Whitepaper

Are You Providing Your US Investors with the Tax Reporting They Require?

Managers of investment funds domiciled outside of the US may not be aware of tax reporting obligations under US tax laws. However, if they have US investors, they are required to provide specific forms enabling them to accurately report income from the fund for tax purposes. Failure to do so may lead to investor dissatisfaction, with the risk of withdrawals or even legal recourse.

Moreover, if non-US investment partnerships or business entities derive income from US sources, they may have to file US tax returns. Non-compliance results in penalties and interest on unpaid taxes. Rarely are such failures due to willful negligence. More often, managers simply don’t know or understand US tax requirements or what they must report. Many may not even realize they have filing obligations. To help clarify the requirements, let’s look at the specific reports.