web analytics
April 17, 2014 / 17 Nisan, 5774
At a Glance
Blogs
Sponsored Post
Spa 1.2 Combining Modern Living in Traditional Jerusalem

A unique and prestigious residential project in now being built in Mekor Haim Street in Jerusalem.



Surviving an IRS Audit in Israel

irs_tax_button[1]

Share Button

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.

Share Button

About the Author: Jameel blogs at the Muqata: http://www.muqata.com 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.

Leave a comment (Select your commenting platform)

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.

SocialTwist Tell-a-Friend

Loading Facebook Comments ...
Loading Disqus Comments ...
muqata logo 486x300
Current Top Story
The interior of the El Ghriba synagogue on the island of Djerba, Tunisia, in 2009.
Tunisian Jew Stabbed in Djerba
Latest Blogs Stories
This 18th Century handwritten Passover Haggadah was discovered in a heap of rubbish.

Women must eat Matzah on Pesach too but that is also a time bound positive commandment.

Justin Hayet (second from right) at the State University of New York at Binghamton, supporting Israel against anti-Israel attacks.

Pro-Israel leaders on campus are as important as the troops in the IDF and professional hasbaraniks.

Children re-enacting the Exodus from Egypt, in southern Israel, April 10, 2014.

The seder reminds us of our freedom now that we are home again in the land of the Nation of Israel

IDF Crew Chiefs on Elite Helicopter Mission. Jan. 13, 2014

IDF helicopters are ready to act on a moment’s notice to defend the State of Israel.

The Samson Super Hercules aircraft ensures the IDF can safeguard Israel from far beyond her shores.

Rudoren and the Times are determined to go the extra mile to humanize Barghouti.

Gazans are among the principal victims of the terror-addicted Hamas Islamists.

Factors that you need to take into account when deciding whether to rent or buy a home.

Intelligence organizations seek enemy’s secrets; for the past 35 years, all secrets are on computers.

Guest Blogger Robert proves that one must not eat any Matzah on Pesach based on an article in Vosizneias.

Students most in danger of going OTD are those with damaged egos from teacher inattentiveness.

It is unfair to judge a 52 year old man with the glasses of a person who lives in a different world.

The president of the Cambridge Satchel Company talks about the exponential growth of her company.

The Arabs didn’t miss an opportunity for peace. Their goal has always been something else entirely.

Before Begin’s policy of withdrawing from Land liberated in the 6 Day War, today’s scenario was unthinkable.

More Articles from Jameel@Muqata
kerry selling

Kerry doesn’t follow news from Israel very closely, he’s too busy drawing up plans for Israel’s return to Auschwitz borders.

MK Ahmad Tibi with worry beads.

It’s unfortunate that the world takes every word from MK Tibi’s mouth as sacred.

Here’s some background these papers neglected to mention…

Everything the PLO says needs to be taken with a few grains of salt…especially, when this video was provided today by the Shomron Settlement Council, taken today – of Palestinians and a Leftwing activist actively cutting down a Palestinian Olive Grove (what better way to demand international observers). Too bad for them we caught it […]

Sick of the Palestinians displaying their “map of Palestine”? Nothing will enrage them more than this map.

Are ready for the 9th of Av? The children are….

We at Jihawg Ammo hope you will stock up on Jihawg as a natural deterrent to the ever growing threat of radical Islam and Sharia Law.

    Latest Poll

    Now that Kerry's "Peace Talks" are apparently over, are you...?







    View Results

    Loading ... Loading ...

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: