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This week, the business world was buzzing after a federal court ruled that the Corporate Transparency Act—or CTA—was unconstitutional.

The ruling resulted from a lawsuit filed by the National Small Business United (also known as the National Small Business Association, or NSBA) and Isaac Winkles. On March 1, 2024, U.S. District Judge Liles C. Burke of the Northern District of Alabama, Northeastern Division, found the CTA unconstitutional “because it exceeds the Constitution’s limits on Congress’ power.” (☆)

How far the ruling might apply became a huge talking point. On its face, the ruling bars the U.S. Treasury from enforcing the CTA against the named plaintiffs—including the 65,000-member NSBA—but does not enjoin enforcement against others.

So would it apply to small businesses that join the NSBA after the date of the ruling? That’s less clear. In a previous case, SAF, v. ATF, et. al, the plaintiffs, the Second Amendment Foundation, took the position that a ruling in their favor applies to all members, regardless of when they join. There hasn’t been any pushback on that take, says Adam Kraut, SAF’s executive director. That makes sense, he explains, based on the plain language of the order which extends to the organization’s members. There is, he said, no limiting language that would suggest a restriction. There is similarly no limiting language in the NSBA order. (☆)

After the ruling, FinCEN announced that they would only follow the ruling in favor of the NSBA’s lawsuit to strike down the CTA specifically for NSBA members. The NSBA expects an appeal, with their lawyer telling me that he expects to win on appeal. The general consensus in the business community is that additional lawsuits will follow—this matter is far from over.

It is a good reminder that not all reporting requirements land on your Form 1040. For example, CTA reports are filed not with the IRS, but with FinCEN. The same applies to Reports of Foreign Bank and Financial Accounts, or FBARs.

Under the FBAR rules, U.S. persons with more than $10,000 in foreign bank accounts at any time in a tax year must report those accounts to the government. The failure to do so can be costly. If the U.S. person “willfully” fails to file an FBAR, civil penalties can reach the greater of $100,000 (indexed for inflation) or 50% of the foreign account balances at the time of the violation. Reduced penalties apply for “non-willful” failures to file, though those are limited to a per-return basis (not per account) following Bittner, an FBAR case that made it all the way to the Supreme Court.

A recent case, U.S. v. Kelly, confirmed that willful behavior can also mean reckless behavior. In Kelly, the taxpayer, a U.S. citizen, opened an interest-bearing account in Switzerland. The account was “numbered”—meaning only the account number, not Kelly’s name, would appear on the statements. Eventually, the bank alerted Kelly that they would turn over his information to the Department of Justice as part of a more extensive investigation. In 2013, he entered into the IRS’ Offshore Voluntary Disclosure Program (OVDP) to come clean—but did not file FBARs for 2014 and 2015. He was removed from the program, and the IRS conducted a civil examination, imposing willful FBAR penalties of $769,126.

The matter went to court, where his behavior was found to be reckless. The court noted that he did not seek professional tax advice (even after the bank suggested that he should) and didn’t submit FBARs for 2014 and 2015 (even though he became aware of FBAR reporting obligations through the OVDP). The case is a cautionary tale that taxpayers can’t simply argue they were unaware of the FBAR reporting obligations.

Your reporting obligations may not stop with FBARs—a handful of other information and reporting forms may also be due, especially for assets that might not be on your radar on a daily basis, like foreign gifts and inheritances. Those additional forms may include Form 3520 (for gifts or inheritances valued at more than $100,000 from a non-U.S. person or their estate), Form 3520-A (for foreign trusts with U.S. owners), and Form 8938 (for certain assets valued over $200,000). There are other forms depending on your circumstances—this is tax law—and in some instances, you may need to file more than one. (☆)

Many of the due dates for additional forms are keyed to the due dates for your Form 1040. And so far, tax filing data from IRS still shows a dip in tax returns received compared to the prior year. Even though the average tax refund is higher ($3,213 per taxpayer as of February 23, 2024, compared to $3,079 as of February 24, 2023), the number of returns received remains lower than the same period last year (44,584,000 tax returns as of February 23, 2024, a 3.0% decline from the previous year). (☆)

Taxpayers are likely waiting for legislation that could provide additional tax breaks retroactively for 2023, including an expanded child tax credit. The bill did pass the House, but it has stalled in the Senate (there has been no vote). So, should you wait to file your tax return? Depending on the piece of the legislation that matters to you, the answers to that question are no, yes, and it depends.

