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APPEALS COURT TO FOREIGN TAXPAYERS: FILE ON TIME OR LOSE YOUR DEDUCTIONS
February 18, 2008
Back in 2006, the Tax Court cut a break to foreign taxpayers who have neglected their U.S. tax filings. Tax Regulations require tax returns of non-U.S. taxpayers to be filed within 18 months of their due date, or all deductions will be disallowed - a rather harsh penalty that makes such taxpayers taxable on their U.S. gross income. The Tax Court overturned the regulations, saying that the deductions were allowed as long as the taxpayers come forward before the IRS comes after them.
Well, so much for that. Last week the Third Circuit Court of Appeals overturned the Tax Court and said the regulations are valid, Tax Analysts reports.
Non-U.S. taxpayers that have any U.S. activity should be very careful to file all of their returns timely. If they don't, it could get expensive.
UPDATE: The TaxProf has more.
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