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
Philip Wrigley had a problem. As the notoriously parsimonious owner of the Chicago Cubs in the 1970s, Mr. Wrigley did not want to spend big money to attract top players. But as the savvy owner of a successful confectionary business he also knew that no one would buy tickets to see a perennially second-division ball club. So he came up with the idea of the “loveable losers” a slightly-above average team that could win 80 or 85 games in a season.
The point of this story is that Mr. Wrigley did not want to be penny Read More
A lot has been written about the Foreign Account Tax Compliance Act {FATCA} in the past year. As this year comes to a close and I write up this post, I wanted to give you all, my dear readers a synopsis at your finger-tips, a round-up, if you will of some major FATCA events for 2015:
1. FBAR Deadlines Changed:
On July 31, 2015 President Obama signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 into law, which modified the due date of several key forms for Americans with foreign income and Americans living abroad. That includes the Report of Foreign Bank and Financial Accounts, or Form 114, colloquially known as the FBAR.
Any U.S. person with a financial interest in, or signatory authority over, foreign financial accounts must file the FBAR, if at any time, the aggregate value of their relevant foreign account or accounts exceeds $10,000. An account over Read More
There is a lot of buzz going around these days about FBARs, foreign accounts, foreign corporations, IGAs, tax treaties, more & more Swiss banks on the roll-call list, you name it and they cry “FATCA”! Confusion all-around, fear mongers are having a field day, may be rightfully so, fines are high and penalties higher. People are ready to hit the panic button. Or so one would think!
To quote my favorite Buddhist teacher, Thich Nhat Hanh here, “People have a hard time letting go of their suffering. Out of a fear of the unknown, they prefer suffering that is familiar.”
If you are wondering what a Thich Nhat Hanh quote is doing on a tax blog but you have one hand hovering over the panic button, just think about it…without going into many of Buddhism’s wonderful practices let me assure you, do decide to end your suffering, however first- DON’T PANIC! Second, hire yourself a good Enrolled Agent who Read More
I have to say today’s blog post was triggered by a phone call a few weeks ago. The would-be client wanted to report his foreign bank accounts. Apparently, this good citizen had all his I’s dotted & T’s crossed – so to speak – so what was the problem you ask? I hate to say this, but it happens more than you would think. He did not know there were additional reporting requirements involved when it came to bank accounts in foreign financial institutions. (More on FBAR thresholds in my post here)
You have to know that the IRS will not impose a penalty for the failure to file the delinquent FBARs if you “properly” reported the foreign bank accounts on your US tax returns, and paid tax on the income from these accounts and have not been contacted by the IRS for an income tax examination or a request for the delinquent returns has not been made by them. Read More
In 1811, President James Madison started the Federal Conscience Fund, which allows guilt-ridden Americans to surreptitiously atone for their financial sins. Over the years, generous benefactors have achieved various levels of catharsis. Typical donors range from guilty individuals, such as a Massachusetts woman who mailed in nine cents, because she re-used three postage stamps, to a government contractor haunted by the ghosts of Christmas past who sent in some $400,000.
Predictably, many people send in offerings to clear their consciences “with the IRS and with God.” One anonymous woman generously offered a few hand-made quilts to settle her tax debt. But perhaps the best of all is a man who emptied his conscience by writing, “I cheated on my income taxes and haven’t been able to sleep. So, I enclose a cashier’s Read More
The most recent IRS push to close “the Gap” between collected U.S. tax revenue and the total tax revenue which should be reported by U.S. citizens and alien residents of the United States has focused on offshore income concealed in foreign or offshore accounts.
U.S. citizens are liable for U.S. taxation on all income realized globally, regardless of the foreign jurisdiction in which their funds are deposited in foreign accounts. U.S. citizens are not only liable for U.S. tax on such foreign sources of income, they are required to report all funds in excess of $10,000.00 on deposit in foreign accounts over which they have “signature authority” even if they only have a nominal “financial interest” in the Read More
The South African Revenue Service (SARS) has announced an amnesty of sort – a threat and upfront warnings: we do know about you, best you come forward before we make the tax audit into your affairs known.
On July 9th, 2015, SARS issued a press release, which can be read in more detail on:
The International Consortium of Investigative Journalists (ICIJ), based information obtained by French newspaper Le Monde, ranked South Africa number 31 among the countries with the largest amount of dollars ($2.3blion) in the so-called leaked Swiss Read More
With an estimated 8.7 Million expatriates living around the world, many are unaware of their U.S. tax filing obligations. For those following the issues surrounding FATCA, they are well aware that expatriates are angry and scared. For the two-thirds of the U.S. expatriates who are still unaware, we bring knowledgeable experts who will explain what is happening and get you up to date at the Internet Tax Summit scheduled September 21-25th 2015. The first day of the Internet Tax Summit, expatriates will be able to go online and learn what is happening from tax experts, get answers, and get the help they need. You can expect this historical, free online event is certain to get millions of expatriates up to speed on the only country in the world with citizen based taxation. We promise the information you learn will be STUNNING! Read More
On June 19, 2015, the Department of Justice announced that two more banks reached resolutions under its Swiss Bank Program. Those banks are Bank Linth LLB AG (Bank Linth) and Bank Sparhafen Zurich AG (BSZ).
According to the terms of the non-prosecution agreements, each bank has agreed to cooperate in any related criminal or civil proceedings, demonstrate that it is implementing controls to stop misconduct involving unreported U.S. accounts, and pay penalties. In exchange, DOJ has agreed not to prosecute these banks for tax-related crimes.
In addition, each bank is encouraging its U.S. accountholders to come into compliance Read More
Since the time the IRS announced the revised Offshore Voluntary Disclosure Program, there has been a consistent restlessness among American expats. At the forefront of this change is the inclusion of the Streamlined Compliance Procedure Program, which is available to U.S. individual taxpayers residing in the United States as well as those who live abroad.
The Streamlined Foreign procedures cater to those U.S. citizens or lawful permanent residents – i.e., expats – who satisfy the non-residency requirement. The non-residency requirement has two strands. First, the taxpayer must not have a U.S. abode. And second, the taxpayer must have lived outside of the U.S. for at least 330 full days in at least one (or more) of the most recent three years for which the U.S. tax return due date (or properly Read More
Most U.S. taxpayers who enter the IRS Offshore Voluntary Disclosure Program must pay an offshore penalty equal to 27.5 percent of the highest year’s aggregate balance of their offshore accounts during an eight-year look-back period. On August 4, 2014, the IRS increased this penalty from 27.5% to 50% if the following conditions exist:
(1) At the time the taxpayer initiated their disclosure, one or more of the following applies:
a. A foreign financial institution at which the taxpayer had an account had been publicly identified as being under investigation, the recipient of a John Doe Summons or is cooperating with a government investigation, including the execution of a deferred prosecution agreement or non-prosecution agreement; or Read More
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