Archive for Michael DeBlis, III

From Convicted Felon To Government-Made Millionaire

The Man Who Ended the Tradition of Bank Secrecy And Got Rich In The Process

Meet Bradley Birkenfield. Mr. Birkenfield, a former Swiss banker, was released from federal prison three years ago after serving 2½ years for helping wealthy American clients hide millions of dollars from the U.S. government. Five weeks after his release from prison, Birkenfield was sitting on his couch wallowing in his misery, recognizing that he was unemployable as a private banker anywhere. But little did he know that his fate was about to change. As he was devouring his third pint of “Ben and Jerry’s” Boom Chocolatta, there was a knock on the door. It was his lawyer. And his lawyer came bearing gifts — a big gift — one that would choke a horse. It was a check for $104 million dollars Read More

Written by | Posted in FATCA • International • IRS • Tax Fraud/Evasion/Crimes

OVDP & Double Counting: Traps For The Unwary

Accounting for “double counting” is not child’s play. Your tax attorney will need the following information in order to complete his or her review of your double counting issue. These steps must be repeated for every year in which you believe that there is a double counting issue.

For each transfer, you should provide the following:

(a) The highest balance of the account from which the transfer(s) was made for the tax year in question;

(b) The highest balance of the account into which the transfer(s) was made for the tax year in question; Read More

Written by | Posted in FBAR • OVDP

Tax Planning On The Edge

Ride Or Die In The International Tax Arena

The U.S. economy has become more global, lining up in the race to the top. However, with multinational economic activities revving their gears, some tax practitioners are growing fast and furious. To them, it doesn’t matter if you win by an inch or a mile; winning is winning. As a result, some choose to violate U.S. laws as long as their advice is legal abroad while others evade taxes in foreign countries without breaking rules in the U.S. However, if you’ve been exploiting the legal arbitrage opportunities resulting from the gaps created by the interaction of different regimes, expect the IRS to go ‘ejecto seato, cuz’ on you and your clients very soon. Read More

Written by | Posted in TaxConnections

Roll On One

James Moore received a temporary reprieve from a federal judge in Seattle, but, at least metaphorically speaking, he is still strapped onto the mercy seat in classic John Coffey style, waiting to see what the onlooking guards will do next. (See Video Clip Below)

No one really knows how Moore v. United States will turn out. What we do know is that, in a preliminary ruling, Judge Richard Jones declared that the IRS cannot spin the Wheel of Misfortune and arbitrarily determine the amount of a civil penalty in a Report of Foreign Banks and Financial Accounts (FBAR) failure to file case. The Service may well simply add to the record, and if that is the case, Judge Jones’ next order will be “roll on two.” However, there is a very good chance that this evidence does not exist, and in this alternative ending, an emotional Paul Edgcomb will quietly escort Mr. Moore out of the death house. Read More

Written by | Posted in FBAR

OVDP And Double Counting: Oh The Agony! – Part II

This is a continuation of Part I. This hypothetical pertains to a taxpayer who has applied to OVDP and who has transferred assets from one foreign account, which was recently closed, to another during the disclosure period.

This is a simple example, yet it illustrates some of the common mistakes that are associated with double counting.

Joe has applied to the OVDP. He had two foreign accounts in 2010: one at Bank A and another at Bank B.

The opening balances in each account were as follows: Read More

Written by | Posted in OVDP

How Do Taxes Influence Behavior?

Legislators have three needs in mind as they prepare tax laws- -the need to raise revenue, the need to be fair to taxpayers, and the need to influence taxpayers’ behavior. Below are three excise taxes that have affected the economy and consumers’ behaviors. All are direct taxes.

A sin tax is used to discourage the use of products and services that could pose a risk to someone’s health, such as alcohol and cigarettes. Puritan colonists used the earliest sin taxes in this country.

