web analytics
August 23, 2014 / 27 Av, 5774
Israel at War: Operation Protective Edge
 
 
At a Glance
Blogs
Sponsored Post
Jerusalem Mayor Nir Barkat (L) visits the JewishPress.com booth at The Event. And the Winners of the JewishPress.com Raffle Are…

Congratulations to all the winners of the JewishPress.com raffle at The Event



Surviving an IRS Audit in Israel

irs_tax_button[1]

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.

For more information on the IRS targeting American tax filers in Israel, see this article, “Americans in Israel Under IRS Scrutiny for Child Credit Claims” by Eric Kroh. Yihiyeh Biseder!

PS: Kudos to the underground “industry” of return preparer and services who caused this massive Chilul Hashem.  You know who you are, and you will be audited a thousand times over in hell.

If you need the name of reputable CPAs in Israel, you can contact me by email.

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.

SocialTwist Tell-a-Friend

muqata logo 486x300
Current Top Story
4 yr old Israeli Daniel Tregerman, murdered by Hamas rocket on Aug. 22, 2014.
IDF: Israeli Toddler Murdered by Rocket Fired Near UNRWA School/Shelter
Latest Blogs Stories
Iniigo - Genocide

So you want to blame Israel? First answer these 5 simple questions, and see if you even have a leg to stand on…

Jihad Supporting T-Shirts

Hamas’s online Jihadi supporters and groupies are desperately trying to differentiate between their support for Hamas and supporting ISIS.

Touro-012414-Goals

We all got degrees. We got married. We had families. We worked. We and were Koveih Itim

UNHRC war crimes panel head William Schabas - Not a good Schabas

But the real culprit is William Schabas, who by comparison makes Richard Goldstone look like a saint

“The Jewish board of deputies, who are complicit, will feel the wrath of the People of SA with the age old biblical teaching of an eye for an eye.”

Discussion on recent changes to Social Security benefits and how it will effect you.

I do not understand why Bibi or anyone else (Obama) would ever contemplate accepting any terms by an organization that states loud and clear their goal of Israel’s destruction.

It’s the 4th time in 5 years Maccabi Haifa has traveled to America to play against NBA competition.

The media dumped on the “Lehava” people as extremist – racist and should mind their own business.

What is the point of having our own state when it cooperates with those who are against us?

It was the “first family event I missed due to aliyah.”

Antisemitism, stupidity, fear, or exaggeration?

During Operation Protective Edge, IDF soldiers were faced with deadly risks in the Gaza Strip. Sixty four soldiers were killed and many more were wounded in combat. This is the story of one IDF commander who put his life in danger to rescue a soldier kidnapped by Hamas. Lt. Eitan, 23, joined the elite unit […]

I am a right wing religious Jewish settler and I HATE seeing pictures of kids in Gaza who are dying or suffering because of this war.

Doug speaks with World Chess Cahmpion Magnus Carlsen.

If they weren’t true they would be funny!

More Articles from Jameel@Muqata
South Africa of Flag

“The Jewish board of deputies, who are complicit, will feel the wrath of the People of SA with the age old biblical teaching of an eye for an eye.”

Kim Jong Un (Left)

Palestinian Authority President Mahmoud Abbas sent a floral basket to North Korean Tyrant-Dictator Kim Jong Un celebrating the “liberation” of North Korea.

Antisemitism, stupidity, fear, or exaggeration?

Hamas bomb expert kills team… last week he gave a preview of his unique bomb disposal technique…

A letter from a survivor who recounts the horrors of the 1929 pogrom in Hebron.

Hamas claims that even providing information about the bodies of the dead IDF soldier they are holding hostage is too much to give.

There is no contradiction between laughing and crying. You can do both at the same time.

George Galloway is very upset right now…

    Latest Poll

    Do you think the FAA ban on US flights to Israel is political?






    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: