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Taxation of Persian-Americans Living in Iran

Disclaimer: Iran OFAC license data below is for general information, not legal advice.

Zaher Fallahi, Iran OFAC License Attorney, CPA, assists Iran OFAC license clients with obtaining Iran OFAC licenses, money transfer from Iran pursuant to Iran OFAC License, taxation of Iran OFAC license transactions, Iran OFAC license problems with OFAC, Iran OFAC license Voluntary-Self Disclosure, IRS Audit, Cryptocurrency Tax, and Foreign Gifts. Consultation is available via toll free 1-(877) 687-7558.

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Taxation of Persian-Americans Living in Iran

If you are a U.S. green card holder, a U.S. citizen, or subject to U.S. taxes under physical presence test (a US person under the Internal Revenue Code 7701(b)) and live in Iran, you are taxed on your worldwide income regardless of where you earned it. Additionally, you are subject to U.S. international tax laws, including Report of Foreign Bank and Financial Accounts (FBAR), and Foreign Account Tax Compliance Act (FATCA). In case of violations, you need to consult a tax attorney and consider OFAC VSD and IRS (VDP).  

The good news is (be sure to read the bad news in III below) that you may be able exclude up to an amount of your earned income or compensation (Foreign Earned Income Exclusion) income earned outside U.S., which is adjusted for inflation annually, if you otherwise qualify:

  1. 2021     $108,700
  2. 2020     $107,600
  3. 2019     $105,900
  4. 2018     $103,900  
  5. 2017     $102,100  
  6. 2016     $101,300
  7. 2015     $100,800

For example, not stay in the U.S. for more than 35 days in a calendar year, under the Foreign Earned Exclusion provided under the Section 911 of the Internal Revenue Code.

You may deduct certain foreign housing amounts. This exclusion can only be taken by timely filing the tax return. It is important to note that this exclusion does not apply to passive or un-earned income (see below). Neither does it waive the requirements of filing (FBAR) and (FATCA) (see above).

Generally, there are three categories of foreign income.

(I) Earned Income; (II) Un-earned Income; and (III) Variable Income.

(I)- Earned income includes: (1) Salaries & wages, (2) Commissions, (3) Bonuses.

(4) Professional fees and tips.

(II)- Unearned income includes: (1) Dividends, (2) Interest, (3) Capital gains, (4) Gambling winnings,

(5) Alimony, social security benefits, and (6) Annuities.

(III)- Variable income; may fall into either one of these categories: (1) Business income, (2) Royalties; and (3) Rents.

The bad news is that unfortunately your employment in Iran may violate the U.S. laws of sanctions against Iran also known as the Iranian Transactions and Sanctions Regulations (ITSR) administered and enforced by OFAC. There are certain exceptions to the ITSR. For instance, employment at the World Bank, International Monetary Fund (IMF) or other United Nations related organizations that may be authorized. It is urged to ask your potential employer to ensure that your employment in Iran is otherwise authorized by OFAC. Furthermore, you must seek advice from an OFAC Attorney and an International Tax Attorney to prevent unintended perils.

Unintended Iranian OFAC Violations

In case you have worked in Iran without the knowledge Iran OFAC license requirement, and reading this article raises your curiosity as to whether you may have violated any U.S. laws, you should seek legal advice from an Iran OFAC license attorney and an international tax attorney, including our firm. See (VSD)

Zaher Fallahi, Iran OFAC License Attorney, CPA, assists Iran OFAC license clients with obtaining Iran OFAC licenses, money transfer from Iran pursuant to Iran OFAC License, taxation of Iran OFAC license transactions, Iran OFAC license problems with OFAC, Iran OFAC license Voluntary-Self Disclosure, IRS Audit, Cryptocurrency Tax, and Foreign Gifts. Consultation is available via toll free 1-(877) 687-7558, Nationwide consultation is available via toll free 1-(877) 687-7558, (310) 719-1040 (Los Angeles), (714) 546-4272 (Orange County), email taxattorney@zfcpa.com