The Federal Crime of Money Laundering

Money laundering is the process of disguising criminal proceeds—that is, the process of cleansing the taint from the proceeds of crime.  Money laundering, as a very general matter, occurs when a person or organization earns money through certain illegal activities and then moves, attempts to move, or conspires to move that money in an attempt to obscure its origins or cause it to it appear legitimate (i.e., “launder” it to make it look clean). Common methods include disguising the source of the proceeds; changing the form of the proceeds; or moving the proceeds to a place where the proceeds are less likely to attract attention.

Federal statutes proscribe money laundering.   The first federal Anti-Money Laundering statute was enacted in 1986 with the passage of the Money Laundering Control Act (“MLCA”), codified at 18 U.S.C. §§ 1956 and 1957.  The MLCA was amended in 1988 by the Anti-Drug Abuse Act of 1988 (Pub. L. 100-690), which amended § 1956 to add a provision making it a crime to conduct or attempt to conduct a financial transaction involving the proceeds of criminal activity with the intent to violate § 7201 (attempted tax evasion) or § 7206 (false tax return) of the Internal Revenue Code of 1986.  The MLCA was further amended in 1992 by the Annunzio-Wylie Anti-Money Laundering Act and the money laundering laws have been amended and supplemented in other subsequent enactments.

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International Tax Evasion

A globally coordinated day of action to put a stop to the suspected facilitation of offshore tax evasion has been undertaken this week across the United Kingdom (UK), United States (US), Canada, Australia and the Netherlands.

The action occurred as part of a series of investigations in multiple countries into an international financial institution located in Central America, whose products and services are believed to be facilitating money laundering and tax evasion for customers across the globe.

It is believed that through this institution a number of clients may be using a sophisticated system to conceal and transfer wealth anonymously to evade their tax obligations and launder the proceeds of crime.

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US And Switzerland Tax Treaty

The U.S. Treasury Department on Friday announced that a long-in-the-works tax treaty with Switzerland has at last been signed and has entered into force, alongside a tax deal with Luxembourg.

The tax treaty had originally been approved by the Swiss Parliament in June, 2010, but had been held up on the U.S. side over concerns that it potentially violated the privacy of individuals whose information, under the agreement, will now be freely exchanged.

The deal means that Washington will now be in a position to request information from the Swiss authorities on American accounts going back ten years.

In a statement on Friday, the Treasury Department said the two protocols would bring the existing tax treaties that the U.S. already has with Luxembourg and Switzerland “into closer conformity with current U.S. tax treaty policy, to allow for greater tax information exchange that will enhance efforts to bolster tax compliance and combat tax evasion.”

The protocols with Luxembourg and Switzerland – in addition to protocols with Japan and Spain that were also signed recently – are the first updates to to the U.S.’s income tax treaty regime in nearly 10 years.

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If you’re a 1099 worker, your tax life is very different than that of employees. It’s vitally important to understand how to file your taxes when you’re a 1099 worker, or you can end up in big trouble with the IRS.

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One Louisiana sales tax exemption for medical purchases made by hospitals and health care facilities provides an opportunity for both Louisiana sales and use tax savings at the state tax rate of 5%. This Louisiana sales tax exemption applies to medical devices that are required to be issued under a physician’s prescription and are used personally and exclusively by a single patient.

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On November 2nd, the House of Representatives unveiled the first draft of the Trump Tax Reform Bill. Here we look at how it will affect expats.

Citizen Based Taxation and FATCA 

There is no mention in the draft Tax Reform Bill of any change to citizen based taxation for individuals, or of repealing FATCA.

It is proposed that corporations are only taxed on their US profits (rather than globally), as taxing corporations globally has (conversely to expectations) reduced government revenue, as globally operating firms have simply relocated to other countries with more favorable tax regimes.

Despite ACA (American Citizens Abroad) lobbying to make a similar change away from global taxation for expat individuals, there is no mention of this in the draft bill. Read More

Kudos to Max Reed for his quick analysis on how the proposed U.S. Tax Reform bill may affect Canadian citizens/residents who also hold U.S. citizenship.

Reed’s analysis, which has been widely discussed at the Isaac Brock Society includes provisions that are very damaging to those who are the owners of Canadian Controlled Private Corporations (noting they are also under assault from Messrs. Trudeau and Morneau). The damaging provisions are both prospective and retrospective.

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Kat Jennings

Open Letter to President Trump, Treasury Secretary Mnuchin, House Speaker Paul Ryan, House Ways and Means Committee Chairman Kevin Brady, and Senate Finance Committee Chairman Orrin Hatch

The United States taxes individuals on the basis of citizenship. In other words, it taxes American citizens on their worldwide income regardless where they reside, the source of their income, whether they are or ever have been present in the US – in short, regardless of anything.

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John Richardson

The advent of the OECD Common Reporting Standard (CRS) has illuminated the issue of tax residency and the desire of people to become tax residents of more tax favorable jurisdictions. It has become critically important for people to understand what is meant by tax residency. It is important that people understand how tax residency is determined and the questions that must be asked in determining tax residence. Tax residency is NOT necessarily determined by physical presence.

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Hale Stewart

Hale Stewart is teaching 2 upcoming webinars next week that offer CPE credits: An Introduction to U.S. International Tax and Introduction to Captive Insurance. If you are serious about continuing your tax education, you should register with haste. Scroll down to read descriptions about the classes offered.

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Hale Stewart

Hale Stewart is teaching 2 upcoming webinars next week that offer CPE credits: An Introduction to U.S. International Tax and Introduction to Captive Insurance. If you are serious about continuing your tax education, you should register with haste. Scroll down to read descriptions about the classes offered.

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Ephraim Moss, foreign tax credits, expat, tax professional

One of the fundamentally important tax concepts for U.S. expats to know is that the U.S. tax system has built-in mechanisms for preventing the “double taxation” of your income (i.e., tax in both your new host country and in the United States). These mechanisms provide a measure of relief for U.S. expats who remain subject to U.S. taxation, despite living and working abroad.

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