If you’re stuck because you have questions, we have answers. Our Forbes tax guide can help point you in the right direction, from whether your Social Security benefits are taxable to whether you can claim a credit for your shiny new electric vehicle (or, a slightly less shiny used model). We’ll be updating it as news happens.

(There are just 38 days remaining until Tax Day!)

Thanks for reading!

—Kelly Phillips Erb (Senior Writer, Tax)

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While individual tax returns may get all the attention, a handful of other forms may also be due at tax time. As noted earlier, keeping up with the filing requirements—especially when it involves foreign assets (including gifts and inheritances)—can be tricky. (☆) That brings me to this week’s question from a reader who is moving abroad. Her question, in part, is:

I will be permanently moving abroad to Sweden this summer. I plan on buying a condo to live in and wanted to know if I am required to report my home purchase and/or are there any taxes that I must pay to the U.S. for buying a home in Sweden?

The short answer is no. You file Form 8938 if you are a U.S. citizen or resident with an interest in specified foreign financial assets more than the applicable reporting threshold based on your filing status. For an individual taxpayerliving outside the U.S, that threshold is more than $200,000 on the last day of the tax year or more than $300,000 at any time during the tax year.

Specified foreign assets can include (but aren’t limited to) foreign bank accounts (including savings and investment accounts), foreign stocks and bonds, foreign mutual funds, foreign retirement plans, and foreign life insurance policies, but not foreign real estate.

As a U.S. citizen living abroad, you will not have to report the purchase of foreign property on your Form 1040. But, if you earn money from the property (for example, if you rent it out), you’ll need to report that income. And, if you decide to sell, you will have to report any related gain. Fortunately, the same U.S. tax rules apply out of the country—if the property qualifies as a primary residence and you meet the criteria, you’re entitled to section 121 exclusion, meaning that you can exclude up to $250,000 of that gain from your income ($500,000 if you’re married filing jointly).

One more thing: these are the rules if you buy property personally. Different rules apply if you purchase foreign real estate through a foreign entity such as a corporation, partnership, or trust.

If any of this sounds a bit tricky, it can be. It’s always a good idea to check with a tax professional.

Do you have a tax question or matter that you think we should cover in the next newsletter? We’d love to help if we can. Check out our guidelines and submit a question here.


Form 3520 is filed by U.S. persons to report transfers to and distributions from foreign trusts, as well as certain foreign gifts, while Form 3520-A is filed by foreign trusts with at least one U.S. owner.

Each Form 3520-A represents one unique foreign grantor trust. The most recent IRS data, sorted by country, notes which countries are the most common.

I’ll bet you’ll see some surprises.


What if you could transform interest income—subject to ordinary income tax rates—into more favorable capital gains rates? That’s what an exchange-traded fund (ETF) with the ticker symbol BOXX purports to do. Here’s how it works: the ETF effectively earns a return on each box spread that roughly matches the return on Treasury bills. As box spreads mature, new ones are entered—and the BOXX shares continue to appreciate. When investors sell their shares, they claim the appreciation as capital gain. But will it hold up? Steve Rosenthal, who previously served as a staffer at the Joint Committee on Taxation, which helped Congress draft the tax code’s anti-conversion statute, says no. “Whatever criterion Treasury uses to clarify the scope of the anti-conversion rules,” he writes, “the BOXX tax advantages should be closed, as they contravene Congress’ clear intent to stop conversion of ordinary income into capital gains.”

Another tax code statute making news this week is section 280E. Section 280E has a fascinating history, and today, it generally prevents cannabis businesses from claiming tax credits and deductions for expenses they incur in the operation of their businesses. The result is that it increases the effective tax rates of cannabis businesses to rates well in excess of those incurred by businesses outside the industry. That’s why the cannabis tax community was said to be “abuzz with rumor and delight” from a recent announcement by a publicly traded cannabis company that it obtained large tax refunds from the IRS. The company announced nothing more than the refund amounts and the tax years to which they relate. Speculation is rampant, including those who believe the company cracked the tax code on section 280E. That optimism is noteworthy, however, since the statute remains on the books.


📅 March 12, 2024. How the Tax Code Can Help Renters. Free American Bar Association webinar, 1 p.m. Registration required.

📅 March 15, 2024. S-corp and partnership tax returns are due (or file for an extension).*

📅 March 16, 2024.Special Saturday openings at Taxpayer Assistance Centers (TACs), from 9 a.m. to 4 p.m. Click over to the IRS website for participating TAC locations.

📅 March 22, 2024. Last day to apply for the Employee Retention Credit Voluntary Disclosure Program—the program lets employers who received ERCs but are ineligible pay back the credits at a discounted rate.

📅 March 26, 2024. Keep More of What You Earn: Savvy Tax Tips To Maximize Your Investment Income. Forbes webinar featuring Kelly Phillips Erb and Amber Gray-Fenner, 2 p.m. ET. (Watch this space for more details.)

📅 April 15, 2024. Individual federal income tax returns are due (or file for an extension) for most taxpayers.*

📅 April 17, 2024. Individual federal income tax returns are due (or file for an extension) for taxpayers in Maine and Massachusetts.

* The IRS has announced tax relief for individuals and businesses in parts of California affected by severe storms and flooding that began on January 21. They now have until June 17, 2024, to file various federal individual and business tax returns and make tax payments.


Former IRS Commissioner Charles “Chuck” Rettig has joined Chamberlain Hrdlicka as a Shareholder. Rettig served as the IRS Commissioner from 2018 to 2022, overseeing the nation’s tax system and managing an agency of over 83,000 employees with an annual budget of $13.4 billion. He has joined the firm’s tax controversy & litigation practice, comprised of attorneys experienced in advising and representing taxpayers before federal, state and local taxing authorities and in federal and state courts throughout the country.

If you have career or industry news, submit it for consideration here.


On March 5, the Tax Section of the American Bar Association submitted two comments to the IRS. While the section lauded improvements to the IRS online account transcripts, it made several recommendations, including making the dates clear on taxpayer notices and adding specific information about taxpayer actions, such as filing requests for Collection Due Process (“CDP”) hearings or Tax Court petitions for redetermination of deficiency. Additionally, with respect to Rev. Proc. 86-42, which delineates the standard representations that taxpayers must submit as a prerequisite to receiving a private letter ruling on certain section 368(a) transactions, the section recommended a “one-size-fits-most” approach. Specifically, they suggested a new revenue procedure providing for operating rules, factors that must be considered in making specific representations (to the extent relevant), and information the taxpayer must disclose.

The American Institute of CPAs (AICPA) submitted a letter to the Treasury and the IRS providing recommendations for regulations focusing on reporting by brokers for digital asset transactions. The AICPA recommends that the Treasury and the IRS clarify the terms and examples within the section 6045 proposed regulations, including the term “broker” and other important terms like “digital representation of value,” “cryptographically secured distributed ledger,” and “any similar technology”— all of which are used to define “digital asset.”


When was the FBAR requirement signed into law?

A. 1913

B. 1970

C. 1984

D. 2001

Find the answer at the bottom of this newsletter.


I hope you’ll get to know some of our staff and contributors. Since we’re talking about reporting requirements, I asked: If a long-lost relative were to leave you real property anywhere in the world, where would you want it to be?

Kelly Phillips Erb (Senior Writer, Tax): To quote Princess Ann in Roman Holiday: Rome! By all means, Rome.

Amber Gray-Fenner (Contributor, Tax): Canada, in the mountains.

Tina Russo (Senior Editor, Money Team): In Italy—Florence would be my preferred spot. The history, the cobblestone streets, the architecture, the museums and all the great shopping. I love it all!

Sergei Klebnikov (Writer, Money Team): Tokyo or Lisbon

Emma Whitford (Writer, Money Team): Provence, France (ideally with a lavender field or olive trees)

Brandon Kochkodin (Writer, Money Team): Rome

Mitchell Martin (Editor, Digital Assets): The area in Paris to the immediate west of the Arc de Triomphe.


That’s the estimated number of “reporting companies” responsible for filing a report under the Corporate Transparency Act in 2024.


The answer is (B) 1970.

It was first enacted as part of the Banking Secrecy Act, focused on financial reporting in an effort to identify and eliminate money laundering, tax evasion, and other financial crimes.


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