How to screw a Finn with a hotdog stand in Finland
Penalties layered upon penalties–this is the culture of the IRS. And don’t forget–the IRS is now responsible for health care. If you live outside the US, The IRS will give a penalty first for not having reporting yourself, and then disallow your normal deductions, also.
If you are a citizen of Finland, living in Finland, but once have had a US residence visa (greencard), you are required to file US tax forms until you have formally filed the US IRS form I-407. If not, the potential IRS penalties could be bankrupting.
For example, if you should have a business (such as a Finnish hot dog stand), you are required to file either form 5471 and/or form 8865.
Form 5471 ʹto report that a Finnish citizen living in Finland is a 10% or more shareholder in a Finland corporation. Used by certain U.S. citizens and residents who are officers, directors, or shareholders in certain foreign corporations. The form and schedules are used to satisfy the reporting requirements of sections 6038 and 6046, and the related regulations.
Form 8865 is similar. God only knows which form should be filed, or if both forms need to be filed.
Failure to file Form 5471 penalties: $10,000 failure to file penalty per year per person required to file.
A $10,000 penalty is imposed for each annual accounting period of each foreign corporation for failure to furnish the required information within the time prescribed. If the information is not filed within 90 days after the IRS has mailed a notice of the failure to the U.S. person, an additional $10,000 penalty (per foreign corporation) is charged for each 30-‐day period, or fraction thereof, during which the failure continues after the 90-‐day period has expired. The additional penalty is limited to a maximum of $50,000 for each failure
Form Recordkeeping Learning about the law or the form Prepare, send
5471 82 hr., 45 min. 16 hr 14 min. 24 hr., 17 min.
Sch. J (5471) 3 hr., 49 min. 1 hr., 29 min. 1 hr., 37 min.
Sch. M (5471) 32hr., 3 min. 12min. 43 min.
Sch. O (5471) 10 hr., 45 min. 24 min. 35 min
The hotdog stand owner is required to file forms requiring (much) more than 150 US tax accountant hours. If he doesn’t do it–can’t do, or won’t do it, the penalty can be $50,000 per failure. That sounds bad. But it would be great to just have closure.
What did you say? No closure?
That’s right. It doesn’t end there.
If an individual shall fail to file forms 8865 or 5471, the individual must reduce his foreign income deduction by 10% for each 8865 and 5471.
reference form 1116 line 12 instructions p 16 (middle section) http://www.irs.gov/pub/irs-pdf/i1116.pdf
The IRS dominates the judicial, executive, and legislative branches. The IRS runs your healthcare, and determines every aspect of your life. The IRS has the powers of legislative, executive, and judicial branches. And few, if any of the Bills of Rights apply.
Don’t forget. We are talking not only about the situations inside USA, we are talking about the situation in a hot dog stand in Finland, owned by a citizen of Finland who lives in Finland.