President Obama signed the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015” into law on July 31, 2015.

The new law also revamps the FBAR filing due dates. In the case of returns for taxable years beginning after December 31, 2015, the due date for FinCEN Form 114 will change from June 30 to April 15, which is in line with a taxpayer’s normal income tax return due date.  This means that FBARs for the 2016 calendar year will be due according to the new rules; FBARs  due for the 2015 calendar year will still be due June 30, 2016.

The new deadline will first affect FBARs due in 2017 for calendar year 2016. Thus, FBARs  due for the 2016 calendar year will now be due on April 15, 2017.

Certain taxpayers will also be allowed a maximum six-month extension to October 15.

The new law provides in part:

The due date of FinCEN Report 114 (relating to Report of Foreign Bank and Financial Accounts) shall be April 15 with a maximum extension for a 6-month period ending on October 15 and with provision for an extension under rules similar to the rules in Treas. Reg. section 1.6081–5…….”

The statute’s use of language providing the FBAR extension will have provision for an extension “under rules similar to the rules in Treas. Reg. section 1.6081–5” is great news.  It appears from such language that United States citizens or residents whose “tax homes and abodes“, in a real and substantial sense, are outside the United States and Puerto Rico may soon have an automatic extension to June 15 to file not only their US income tax return, but their FBAR as well.

In addition, it seems such persons can also be eligible for a longer extension to file the FBAR to October 15, simply by filing an extension that will apparently be similar to Form 4868.  We’ll keep you updated as FinCen and the IRS provide further information.  Since FBARs are e-filed, it would make sense that the extension requests will have to go through the BSA e-filing system.

Lastly! With regard to a taxpayer who is required to file an FBAR for the first time, the new law provides that the IRS may waive any penalty for failure to timely request, or file, an extension for the FBAR.

This year, you may receive one or more forms that provide information about your 2015 health coverage you had in 2015.  These forms are 1095-A, 1095-B and 1095-C.

Form 1095-B, Health Coverage, provides you with information about your health care coverage if you, your spouse or your dependents enrolled in coverage through an insurance provider or self-insured employer last year.

Here are the answers to questions you’re asking about Form 1095-B:

Will I get a Form 1095-B?

1. You will receive Form 1095-B – which is a new form this year – from your insurance provider if you had insurance for you or your family members.
2. The term “health insurance providers” includes insurance companies, some self-insured employers, and government agencies that run Medicare, Medicaid or CHIP.
3. You are likely to get more than one form if: (a) You had coverage from more than one provider or (b) You changed coverage or employers during the year or (c) If different members of your family received coverage from different providers

How do I use the information on my Form 1095-B?

1. This form provides information about your health coverage, including who was covered, and when the coverage was in effect.
2. If Form 1095-B, Part IV, Column (d), shows coverage for you and everyone in your family for the entire year, you can simply check the full-year coverage box on your tax return.
3. If you did not have coverage for the entire year, use Form 1095-B, Part IV, Column (e), to determine the months when you or your family members had coverage. If there were months that you did not have coverage, you should determine if you qualify for an exemption from the requirement to have coverage. If not, you must make an individual shared responsibility payment.
4. You are not required to file a tax return solely because you received a Form 1095-B if you are otherwise not required to file a tax return.
5. Do not attach Form 1095-B to your tax return – keep it with your tax records.

What if I don’t get my Form 1095-B?

1. You might not receive a Form 1095-B by the time you are ready to file your 2015 tax return, and it is not necessary to wait for it to file.
2. The information on these forms may assist in preparing a return, and you, however you can prepare and file your return using other information about your health insurance.
3. The IRS does not issue and cannot provide you with your Form 1095-B. For questions about your Form 1095-B, contact the coverage provider. See line 18 of the Form 1095-B for a contact number.

Depending upon your circumstances, you might also receive Forms 1095-A and 1095-C.

In February 2015, the Department of Homeland Security, U.S. Citizenship and Immigration Services issued a new Form I-407 for the abandonment of an individual’s United States green card (technically, “lawful permanent resident” status).

The new Form I-407 now provides a separate section to obtain the consent of parents of minors who relinquish the green card.  As in the old form, the new form asks for reasons for abandonment of the green card, but this question now appears to be more formally presented and appears to require a more detailed statement.

Giving It Up: No Fee — Yet!

Green card holders are taxed in the same manner as US citizens: they are both subject to US income tax on their worldwide income regardless of the source of that income and regardless of where the green card holder or citizen is living at the time it is earned.  However, they are not treated exactly the same when it comes to relinquishing their US status. The US citizen who renounces his US citizenship, must now pay a fee of $2,350 for the privilege of doing so.  On the other hand, there is still no fee for relinquishing one’s green card.

Internal Revenue Service is Notified When You Give Up the Green Card

Interestingly, the instructions to the new Form I-407 specifically advise applicants that: “The Department of Homeland Security is required to provide the Internal Revenue Service (IRS) with the names of individuals who choose to abandon their LPR status. If you file this form with us, we will provide only your name and the filing date to the IRS. (Internal Revenue Code section 6039G(d)(3))”.

Dire consequences can result if an individual does not properly relinquish his green card and file all required paperwork with the IRS.

Please note, that simply because the green card has expired for immigration law purposes, it does not likewise “expired” for US income tax purposes thereby relieving them of the duty to pay US taxes.

Your Name May Appear On the “Name and Shame” List

Code Section 6039G implements the so-called “Name and Shame” list.  This is a quarterly publication in the Federal Register by the IRS listing the names of individuals about whom the IRS has received information of a loss of citizenship during the preceding quarter.  This list is required to include the names not only of former U.S. citizens but of certain former green card holders. Under 26 U.S.C. § 6039G(d)(3), “the Federal agency primarily responsible for administering the immigration laws shall provide to the Secretary the name of each lawful permanent resident of the United States (within the meaning of section 7701 (b)(6)) whose status as such has been revoked or has been administratively or judicially determined to have been abandoned.”

The Federal Register provides that “for purposes of this listing, long-term residents, as defined in section 877(e)(2), are treated as if they were citizens of the United States who lost citizenship”. So, if you’ve held your green card for at least 8 of the preceding 15 tax years, your name will appear on the “Name and Shame” list when you return the card.

The Internal Revenue Service on December 10, 2014 issued the 2015 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Beginning on Jan. 1, 2015, the standard mileage rates for the use of a car, van, pickup or panel truck will be:

57.5 cents per mile for business miles driven, up from 56 cents in 2014

23 cents per mile driven for medical or moving purposes, down half a cent from 2014

14 cents per mile driven in service of charitable organizations

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.

Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after claiming accelerated depreciation, including the Section 179 expense deduction, on that vehicle. Likewise, the standard rate is not available to fleet owners (more than four vehicles used simultaneously).

You can find a full list of the Indian foreign financial institutions (FFI’s) that have registered for FATCA compliance and are in approved status as of August 25 2014 over here:

http://apps.irs.gov/app/fatcaFfiList/flu.jsf

The FFI List is updated the first day of each month. It includes all foreign financial institutions and branches that are in approved status at the time the list is compiled.

When you sell a ‘capital asset’, the sale usually results in a capital gain or loss. A ‘capital asset’ includes most property you own and use for personal or investment purposes. Here are 10 facts from the IRS on capital gains and losses:

1.  Capital assets include property such as your home or car. They also include investment property such as stocks and bonds.

2.  A capital gain or loss is the difference between your basis and the amount you get when you sell an asset. Your basis is usually what you paid for the asset.

3.  You must include all capital gains in your income. Beginning in 2013, you may be subject to the Net Investment Income Tax. The NIIT applies at a rate of 3.8% to certain net investment income of individuals, estates, and trusts that have income above statutory threshold amounts.

4.  You can deduct capital losses on the sale of investment property. You can’t deduct losses on the sale of personal-use property.

5.  Capital gains and losses are either long-term or short-term, depending on how long you held the property. If you held the property for more than one year, your gain or loss is long-term. If you held it one year or less, the gain or loss is short-term.