The gasoline excise tax is a user tax on gasoline purchases. People who use gasoline pay taxes on it. These revenues maintain and build roads and highways and regulate Read More

Written by | Posted in TaxConnections

Facing The Music

When I was a young, fresh-faced criminal defense attorney, there was an aged judge on one of the local benches. Courthouse rumor persisted that this gentleman, whose name I cannot recall, was a finalist to serve as Alf Landon’s running mate in 1936. The judge would occasionally say that his particular fiefdom should be called “County Dumb Court” instead of “County Criminal Court.” While his rhetoric was a bit overblown, at least in my humble opinion, his underlying point was valid. Almost all the defendants who approached the bench were there not because they had done something malicious, but because they had made a poor decision under pressure, misunderstood the law or been trapped on a technicality.

In a way, tax court is much the same. The petitioners are certainly not “dumb” in any way, Read More

Written by | Posted in Federal • Income Tax • IRS • Tax Fraud/Evasion/Crimes

Ms. Fournie Shows Fortitude in Fight Against the IRS

Undeclared accounts are the latest bane for Swiss banks, which are being pushed to the brink by U.S. authorities to release details of their U.S. accountholders who park assets there in order to avoid paying U.S. taxes. Many Swiss banks have what are referred to derogatively as, “recalcitrant accountholders.” Recalcitrant accountholders are those who, despite the bank’s prodding, refuse to report their foreign accounts to the IRS. Very simply, this group is what stands in the way of a “cooperating” bank opening up the kimono – i.e., by sending the U.S. government the records of its U.S. accountholders – and the pot of gold at the end of the rainbow: immunity from prosecution and overbearing penalties. Soon, the Foreign Account Tax Compliance Act (FATCA) will change all that. If the United States’ demands to expose tax-evaders are fulfilled, all data on these recalcitrant Read More

Written by | Posted in FBAR • OVDP • Tax Fraud/Evasion/Crimes

Swiss Bankers Skirt Jail Time in U.S. Tax Evasion Case Thanks To ‘Cooperation Agreement’

A combined fine of $225,000 and five years of unsupervised probation without jail time was handed down to two former bankers of Credit Suisse AG. Josef Dörig and Andreas Bachmann, both Swiss nationals, received the reduced sentence due to their cooperation with U.S. authorities.

Their crime: helping U.S. citizens evade taxes. Just one year ago, Credit Suisse pleaded guilty to “knowingly and willfully” assisting numerous American clients to commit tax evasion. How? By helping its U.S. clients open accounts and then hide the income generated by those accounts from the IRS. The penalty – which is considered to be the “cornerstone” of plea agreements when a company is the defendant in a tax evasion case – did not come without a price. In order to make “peace” with the U.S. government, Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

Peter Amrein: The Latest Swiss Banker To Have His Head Put On The Government’s Chopping Block

The Justice Department just recently announced its latest catch: Peter Amrein, a Swiss citizen and former asset manager at a Swiss asset management firm. Mr. Amrein pleaded guilty to one count of conspiracy to defraud the IRS, to evade federal income taxes, and to file false federal income tax returns. By way of his allocution during the plea hearing, Mr. Amrein acknowledged entering into an agreement with U.S. taxpayer-clients and others to help U.S. taxpayers hide millions of dollars in offshore accounts from the Internal Revenue Service (IRS), and to evade U.S. taxes on the income earned in those accounts.

The allegations in the superseding Information and the prior indictment lay out the sordid details. Mr. Amrein started out as a client advisor at a Swiss bank (Swiss Bank No. 3), later working his way up to an asset manager at a Swiss asset management firm (the Read More

Written by | Posted in Tax Fraud/Evasion/Crimes

OVDP And Double Counting: Oh The Agony!

What is this phenomenon known as double counting? Why is it important? If you are shepherding clients through the OVDP program, or you are going through the program yourself, it is critical that you understand what it means and the governing principles behind it. Otherwise, you could be paying an offshore penalty that is exponentially higher than what it ought to be.

This article will explain the principles behind double counting and what type of supporting evidence the taxpayer must produce in order to prove double counting to the satisfaction of the IRS. As is my ordinary practice, I will make use of a hypothetical.

As a refresher, the offshore penalty is determined by isolating the highest aggregate Read More

Written by | Posted in OVDP
« Older Entries   Recent Entries »