So this woman currently in her 80s from Argentina became a citizen of the US in the 1980s. In the late 90s early 00s, her father left her 4 million in a Swiss Bank account. She did her own taxes at the local library and didnt know she had to report her foreign bank account to the IRS. The IRS aknowledges there was no attempt to defraud. When she found about about the requirement, she reported the account. By the time she found out about it, a couple of years passed. So the IRS is charging her 50% of her account, or 2.1 million for not reporting the account.
She is trying to sue the IRS over excessive fines in the 8th amendment. The IRS says it isnt a fine, It is a “civil penalty”.
Maybe this is why the dems need 87000 new armed IRS employees so they can go after more grandmas.
Everyone, on both sides of the aisle should condemn this. Was this money earned in the US? Looks like no, as it was inherited from her father who lived in Argentina. So why should the irs get one penny from money that was never in the US to begin with?
The only way I would support the IRS is if they could show the state or fed was giving her some type of subsistence and they were merely taking the subsistence back because she wasnt entitled having so much money in a bank account overseas.
They pull this sort of wordsmithing in Colorado too. We passed a constitutional amendment that new taxes need to pass by a majority vote of the people. So now politicians don’t try to implement taxes. They just assess “fees”.
#1 Income derived from outside the confines of the US are still reportable as income.
#2 How the money passed from the father to the daughter is important because it determines whether the amount counts as income, a gift, or an inheritance. If an inheritance there is an exclusion amount. And no the father being in Argentina doesn’t impact this process as it is something applicable to the daughter, a US citizen. And a second no, just because it passed from the father who died to the daughter does not mean it passes as an inheritance.***
*** I’m in the process of learning about this as my wife’s mother passed away a few months ago and my wife is the executor of her estate. As a co-owner of one of her mothers larger accounts used to pay end of life medical bills - that account (for tax purposes) ended up being my wife’s money with no tax consequences since she was a co-owner. Other assets are being placed in a trust. So once all the bills are paid we have two situations:
Money that my wife “owns”, paid from that account have, have to be reported on an IRS Form 709 for gift taxes meaning there is a tax liability.
Money that exists in the trust and paid from the trust, qualify for the inheritance tax exemption (which currently over 10 Million well above the range we are talking about).
So once all the accounts are closed and bequeaths taken care of and any remaining money ready to be distributed to her siblings, she will then that will happen in two ways: a gift portion and an inheritance portion.
NOTE OF ADVICE: Have a good estate lawyer and CPA assist with the process as it is confusing and technical about what assists fall into what category. Also establish the Trust fund with the bank prior to the passing of the elder, it makes life easier. My MIL didn’t, which means we had to wait weeks for official death certificates before being able to create the account.
With that said, if she is the one that contacted the IRS to remedy the error, then good faith action should mean that the IRS waives the late fees and only charges to initial amount.
She is an American citizen and it is income for HER.
One of the main issue may be if the father took steps to ensure that it was passed to her in accordance with the laws where she is a citizen. If he didn’t do that (and with $4 million he could have) then it may be income for her.
@JayJay said he’s actually researching some of the background. Maybe he will share some of the additional information not presented in the YouTube.
How is he any different than listening to an article on NPR, MSNBC or even Fox News? He is a member of the Bar in good standing in the state of Michigan where I am from. I guess if you cant win on the points, shoot the messenger.
My contention is not on whether the IRS is within the law or not. If they are, the Law should be changed. We have so many laws that are on the books that the average person can not understand or comply with them without a team of lawyers. The US Government should not try to make everyone a criminal.