessary»

  • Health care


  • In case of incapacity the new swiss rules1

    In case of incapacity… the new Swissrules

    Whatwillhappenif no planning isdone?

    • Whocanmakehealth-care decisions on mybehalf?

      In order:

    • Guardianif he/shespecificallyreceivedthis power

    • Spouse or civil partnerif they live in the samehousehold or if he/sheprovidespersonal assistance

    • Descendants

    • Parentsif theyprovidepersonal assistance

    • Siblings


    In case of incapacity the new swiss rules2

    In case of incapacity… the new Swissrules

    What are your alternative planning options?

    • Daily life  Power of attorney in case of incapacity

      • Freedom to appoint the attorney youwant

      • Freedom to define the scope of theirpowersin 3 possible fields

        • Personal assistance

        • Management of the assets

        • Representationtowardsthirdparties

      • Possibility to appoint different attorneys in differentfields

  • Health care  Advanced medical directives

    • Early instructions for physicians

    • Appointmentof a representative for health-care purposes


  • Thank you very much for your attention

    Thank you very much for your attention

    Shouldyou have any questions…

    • Bonnard Lawson – International Law Firm

      Me Guillaume GRISEL

      Rue du Grand-Chêne 8

      CP 5463

      CH-1002 Lausanne

    • [email protected]

    • +41(0)21/348’11’88


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