6.  If your long-term gains are more than your long-term losses, the difference between the two is a net long-term capital gain. If your net long-term capital gain is more than your net short-term capital loss, you have a ‘net capital gain.’ 

7.  The tax rates that apply to net capital gains will usually depend on your income. For lower-income individuals, the rate may be zero percent on some or all of their net capital gains. In 2013, the maximum net capital gain tax rate increased from 15 to 20 percent. A 25 or 28 percent tax rate can also apply to special types of net capital gains.  

8.  If your capital losses are more than your capital gains, you can deduct the difference as a loss on your tax return. This loss is limited to $3,000 per year, or $1,500 if you are married and file a separate return.

9.  If your total net capital loss is more than the limit you can deduct, you can carry over the losses you are not able to deduct to next year’s tax return. You will treat those losses as if they happened that year.

10. You must file Form 8949, Sales and Other Dispositions of Capital Assets, with your federal tax return to report your gains and losses. You also need to file Schedule D, Capital Gains and Losses with your return.

There are a few tax rules that affect everyone who files a federal income tax return. This includes the rules for dependents and exemptions. The IRS has seven facts on these rules to help you file your taxes.

1. Exemptions cut income.  There are two types of exemptions: personal exemptions and exemptions for dependents. You can usually deduct $3,900 for each exemption you claim on your 2013 tax return.

2. Personal exemptions.  You can usually claim an exemption for yourself. If you’re married and file a joint return you can also claim one for your spouse. If you file a separate return, you can claim an exemption for your spouse only if your spouse had no gross income, is not filing a return, and was not the dependent of another taxpayer.

3. Exemptions for dependents.  You can usually claim an exemption for each of your dependents. A dependent is either your child or a relative that meets certain tests. You can’t claim your spouse as a dependent. You must list the Social Security number of each dependent you claim. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information, for rules that apply to people who don’t have an SSN.

4. Some people don’t qualify.  You generally may not claim married persons as dependents if they file a joint return with their spouse. There are some exceptions to this rule.

5. Dependents may have to file.  People that you can claim as your dependent may have to file their own federal tax return. This depends on many things, including the amount of their income, their marital status and if they owe certain taxes.

6. No exemption on dependent’s return.  If you can claim a person as a dependent, that person can’t claim a personal exemption on his or her own tax return. This is true even if you don’t actually claim that person as a dependent on your tax return. The rule applies because you have to right to claim that person.

7. Exemption phase-out.  The $3,900 per exemption is subject to income limits. This rule may reduce or eliminate the amount depending on your income. See Publication 501 for details.

Reporting on a California State Bar Tax Section Meeting, Tax Notes reports that the IRS will soon (as early as the week of 11/11/13) ) “begin examining U.S. taxpayers suspected of holding undeclared accounts in Indian banks, according to Nicholas Connors, a supervisory revenue agent” with SB/SE.

Some excerpts:

After receiving account information from Indian banks, the IRS has about 100 Indian bank account cases that it is sending out for examination across the country, he said.

“I think California, because of the large Indian population, is going to get more than its fair share of cases,” Connors said. “Within the Northern California/Bay Area, we’re scheduled to pick up 30 or 40 of those.”

“Looking ahead, the offshore bank investigations are just going to grow,” Connors said. In addition to India, “Israel is on the list of banks that is providing information to us, and from there it just keeps going on and on,” he said. “Within Examination, there’s talk that this could someday become a work issue for every single revenue agent in SB/SE where everyone will be working some type of offshore case.”

Regarding Quiet Disclosures, Tax Notes reports:

The SEP team continues to examine quiet disclosures as well as cases regarding taxpayers who opted out of the IRS offshore voluntary disclosure program (OVDP), said Connors. “The guidance we’re getting on quiet disclosures has been extremely harsh,” he said. “Essentially those taxpayers walked past compliance three times: They didn’t file correctly the first time, they didn’t come in under voluntary disclosure, and now they’re trying to hide it by slipping it in through an amended return. Don’t expect much leniency if we have a quiet disclosure case; agents are being told to be aggressive.”