Latest news with #Department of Justice
Forbes
2 days ago
- Business
- Forbes
IRS Taxes Apply After You Leave U.S. & Departure Can Trigger More
United States of America permanent resident card, green card, displayed with a US flag in the ... More background and a passport in the foreground. Immigration concept. A recent article notes that denaturalized citizens forced to exit could still face exit tax. The author flags Department of Justice plans for denaturalization proceedings against naturalized citizens who obtained citizenship through fraud or misrepresentation, or who are national security threats. There may be arguments that the tax should not apply in such cases, but if it does--or if you are leaving voluntarily--how does it work? If you leave the U.S. voluntarily or because the government makes you, how could you still be taxed by the IRS? Several ways, actually. First, if you are a U.S. citizen, the mere fact that you live abroad—even forever—does not mean that you avoid U.S. taxes or the annual slog to file IRS returns. You might be paying tax in two places, to the IRS and to your country of residence. If you want to stop paying U.S. tax, you have to go a step further and give up your passport or your green card. Moreover, any income tax you owe from the past is still due, and so are taxes on income you earned up to the date of your departure. But more surprisingly for many, the U.S. has an 'exit tax' that can hit you, depending on your assets and income. The exit tax applies only to U.S. citizens and to longer term (8 years or more) green card holders. The exit tax is like an estate tax on the gain in your assets, even though you are not actually selling anything. It is the IRS's last chance to tax you. Citizens and green card holders leave for many reasons. Common reasons for renouncing are family, tax and legal complications for people who generally live outside the United States. They can include the pressures of America's global tax reporting and compliance, including FATCA, the Foreign Account Tax Compliance Act. It is easy to think that leaving the U.S. to live abroad means no longer paying IRS taxes—especially if you are paying taxes somewhere else. The Exit Tax is computed as if you sold all your assets on the day before you expatriated, and had to report the gain. Net capital gains can be taxed as high as 23.8%, including the 3.8% net investment income tax that applies to some types of gains. For a time, Congress talked of hiking the exit tax to 30% after Eduardo Saverin of Facebook decamped for Singapore. Triggers for Exit Tax There are three triggers for the Exit Tax, and any one of them will make you a covered expatriate. First, is your net worth over $2 million? This is the aggregate net value of worldwide assets. It is not just your U.S. assets. For a married couple, each spouse's net worth is calculated separately. If they own their assets relatively equally, a married couple could have a total net worth of up to $4 million without triggering the Exit Tax. On the other hand, if one spouse owns most of the assets, that spouse could be a covered expatriate, even if the other spouse owns significantly less than $2 million of assets. Thankfully, some couples can gift assets to each other to bring both spouses' net worth below $2 million. If the spouse receiving the gifts is a U.S. citizen, these gifts may escape U.S. gift tax. On the other hand, if the spouse receiving the gift is not a U.S. citizen, spousal gifts may be subject to gift tax even if the spouse receiving the gift is a U.S. green card holder. For 2025, there is an annual exclusion of $190,000 for gifts to non-citizen spouses. If you need to transfer more than that amount to your spouse to bring your net worth to below $2 million, you would have to rely on your unified tax credit to avoid gift tax, or you would need to plan in advance to make the transfers over multiple years before expatriating. Second, is your average net annual income tax liability over $206,000? This is not your taxable income, but your tax liability on that income. If you are married and filing taxes jointly, you must use your net tax liability on your joint returns, even if only one of you is expatriating. This trigger can sometimes be avoided with careful planning. Filing separate tax returns (not joint returns) often makes sense. As the trigger is your average tax liability over the last five years, you may need to file separately for several years before you expatriate. The third way you can be a covered expatriate is if you do not (or cannot) certify five years of U.S. tax compliance. If you haven't filed, or haven't filed properly—say you didn't report an offshore bank account—you will need to fix that before you are in compliance. Fortunately, you can amend your prior tax returns (and other forms) and simultaneously also file an IRS Form 8854 to expatriate. In effect, you sign your Form 8854 last, after you've signed the amended tax documents. What if you trip any of these tests? You need to calculate the Exit Tax. If you are not a covered expatriate, it does not matter. If you are a covered expatriate, the first $890,000 of gain is shielded from the Exit Tax for 2025 expatriations. For spouses who expatriate, each spouse files a separate Form 8854, and each spouse can exclude $890,000 of gain (or nearly $1.4 million of gain combined). The Exit Tax on certain assets, notably 401(k) plans, can be deferred. Thus, you may not have to pay the Exit Tax on the plans' values when you expatriate, and would only pay U.S. tax on the 401(k) plan as distributions are made out of the plan. However, the tax on the future distributions is generally 30%, and you cannot claim a treaty benefit to reduce the tax. For most other assets, you can make an irrevocable election to defer payment on the Exit Tax owed. Still, the IRS wants a bond or adequate security for any deferred Exit Tax, and interest accrues until it is paid. Even if a covered expatriate has less than $890,000 of gain in his or her assets, being a covered expatriate has negative consequences. If you have friends or family in the U.S., being a covered expatriate could result in your gifts to them coming with a tax bill that they would have to pay. Even if your Exit Tax may be slight, or you would not owe any Exit Tax (for example, because of the $890,000 gain exclusion), avoid being a covered expatriate if you can. A goal of many expatriating taxpayers is to have a final, clean break from the U.S. tax system. Certifying five years of tax compliance can be difficult. U.S. taxes are complex, and if you live or have assets abroad, there are extra levels of complexity. You must report your worldwide income, wherever it is generated. And FATCA requires an annual Form 8938 filed with the IRS if your foreign assets meet a threshold. Then there are annual foreign bank account reports called FBARs. They carry big civil and even potential criminal penalties if you fail to file them or file them falsely. The civil penalties can consume the entire balance of an account, so be careful.
