The United States Citizenship and Immigration Service (USCIS) reports that as of September 25, 2009, it had received approximately 46,700 petitions for H-1B visas towards the cap of 65,000 (cap-subject petitions).  For the 20,000 H-1Bs that are set aside for graduates with Master's or higher degrees from U.S. universities (advanced degree petitions), USCIS has already received 20,000 petitions.  However, USCIS will continue to accept both cap-subject petitions and advanced degree petitions until a sufficient number of H-1B petitions have been received to reach the statutory limits, as some of these petitions may be denied, revoked, or withdrawn.

H-1B visas are used to employ foreign workers in specialty occupations that require theoretical or technical expertise in a specialized field and a bachelor's degree or its equivalent.

 

According to a recent New York Times article (9/14/09), U.S. companies are cutting back on long-term  expatriate assignments due to the high costs usually associated with such assignments (such as housing, relocation of family, schooling for children).  However, the number of short-term assignments has drastically increased.  These assignments are usually cheaper because the family will not accompany the transferred employee overseas. Nevertheless, employers and employees need to be aware of the immigration and tax ramifications of an expatriate assignment, whether short or long-term, and be in compliance with the relevant country's regulations.  Depending on the type of work being performed, a work permit may be required either right away or for work assignments over three months.  Also, many countries subject individuals to income tax as residents once they have been residing in the country for 183 days.  As a result, it is very important to have a global employee/expatriate tracking system in place to be aware of how much time an employee will spend and has spent in a host country.  This will allow companies to better determine when tax, social security/insurance benefits or immigration responsibilities will be triggered, as well as when work permits or visas need to be renewed.  Otherwise, a company that has not been compliant with a country's immigration or tax regulations risks its ability to transfer key employees to that location in the future.

 

If you have questions about setting up a global employee tracking system or global immigration compliance plan, please feel free to contact us for assistance.

By Melissa Gillespie, Of Counsel

 

September 23, 2009 was the deadline for tax filers to voluntarily disclose to the IRS any unreported income and any related foreign bank account reporting relating to offshore financial accounts.  This has been extended to October 15, 2009.  US citizens are subject to taxation on worldwide income, which includes investment income earned on offshore financial accounts. U.S. citizens, permanent residents and tax residents are also required to complete the FBAR Form TDF 90-22.1 if they own or assert any control over a foreign bank account or financial account with a balance which exceeds US$10,000 at any time during the year.  This even includes life insurance with a cash surrender value greater than US$10,000, certain ownership in a corporation or a partnership that owns a foreign financial account, or a trustee or a beneficiary of a trust who owns a foreign financial account.
 
The voluntary disclosure process allows noncompliant taxpayers to resolve their tax liabilities and minimize their chances of criminal prosecution for failure to report this income and also for failure to properly file the Form TDF 90-22.1.  In order to comply with the voluntary disclosure program, the taxpayer must send a letter by October 15 to the Criminal Investigations Unit of the IRS which is a request to be accepted into the voluntary disclosure program.  The taxpayer must then file amended income tax returns for the past six years to properly report this previously unreported income and must also file six years of delinquent Forms TDF 90-22.1. If a taxpayer complies with all the provisions of the voluntary disclosure process, the IRS will not recommend criminal prosecution to the Department of Justice.  Taxpayers will have to pay any back taxes, interest, a 20% accuracy related penalty  and a fixed fine of 20% of the highest balance of the  foreign accounts over the past six years.
 
This extended deadline also applies to  taxpayers who previously reported and paid tax on this offshore taxable income in prior years, but failed to complete the required FBAR.  These individuals can file delinquent FBARs with the Department of Treasury in Detroit, Michigan with a statement as to why the filing is late.  Copies, with relevant tax returns must also be filed with the IRS Philadelphia Offshore Identification Unit.  For more information on the voluntary disclosure process, you can check the IRS website and contact us with any questions.  If you need FBAR or voluntary disclosure assistance by the October 15 deadline, please contact us as soon as possible at the e-mail listed below. 
 
It remains to be seen how many filers will voluntarily disclose or submit delinquent FBARs.  But one thing is clear - the IRS and Dept. of Treasury are very serious about ferreting out those who have not been in compliance and the penalties will be severe for these individuals.