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11271 Ventura Blvd. #612 Studio City, CA 91604 Inside This Issue pg 1 ∙
Give Hope to Your Clients
Food for Thought
pg 2 ∙ pg 3 ∙ pg 4 ∙ pg 5 ∙ pg 7 ∙ pg 8 ∙
From the Practice Corner
Member Spotlight
Tax Resolution Success Summit 2020
Shout Outs!
IRS Terror Tale of the Month
In January 2020, Prince Harry, Duke of Sussex, and Meghan Markle, Duchess of Sussex, announced that they were going to step back as“senior”members of the British royal family and become financially independent. This unexpectedmove sent shock waves through the royal family as the United Kingdom prepared for the many changes this shift would bring. One thing that didn’t change? Even though Meghan and Harry have now moved to Los Angeles, she will still have to pay for U.S. taxes for the years she didn’t live in the United States. Though the former “Suits” actress married a British prince and spent the last several years splitting her time between the United Kingdom and Canada, Markle is still a U.S. citizen. The U.S. has a citizen-based taxation system, meaning citizens must file taxes with the IRS even if they live and earn their income outside of the United States. Currently, no documents suggest that Markle hasn’t been paying taxes on income she’s earned for royal appearances, allowances received from the royal family, gifts she has received, or investments earned in the U.K. or Canada, which is a good thing, because the IRS wouldn’t appreciate the duchess skipping out on such a hefty tax bill. IRS Terror Tale of the Month Duchess of Sussex and Royal Baby Must Pay US Taxes
Their son, Archie, is a dual U.K.-U.S. citizen. Under U.S. law, a child born abroad to an American parent automatically receives U.S. citizenship, provided the parent has lived in the U.S. at some point in the past five years. This means Archie is also expected to pay U.S. taxes. While the royal baby won’t be filing taxes himself, as a member of the royal family, Archie inherited investments that generate income that’s taxable by the IRS. It’s up to his parents tomake sure that royal tax bill is paid. As they step back from royal duties andmake their home in Canada or Los Angeles, Prince Harry and Meghan Markle’s tax situation is expected to change dramatically. But while the Duke and Duchess of Sussex may be able to sever financial ties with the British royal family, as long as Markle and Archie are American citizens, they won’t be severing ties with the IRS.
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