Fox News
6 days ago
- Politics
- Fox News
Epstein victims numbered over 1,000 – far more than previously known, federal investigators say
Jeffrey Epstein had more than 1,000 victims over more than two decades as a sex trafficker, according to federal investigators – far more than prosecutors alleged in his 2019 indictment and how many women have come forward with civil lawsuits combined. In a two-page memo published last week, the Justice Department and FBI said a review of the case found Epstein had "no incriminating 'client list,'" that no additional files connected to the investigation could be released and that his death was indeed a suicide, as prior federal investigations found. "Consistent with prior disclosures, this review confirmed that Epstein harmed over one thousand victims," the memo reads. "Each suffered unique trauma. Sensitive information relating to these victims is intertwined throughout the materials. This includes specific details such as victim names and likenesses, physical descriptions, places of birth, associates, and employment history." A victims' compensation fund set up for Epstein's accusers – some as young as 14 years old at the time of their abuse – paid out more than $120 million to 150 people as of August 2021, according to FOX Business. Details about the hundreds of additional victims remain unclear. The FBI declined to comment. Read the memo: Epstein accomplice Ghislaine Maxwell was convicted of trafficking in a trial of her own. She is appealing the verdict, and until she exhausts her legal options, neither the FBI nor federal prosecutors are expected to release criminal evidence that hasn't already surfaced in court. However, in the memo, authorities said that most of the unreleased files pertain to minors or victims who appear to be minors, and that more than 10,000 videos and images included "illegal child sex abuse material and other pornography." Read Jeffrey Epstein's 2019 federal indictment: "Much of the material is subject to court-ordered sealing," the memo reads. "Only a fraction of this material would have been aired publicly had Epstein gone to trial, as the seal served only to protect victims and did not expose any additional third-parties to allegations of illegal wrongdoing. Through this review, we found no basis to revisit the disclosure of those materials and will not permit the release of child pornography." Epstein died in federal custody in 2019 while awaiting trial on sex trafficking charges. Federal investigators say he hanged himself in his jail cell, but his brother has disputed that version of events. His most prominent accuser, Virgina Giuffre, died of suicide earlier this year. It's thanks to her own lawsuits that thousands of the publicly available documents regarding Epstein's crimes came to light.
BreakingNews.ie
6 days ago
- Politics
- BreakingNews.ie
Palestinian GAA players are refused visas to visit Ireland
A group of young GAA players from Palestine have been refused visas to visit Ireland this month. Visa applications for 47 members of GAA Palestine were rejected seven days before their visit was due to begin. Advertisement GAA Palestine said it was "deeply disappointed" with the refusal decision and would "immediately" appeal. "Our Irish visa applications for the GAA Palestine summer tour has been refused by the Irish immigration service," the organisation said in a statement on Instagram on Wednesday. "Our hearts right now are with the 33 young hurlers and 14 mentors who are so looking forward to being welcomed to Ireland next week. Against all odds we're doing all we can to make this tour happen. We're not giving up hope." Sinn Fein said it was "incomprehensible" a resolution could not be found to address any issues with visa applications. Advertisement People Before Profit described the visa rejections as an "utter disgrace". Ireland Government accused of putting 'wrangling' over sic... Read More A spokesman for the Department of Justice said it operated "a rule-based visa system" with each application "decided on its own merits". "Verifying an application is an important part of our immigration system and the checks involved can take time to complete," he told The Irish Times. "It is important to note that when minors are seeking to travel to Ireland, a visa officer must be satisfied that the children are travelling in the company of their parents or an appropriate guardian. "Documents such as birth certificates and consent letters are regularly requested to establish the relationship between a child and the adult they are travelling with."
