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Global Immigration Law Services
 Immigration Law Update
 
July/August 2010
In This Issue
H-1B Update
Fees, Fees, and More Fees!
Summer Tax Tip - Disclosure of Foreign Financial Assets on U.S. Tax Returns
Global Update - UK
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Welcome to the July/August edition of our Immigration Law Update.  With Summer heading into Fall, it is time to head "back to school" for the latest updates in immigration laws.  Immigration authorities did not take a summer vacation, implementing new fees for visas and ESTA applications.  A new law also increases fees on H-1B and L-1 worker petitions.  On the tax front, those with foreign financial assets will be subject to new disclosure requirements on U.S. tax returns.   
H-1B Cap Update
 
As of August 13, 2010, approximately 29,700 H-1B cap-subject petitions were received by the U.S. Citizenship and Immigration Service. 12,300 H-1B petitions for aliens with advanced degrees were also received.  As was the case last year, the economic situation in the U.S. and now ever increasing legislation (and fees) in this area has contributed to a slow-down in H-1B petition applications.
Fees, Fees and More Fees!
I. New Law Raises Fees on H-1Bs and L-1s
 
On August 6, 2010, the Senate approved a $600 million border emergency package introduced by Senators Claire McCaskill and Charles Schumer that proposes to improve security along the U.S.-Mexican border. However, the Emergency Border Security Supplemental Appropriations Act, 2010, also included provisions to increase total fees for L-1s by $2,250 and H-1B's by $2,000, for companies that employ 50 or more employees in the U.S., if more than 50% of the company's employees are L or H nonimmigrant employees.
 
This Bill  was signed into law (Public Law 111-230) by President Obama on August 13, 2010.  Accordingly, effective immediately,  H-1B and L-1 petitions meeting the above criteria that are postmarked on or after August 14, 2010  must include the additional fee of $2,000 (for H-1B petitions) and $2,250 (for  L-1A and L-1B petitions).  In particular, this rule applies to petitions for new H-1B or L-1 employees (not renewals) or for change of employer petitions.  The rule will remain in effect through September 30, 2014.

USCIS is currently in the process of revising the Petition for a Nonimmigrant Worker (Form I-129) to comply with the new law.  USCIS also recommends that companies submitting H-1B or L-1 petitions either include the new fee or a statement or other evidence outlining why this new fee does not apply.

II. New ESTA Fee Implemented - Effective September 8
 
U.S. Customs and Border Protection (CBP) announced an interim final rule that will require travelers from Visa Waiver Program (VWP) countries to pay a $14 fee when applying for an Electronic System for Travel Authorization (ESTA) on or after September 8.
 
$4 of the fee is for CBP to recover the costs incurred to administer the ESTA system and $10 covers the mandatory travel promotion fee established by the Travel Promotion Act of 2009.

All payments for electronic travel authorization applications must be made by credit card or debit
card when applying for or renewing an ESTA.  Currently, the ESTA system accepts only the following credit/debit cards: MasterCard, VISA, American Express, and Discover. An application will not be submitted for processing until all payment information is received.
 
Travelers with an already approved ESTA will not need to pay the ESTA fees when updating an ESTA application.  However, travelers with new passports and reapplying for an ESTA will need to pay the ESTA fees.
 
III. Summary of New Consular Immigrant Visa Fees which took effect July 13, 2010
 

Family-based & Immediate Relatives Immigrant Visa

Processing Fee

US $330.00 per visa applicant

Security Surcharge

US $74.00 per visa applicant

Total

US $404.00 per family-based visa applicant

Employment-based Immigrant Visa

Processing Fee

US $720.00 per visa applicant

Security Surcharge

US $74.00 per visa applicant

Total

US $794.00 per employment-based visa applicant

Diversity Visa (DV) Applicants

Processing Fee

US $305.00 per visa applicant

DV Lottery Surcharge

US $440.00 per visa applicant

Security Surcharge

US $74.00 per visa applicant

Total

US $819.00 per diversity visa applicant

Other Immigrant Visa (SIVs, etc)

Processing Fee

US $305.00 per visa applicant

Security Surcharge

US $74.00 per visa applicant

Total

US $379.00 per visa applicant

Returning Resident Status (SB-1)

SB-1 Application

US $380.00 per visa applicant

 

If the SB-1 Application is approved, then the following fees are necessary to finish processing the Visa.

