In February, we discussed the growing sentiment that the U.S. is the new tax haven, a notion underpinned by the increasing number of international families moving their assets out of traditional offshore jurisdictions and into trusts in certain states in the U.S. We also discussed that some level of secrecy is still available in the U.S. because Washington has not signed up to the OECD Common Reporting Standard (CRS) for international information exchange, preferring instead its own Foreign Account Tax Compliance Act (FATCA).
Archive for FATCA
The IRS keeps updating its list of foreign banks which are turning over the names of their U.S. account holders. These people are now subject to a 50% (rather than 27.5%) penalty in the IRS Offshore Voluntary Disclosure Program (OVDP). This penalty is based on the highest account balance measured over up to eight years.
DoJ announced on May 9, 2016, that Gregg R. Mulholland, a dual U.S. and Canadian citizen of San Juan Capistrano, California and Vancouver, Canada, Age: 46 and secret owner of Legacy Global Markets S.A. (Legacy), an offshore broker-dealer and investment management company based in Panama City, Panama, and Belize City, Belize, pleaded guilty to money laundering conspiracy for fraudulently manipulating the stocks of more than 40 U.S. publicly-traded companies and then laundering more than $250 million in profits through at least five offshore law firms.
When sentenced, Mulholland faces up to 20 years in prison.
More than 1,700 entities disclosed on the Panama Papers leak have also registered with the IRS that they comply with FATCA
Following yesterday’s Panama Papers Leak it can be seen that at least 1,700 legal entities on that list are also on the IRS list that “includes all foreign financial institutions and branches with approved FATCA registration at the time the list is compiled”.
Panama Papers Leading to 30 Country Interlinked Beneficial Ownership Registry for Company and Trusts
Over 20 countries have joined the UK-led pilot to automatically share ownership information for companies. As such their tax and law enforcement agencies will now exchange data on company beneficial ownership registers and new registers of trusts enabling more effective investigation of financial wrongdoing and tax-dodging. [See free SSRN download of Lexisnexis® Guide to FATCA Compliance 2016] Read more
Is This Canadian Baby An American Tax Cheat?
A Canadian baby is learning about taxes, banking and activism at a tender age. The eight month old girl received a “Dear Valued Customer” letter from her Canadian bank when she was six months old advising her that her account information may be provided to Canada Revenue Agency to pass on to IRS. The wee “Valued Customer” was directed to complete, sign and mail forms to the bank.
Baby Elle (not her real name) and her Canadian parents were Read more
We previously posted, Get Ready For The US Proposed Plan to Require Banks to Identify Owners of Shell Companies! where we discussed that the United States government is close to issuing a rule that will for the first time require banks and other financial institutions to find out the identities of people hidden behind shell companies.
The rule is meant to close a major loophole in the American Read more
Commentary on the The Panama Papers & The Disclosure of 14,000 Clients’ 214,000 Offshore Companies Files and Assets
A leak of searchable 11.5 million files, that’s 2.6 terabytes of data, from the embattled offshore services provider Mossack Fonseca. Every email, client note, asset and income statement, instruction, communication, .. since 1977! 2.6 terabytes of data, 11.5 million files, is a lot of files and scanned documents to comb through, so this leak is potentially, and probably, more significant than the 2014 ICIJ reported on leak or even the HSBC and UBS’ leaks. Read more
IRS has made several corrections in Notice 2016-8, Timing of Submitting Preexisting Accounts and Periodic Certifications; Reporting of Accounts of Nonparticipating FFIs; Reliance on Electronically Furnished Forms W–8 and W–9 .
IRS has now made the following corrections to Notice 2016-8:
1. Preexisting Account Certifications.
Participating FFIs and reporting Model 2 FFIs are required to certify to IRS that, within the applicable timeframe for preexisting Read more
On Thursday, February 11, 2016 we posted IRS “Dirty Dozen” Tax Scams for 2015 we discussed that the Internal Revenue Service wrapped up the 2015 “Dirty Dozen” list of tax scams today with a warning to taxpayers about aggressive telephone scams continuing coast-to-coast during the early weeks of this year’s filing season, where it stated that avoiding taxes by hiding money or assets in Read more
A feature article in the Bloomberg suggests that some international families are moving their assets out of traditional offshore jurisdictions and into trusts in certain states of the US. It notes that some level of secrecy is still available in the US because Washington has not signed up to the OECD Common Reporting Standard (CRS) for international information exchange, preferring instead its own Foreign Account Tax Compliance Act (FATCA). Read more
By Ephraim Moss, Esq. & Joshua Ashman, CPA
For most U.S. citizens living abroad, life is pretty good – at least that’s what the latest statistics are telling us. In a 2015 survey of thousands of expats worldwide, a whopping 81% responded that they are generally happy with life overseas.
At the risk of spoiling this picture of expat bliss, further statistics show, however, that most U.S. expats are failing quite miserably in the area of tax compliance.
The reason is basically two-fold. First, there are millions of U.S. citizens living abroad that simply don’t file returns despite their continuing obligation to do so. Many of these expats are Read more