The Guardian
21-05-2025
- Politics
- The Guardian
DoJ moves to cancel police reform settlements with Minneapolis and Louisville
The justice department moved on Wednesday to cancel a settlement with Minneapolis that called for an overhaul of its police department following the murder of George Floyd, as well as a similar agreement with Louisville, Kentucky, after the death of Breonna Taylor, saying it does not want to pursue the cases. The move shows how the civil rights division of the justice department is changing rapidly under Donald Trump, dismantling Biden-era work and investigating diversity programs. It also comes amid pressure on the right to recast Floyd's murder, undermine diversity efforts and define liberal-run cities like Minneapolis as crime-ridden. Following a scathing report by the justice department in 2023, Minneapolis in January approved a consent decree with the federal government in the final days of the Biden administration to overhaul its training and use-of-force policies under court supervision. The agreement required approval from a federal court in Minnesota. But the Trump administration was granted a delay soon after taking office while it considered its options, and on Wednesday told the court it does not intend to proceed. It planned to file a similar motion in federal court in Kentucky. 'After an extensive review by current Department of Justice and Civil Rights Division leadership, the United States no longer believes that the proposed consent decree would be in the public interest,' said the Minnesota motion, signed by Andrew Darlington, acting chief of the special litigation section of the Justice Department's Civil Rights Division. 'The United States will no longer prosecute this matter.' Trump has generally opposed the use of consent decrees, through which the government has threatened lawsuits against police forces and then entered into reform agreements. Harmeet Dhillon, the Trump ally who oversees the now-gutted civil rights division of the justice department, said in a statement that 'overbroad police consent decrees divest local control of policing from communities where it belongs, turning that power over to unelected and unaccountable bureaucrats, often with an anti-police agenda.' The department said it would also be ending investigations or retracting findings of constitutional violations into police departments in Phoenix, Arizona; Trenton, New Jersey; Memphis, Tennessee; Mount Vernon, New York; Oklahoma City, Oklahoma; and the Louisiana state police. The justice department announced its decision just before the five-year anniversary of the murder of Floyd, a Black man. Then officer Derek Chauvin, a white man, used his knee on 25 May 2020, to pin Floyd to the pavement for 9.5 minutes in a case that sparked protests around the world and a national reckoning with racism and police brutality. In Louisville, the consent degree came after Breonna Taylor, a Black woman, was killed by police when they forced their way into her apartment in 2020. Similar to Floyd, Taylor's death sparked protests. The decree had not yet been approved by a judge. However, no immediate changes are expected to affect the Minneapolis police department, which is operating under a similar consent decree with the Minnesota human rights epartment. It also comes as rightwing figures have pushed for a pardon for Chauvin, who was convicted of state and federal charges. Democratic governor Tim Walz said last week that the state should be prepared for a federal pardon from Trump, but that he had no indication one was forthcoming. 'If Donald Trump exercises his constitutional right to do so, whether I agree – and I strongly disagree with him – if he issues that pardon we will simply transfer Derek Chauvin to serve out his 22-and-a-half years in prison in Minnesota,' Walz said, according to the Minnesota Star Tribune. 'So, no indication whether they're going to do it or not, but I think it behooves us to be prepared for it. With this presidency, it seems like that might be something they would do.' Minneapolis police chief Brian O'Hara reiterated at a news conference on Tuesday that his department would abide by the terms of the federal agreement as it was signed, regardless of what the Trump administration decided. The city in 2023 reached a settlement agreement with the state human rights department to remake policing, under court supervision, after the agency issued a blistering report in 2022 that found that police had long engaged in a pattern of racial discrimination. 'We will implement every reform outlined in the consent decree,' Minneapolis mayor Jacob Frey said in a statement. Louisville mayor Craig Greenberg said on X that the city would move forward with its own reform plan, despite the likely dismissal of the proposed decree. The city will take community input and select an independent monitor, putting in place accountability and transparency measures to rebuild trust in public safety, Greenberg said. 'I made a promise to our community, and we are keeping that promise with this agreement,' he continued. Associated Press contributed reporting
