U.S. tax planning that is responsive, strategic, and effective.
Introduction
Bob Ward has practiced law as a tax lawyer for more than 40 years. He is a member of the Bars of Maryland, California, and Washington and licensed as a Practitioner of Foreign Law by the Law Society of British Columbia.
Bob provides integrated tax, business, estate, and asset protection planning and advice for United States domestic, as well as foreign, individuals and companies and represents taxpayers before the Internal Revenue Service and the United States Tax Court. He focuses on providing tax planning advice to owners of privately-held businesses, integrating business planning with their personal estate planning needs. He also assists clients in establishing foreign asset protection trusts, public and private tax-exempt charitable organizations, and all forms of U.S. business entities.
In addition to practicing law full-time, Bob taught as an adjunct faculty member at Antonin Scalia Law School (formerly George Mason University School of Law) in Arlington, Virginia for 29 years. He taught three courses at a the Law School: Business Planning, Estate and Gift Taxation, and Estate Planning. He has also taught Corporate Tax at Golden Gate University, Income Taxation of Trusts and Estates at the University of Baltimore School of Law, and United States Taxes in the graduate tax program at the University of British Columbia School of Law.
Bob is a frequent lecturer at continuing education programs and is the author of over fifty articles on various tax topics appearing in the Journal of Taxation, Tax Management International Journal™, Taxes, Beyond Numbers, The Practical Lawyer, The Practical Tax Lawyer, Practical Tax Strategies, and The Journal of Asset Protection Planning.
Bob has been recognized by Washingtonian Magazine as one of the Washington D.C. area’s top estate planning attorneys and by Super Lawyers® Magazine as one of Maryland’s top tax lawyers.
Contact Us
1100 One Bentall Centre 505 Burrard Street Vancouver, BC V7X 1M5
rward@wardtaxlaw.com
(604) 331-8323
Areas of Practice
U.S. Tax Planning for Foreign Businesses and Individuals
Foreign individuals with U.S. businesses can fall into the U.S. tax system with surprising ease. Absent relief provided by a tax treaty between the United States and the foreign investor’s country of residence, income from U.S. sources will be subject to a 30% withholding rate. Despite these traps, numerous strategies exist for inbound investment which will avoid or minimize U.S. income and estate tax taxation.
Foreign Investment in U.S. Real Estate
When a foreign individual or company buys U.S. real estate, the purchaser is buying admission to the U.S. tax system. Rental income will be subject to a 30% rate of withholding on gross rental income. For an individual, ownership of U.S. property at death will result in a U.S. estate tax even if the property is owned through a business entity (other than a properly structured corporation). However, elections available under U.S. revenue laws can eliminate withholding and investment through appropriate entities can avoid U.S. estate tax.
Domestic and Cross-Border Estate Planning
The United States imposes both Federal and in, some cases, state estate taxes. In combination, the effective rate of tax approaches 50% and is imposed on the entire fair market value of the decedent’s assets (not just unrealized gains). Moreover, the same estate tax is imposed each time assets move from one generation to the next and, often, from one person to the next. Fortunately, there are many strategies to avoid or minimize U,S, estate taxes. For foreign individuals, implementation of those strategies requires careful coordination with foreign revenue laws.
Expatriation Tax Planning
Individuals born abroad to U.S. parents are U.S. citizens and subject to U.S. income and estate taxation and information-reporting obligations. Individuals born in the United States are also U.S. citizens subject to the same compliance obligations without regard to the nationality of the person’s parents or length of time in the U.S. All U.S. persons–U.S. citizens and permanent residents (green card holders)–are subject to U.S. income taxation and information reporting obligations (such as FBAR filings) even if no longer living in the United States. Despite these traps, numerous strategies exist for inbound investment which will avoid or minimizeFor many U.S. persons, the ultimate tax planning strategy is to renounce U.S. citizenship and terminate lawful permanent residency. By taking the appropriate actions, individuals can leave the U.S. tax system when they leave the United States. However, doing so can trigger an exit tax. With proper planning, U.S. persons can successfully expatriate while avoiding, minimizing, or at least deferring the U.S. exit tax.
Offshore Voluntary Compliance and Streamlined Disclosure Programs
Since 2009, the United States has offered special “amnesty” programs for U.S. persons who come forward voluntarily to address past noncompliance with U.S. obligations to report and pay tax on foreign assets and income. Those programs have changed dramatically over the years and are more narrow now than in the past. However, opportunities to come into compliance without suffering the full force of penalties on foreign assets and income persist.
Pre-Immigration U.S. Tax Planning
For those who plan to move to the United States, effective tax planning begins before arrival. That planning begins with considering how the United States taxes income and assets. Properly structured pre-immigration trusts can avoid U.S. gift and estate taxes. Trusts funded five years before arrival can also avoid or minimize U.S. income taxes. Pre-immigration U.S. tax planning necessarily requires coordination with foreign revenue laws which in effect at the time the U.S. tax planning begins.
Tax Planning and Compliance for U.S. Beneficiaries of Foreign Trusts and Estates
U.S. beneficiaries of foreign trusts and estates have special U.S. tax compliance obligations. Design and operation of the foreign trust can meaningfully improve U.S. tax treatment of beneficiaries receiving distributions of trust income and capital. Severe penalties apply to failures to report those distributions. U.S. reporting obligations may apply not only to the U.S. beneficiaries of those trust, but also to the foreign trustees.
Tax Controversy
Even the most careful tax planning may be scrutinized by the U.S. Internal Revenue Service. Because communications between tax advisors and their clients are often presented as evidence of a taxpayer’s motives, preparation for tax controversies begins at the planning stage, Competent representation determines the outcome of examinations of a taxpayer’s returns, Adverse determinations may be reversed on appeal when a practitioner is familiar agency procedures and practices.
Corporate Transparency Act
Newly formed U.S. entities must register with FinCEN within 30 days of formation. Existing entities must register before January 1, 2025. It is imperative to know which businesses are subject to these registration requirments, what information about the businesses and their owners must be disclosed, and — most importantly — who can access this information and for what purposes.
“Anyone may so arrange his affairs so that his taxes shall be as low as possible....”
– U.S. Supreme Court Justice Learned Hand, Helvering v. Gregory, 293 U.S. 405 (1935)