web analytics
March 29, 2015 / 9 Nisan, 5775
At a Glance
Blogs
Sponsored Post


Surviving an IRS Audit in Israel

Don't let the IRS make you unhappy!

Don't let the IRS make you unhappy!

Almost every American living in Israel is aware of the legendary “additional child tax credit” (ACTC) “tax credit/refund” of $1000 per child.

Over the years I’ve written about it on the blog; The IRS Taxman comethThe Apocalypse: Feds arrive in Israel, With Liberty and Passports for all, as well as the importance of filing the FBAR (Foreign Bank Account Report) — disclosure of all Financial Holdings and Bank accounts outside the United States that belong to American citizens that are in excess of $10,000.

Therefore, almost any American who has moved to Israel and has a pension fund or keren hishtalmut– is required to file the US FBAR.H

However….because there exists an entire underground “industry” of return preparers who have filed fraudulent returns, fabricating earned income in order for their clients to claim child credits, and have retroactively filed for tax credit refunds after children have been naturalized (not American by birth, but by being brought to the USA and made citizens there) — many tax practitioners in Israel have stated that the IRS has begun scrutinizing (read: AUDITING) all returns of Americans in Israel claiming the ACTC.Thankfully I have not (yet?) been audited, but with the IRS targeting everyone  — I am putting together this list on how to proactively prepare for an audit.

Step 1: Take a deep breathe, count to ten, and don’t panic. 

Assuming you used a reputable tax-preparer, didn’t count a kollel stipend as income,  and you didn’t retroactively try to claim the refund after bringing your kids to the US for naturalization — you should be able to survive the audit unscathed.

Step 2: The key for surviving the audit is to prepare now, even if you aren’t being audited.  Proactivity is the key.

You should prepare and gather the following information:

A letter from the comptroller of your company stating –

– Duration of your employment

– For the previous 3 years, your salary, income tax, health tax, and national insurance (ביטוח לאומי) payments

– The bank name, branch number, and acct. no. into which your salary was paid.

Your original form 106’s and authorized English translations** for the previous 3 years.

A letter from your family physician listing the names and date of births of all your kids, and a statement that s/he has been treating them for the previous how many years and that they reside with you and your spouse. The letter should be on Kupat Cholim stationary, preferably with an English letterhead.

A letter from each of the schools your kids attended during at least the previous 3 years indicating their names, date of births, the grade they’re currently studying in (if relevant), and a statement that you and your spouse are their primary care providers and that they reside with you. The letter should also indicate your address, that you paid their school fees, and that you attend parent-teacher meetings faithfully.

A copy of your marriage certificate. If married in the USA – your marriage license. If married in Israel, the registration form provided by the Minister of Religious Affairs when you got married, (not your Ketuba), and an authorized English translation.**

Copies of US passports for each member of the family.

Copies of IL passports for each member of the family.

Copies of Social Security cards for each child.

Copies of IL birth certificates for each child.

Copies of US Consular Report of Birth Abroad for each child.

**Authorized English Translation means you need an authorized translator (not yourself)  and it must be approved by a notary.   This may actually be cheaper in the US than in Israel because notary services in the US cost a fraction of notarization services in Israel (which are outrageous).

Step 3: Don’t try to deal with the audit by yourself. Pay a CPA in Israel — they have far more experience, and even if you get all the documentation above by yourself (which will save you much time and hassle), its still best to pay the CPA and let them be the interface to the IRS.

About the Author: Jameel blogs at the Muqata: http://www.muqata.com, but these days extensively posts on Facebook. Follow Jameel at https://www.facebook.com/Muqata Wherever I am, my blog turns towards Eretz Yisrael טובה הארץ מאד מאד The views expressed in this blog are solely those of the author and do not represent the views of The Jewish Press.


If you don't see your comment after publishing it, refresh the page.

Our comments section is intended for meaningful responses and debates in a civilized manner. We ask that you respect the fact that we are a religious Jewish website and avoid inappropriate language at all cost.

If you promote any foreign religions, gods or messiahs, lies about Israel, anti-Semitism, or advocate violence (except against terrorists), your permission to comment may be revoked.

2 Responses to “Surviving an IRS Audit in Israel”

  1. I just wonder WHEN our IRS service will begin to be dilligent with the fraud right here in the us. With hispanics claiming children that don'e live in the US much less with them and the prisoners that file for dependants named for Disney characters. It disturbs me that people don't just pay what they owe and get on with life. But to go to Israel to audit is rediculous when they have so much to recover right here.