Processing Fee

US $305.00 per visa applicant

Security Surcharge

US $74.00 per visa applicant

Total

US $379.00 per visa applicant

Domestic Review of Affidavit or Support (Applies if application is done by the NVC)

Processing Fee

US $88.00 per Affidavit

 
Tax Tip - This Month: Disclosing Foreign Financial Assets on U.S. Tax Returns
 By Melissa Gillespie, Of Counsel
International Tax Counsel
 
Disclosing Foreign Assets
 
Currently individual taxpayers are aware of the TDF 90-22.1 reporting requirements, otherwise known as the FBAR reporting.
 
However, pursuant to Section 511 of the HIRE Act, for the 2011 tax year, individual taxpayers will now be required to disclose on their U.S. tax returns detailed information about foreign financial assets if the aggregate value of the assets exceeds US$50,000.  This reporting is in addition to the TDF 90-22.1 FBAR reporting, not in lieu of it.
 
The definition of foreign financial assets is much broader than that found for the FBAR provisions.  Foreign financial assets include: any financial account maintained by a foreign financial institution and any stock or security issued by a non-U.S. person.
 
A statement must be attached to the tax return including information similar to the FBAR information:
  • If held in a financial institution:  account number, name of financial institution where asset held and the maximum value of the asset;
  • If it is a stock or security: the holder must provide name and address of issuer and maximum value of the asset during the tax year
If someone is required to make such a disclosure and fails to do so, there is a minimum penalty of $10,000 and a maximum penalty of $50,000.  IRS may abate the penalty for reasonable cause. These provisions went into effect on March 18, 2010.
 
Penalties
 
Current law: pursuant to IRC 6662, a  20% accuracy related penalty applies to the portion of any underpayment of tax attributable to any substantial understatement of income tax. 
 
New law (for tax years after 2010): Pursuant to Section 512 of the Act, IRC section 6662 of the IRC is amended to now provide for a 40% penalty applicable to any portion of an understatement attributable to any transaction involving an undisclosed foreign financial asset.  An "undisclosed foreign financial asset" is defined as any asset for which information was not properly provided but is required to be disclosed as a "specified foreign asset" or under any other provisions of the Code.  Section 512 is effective for taxable years beginning after 2010.
 
Statute of Limitations
 
Current law: IRS must assess taxes within three years after a taxpayer's return was filed unless an exception applies.  The Statute is extended to six years if the taxpayer omits from gross income an amount exceeding 25% of reported income.
  
New law (for returns filed after 2010): Pursuant to Section 513 of the Act, IRC section 6501 is amended to now include an extension to six years if the omitted amount exceeds $5,000 and this amount is attributed to one or more reportable foreign assets.
 
This section is effective for returns filed after 2010 but is retroactive to those filed on or before if the assessment period for such taxes has not expired as of 2010.
 
Please contact us if you have any questions about these or other tax filing obligations, or if you need assistance with voluntary disclosure issues as a result of failure to meet past filing obligations. 
Global Update
 
Globe UK Points System Update
 
On July 19, 2010, the UK Border Agency introduced an interim limit or "cap" on visa applications for foreign workers submitted under Tier 1 (General) and Tier 2 (General) of the Points Based System.  The aim of this cap is to achieve an overall reduction of 5% in the number of applicants in these categories compared to the equivalent period last year. This interim cap will continue until 31 March 2011, after which it is expected to be made permanent
 
Within Tier 2 the cap:
  • will include all Certificates of Sponsorship used under Tier 2 General, including certificates used for extension applications
  • will not include Tier 2 Intra-company Transfers (ICTs), Ministers of Religion or Sportspeople
  • will not include Tier 2 dependent applications.
The interim cap will be implemented by limiting the number of Certificates of Sponsorship (CoS) each sponsor can assign to foreign workers.
 
A small number of the CoS will be made available for exceptional cases that meet specified criteria. A CoS from this reserved allocation can be requested if a company is:
  • a new sponsor licensed during the period of the interim cap; or
  • an existing sponsor who requires additional CoS in exceptional circumstances during the period of the interim limit.
 
For more information, feel free to contact us with any questions.
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Please feel free to forward this newsletter to others who may have an interest in these topics.  You can also browse past newslettersIf you have any questions, comments or suggestions, please e-mail me at [email protected].
 
Sincerely,
 
Magdale Labbe Henke
Attorney-at-Law (U.S.) and
Solicitor of England and Wales (non-practising)
Principal, MLH Consular Consulting
 
  
 
 
This newsletter is provided for informational purposes only and should not be construed in any way as legal advice.