  2. Elli Fischer says:

    The translations need not be notarized at all, and the translator need not be "certified". Here is the relevant language from the IRS code:

    (c) Standards for acceptability of submissions of documents in a language other than English and certified English translations of laws in a language other than English. The taxpayer must submit with the request an accurate and complete certified English translation of the relevant parts of all contracts, wills, deeds, agreements, instruments, trust documents, proposed disclaimers, and other documents pertinent to the transaction that are in a language other than English. If the taxpayer chooses to submit certified English translations of foreign laws, those translations must be based on an official publication of the foreign government or another widely available and generally accepted publication. In either case, the translation must be that of a qualified translator and must be attested to by the translator. The attestation must contain: (i) a statement that the translation submitted is a true and accurate translation of the foreign language document or law; (ii) a statement as to the attestant’s qualifications as a translator and as to that attestant’s qualifications and knowledge regarding tax matters or foreign law if the law is not a tax law; and (iii) the attestant’s name and address.

    This is something I've done for several clients, and there have been no problems with the translations.
    Contact me – fischer.tirgum at gmail – if you need a translator.

Comments are closed.

muqata logo 486x300
Current Top Story
18,000 Iranian Centrifuges
Netanyahu Warns Iran-Yemen-Nuclear Deal Axis ‘Dangerous to Humanity’ [video]
Latest Blogs Stories
Doug Goldstein

Why do you need to file an FBAR if you’re a US citizen abroad? What happens if you don’t?

heartflag.jpg

Jews caring for one another, that is how I would explain Israel to someone.

Terrorist organization Hezbollah leader Hassan Nasrallah, on al-Manar, Jan. 19, 2015.

As Iran becomes the North Korea of the Middle East, Nasrallah doesn’t understand where all his friends went.

Knesset and Menorah

I pray each member of Knesset will represent the interests of the State of Israel & ALL its citizens

At no time did Kahlon say that he preferred to see Bibi in another term as PM-I don’t trust him!

“Israel has nuclear weapons & it isn’t afraid to use them if necessary-Does that frighten you? Good”

American Jews think they know what’s best for Israel-better than Israelis. Here’s my take…

An old Arab man yelled at me “You’re stupid!” I returned the compliment; He had murder in his eyes.

Why do people feel the need to check their email 50X a day, constantly dipping in & out of Facebook?

Betar is the world-wide Zionist youth movement that refuses to be silent, and as our founder Ze’ev Jabotinsky wrote: “Silence is despicable.”

Life in Europe’s pre-War Yeshiva world makes today’s rulings look like the Taliban has taken over.

Moshe’s the 1st family member in thousands of years to have the honor of serving in a Jewish army

Often wig wearers become more attractive after marriage. Doesn’t this turn the intent on its head?

US official interference in Israel’s Elections is not only immoral but may be illegal under US law.

The greatest thing about leaving Israel is the joy in returning, hearing/seeing/smelling coming home

I never felt an election resonate so much; I had true existential fear that my candidate might lose

More Articles from Jameel@Muqata
Two-year-old Adele Bitton remains in life-threatening condition after she and her family were attacked by Palestinian stone throwers.

Adele Biton, who was seriously injured by terrorists in 2013, is again in critical condition…

MK Uri Orbach

Uri was a great representative for religious Zionism. He could get his message across… with a kindness and humor that was infectious and left you wanting to hear more.

American law recognizes assaulting and disrupting a civil airport as a war crime – such as what Hamas did to Ben Gurion Airport in 2014.

According to Obama, the Jews murdered in Paris were “randomly” targeted by a bunch of unaffiliated zealots. Yes he said that.

9:31pm The Mt. Hermon ski resort on the Golan Heights will be open for business tomorrow morning — having receiving permission from the IDF. 8:03pm Channel 2 reports that Hezbollah terror cell was located 5 kilometers from Israel, and not within Israel as originally thought.Soldiers in 2nd vehicle were saved after they jumped out of […]

Status of the wounded from this morning’s terror attack.

Oron Shaul’s dead body was stolen and being held by Hamas in Gaza.

Defense Minister Yaalon told Ruth Shapira that the terrorists were caught last night by IDF forces.

Printed from: http://www.jewishpress.com/blogs/muqata/surviving-an-irs-audit-in-israel/2012/08/09/

Scan this QR code to visit this page online: