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Tag Archive for DOJ

Hiding Money Or Income Offshore Among The List Of Tax Scams For The 2015 Filing Season

IRS Commissioner John Koskinen was proud to announce that “the recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore and he encouraged taxpayers to come in voluntarily and getting their taxes and filing requirements in order.”

Since the first Offshore Voluntary Disclosure Program (OVDP) opened in 2009, the IRS reports there have been more than 50,000 disclosures and the IRS has collected more than $7 billion from this initiative alone. The IRS also has conducted thousands of offshore-related civil audits that have produced tens of millions of dollars. Finally, the IRS has also pursued criminal charges leading to billions of dollars in criminal fines and Read more

U.S. Cracks Israeli Bank Leumi – Bank Admits to Assisting U.S. Taxpayers in Hiding Assets in Offshore Bank Accounts

Americans with Israeli bank or other financial accounts could face a tough tax season in 2015 if they do not come forward and disclose their assets to the IRS. Israeli banks have come under increased scrutiny by the IRS in regards to disclosing the accounts of their American clients. In particular, three Israeli banks- Bank Hapoalim, Bank Leumi and Mizrahi Tefahot- have been under investigation by the Department of Justice.

The first Israeli bank to now bow to the United States is Bank Leumi. A deferred prosecution agreement between the Bank Leumi Group and the U.S. Department of Justice was filed today in the Central District of California that defers prosecution on a criminal information charging the bank with conspiracy to aid and assist in the preparation and presentation of false tax returns and other documents to the Internal Revenue Service. This is the same type Read more

The New American Expat: More Collateral FATCA Damage

As I reported in a previous article, the Department of Justice (DOJ) and the IRS instantly began to drool in anticipation when The Foreign Account Tax Compliance Act was passed in March of 2010. This gives them enforcement tools to make foreign countries and banking institutions play by our rules whether they like it or not. The Department of Justice has gone even further thinking it has been given the power to make foreign treaties without the constitutionally required Senate ratification. The Senate so far doesn’t seem to mind, but some other countries and taxpayers are taking offense.

FATCA Basics

FATCA gets its teeth from two provisions: Read more

Swiss Banks Unite And Fire Back At The Department of Justice

Neutrality is Switzerland’s unwritten motto. This devotion to conflict avoidance kept the Swiss out of two World Wars. The Swiss are known for their diplomacy, hospitality, and the ability to keep a secret. So, it came as a shock when 73 Swiss banks joined ranks to inform the U.S. Department of Justice and the IRS, politely but firmly, that they would not be signing a proposed amnesty deal under FATCA.

The Basic Facts of FATCA

In March of 2010, the Department of Justice and the IRS were given a new enforcement weapon. The Foreign Account Tax Compliance Act (FATCA) has three primary objectives regarding foreign financial institutions: Read more

Ex-Seyfarth Shaw Attorney Case: The Latest in a Series of Department of Justice Prosecutions For Tax Shelter Fraud

Recently, tax shelters have become the target of much prosecution by the Department of Justice. In the largest criminal tax case ever filed, professional services company KMPG LLP admitted to engaging in fraud and generating at least $11 billion dollars in false tax losses. The multi-billion dollar criminal tax fraud conspiracy involved the elaborate design, marketing, and implementation of fraudulent tax shelters.

Since the 2005 KPMG indictment and subsequent guilty plea, the Department of Justice has continued in its quest to uncover instances of tax shelter fraud. The case of Chicago tax lawyer and former Seyfarth Shaw LLP partner, John E. Rogers, is among the latest in a series of tax shelter fraud criminal prosecutions. Starting in 2010, the U.S. Department of Justice targeted John E. Rogers, ex-Seyfarth Shaw LLP partner, with a civil suit alleging he Read more

Standards For Prosecuting Tax Crimes And What They Mean For The Public

The government is not required to prosecute persons whom it believes has violated the law. Certainly, in the tax context, only a small percentage of people who are known or reasonably suspected to have committed a tax crime are investigated and prosecuted. Judgment calls abound – from the first discovery of information through prosecution.

Given the limited resources that can be applied to tax prosecutions, the government must be highly selective. The ability to “pick and choose” which cases it prosecutes is the reason why it has such a high conviction rate. The message from Uncle Sam to taxpayers is this: “Sure, we don’t prosecute all tax cheats, but if we get you in our prosecution cross-hairs, you are dead.” Read more

IRS Wins Tax Shelter Penalty Case And DOJ Going Back Into Cases Affected By The Decision

The United States Supreme Court agreed with the Internal Revenue Service and sustained the assessment of a 40% penalty against the taxpayer who invested in a 1990s tax shelter.

The decision, U.S. v. Woods, reversed a 5th Circuit opinion which held that the 40% penalty did not apply in sham partnership cases and declared the issue “well settled.”

The Woods’ case got to the Supreme Court to resolve a split between two circuits that found for the taxpayers in these type of case and other circuits that found for the IRS.  The issue involves the maximum income tax penalty that can be imposed on a tax shelter investor. More specifically, this decision resolved the issue concerning whether the penalty Read more

Walliser Kantonalbank Becomes Most Recent Swiss Bank To Accept US Deal

Yesterday we posted “Monday was the Swiss Bank’s Deadline to Reveal Hidden US Accounts to the IRS!” which discussed that approximately 300 Swiss Banks have until the end of today, Monday December 16, 2013, to decide whether to turnover their records to the Internal Revenue Service.

Today Walliser Kantonalbank became the latest Swiss bank to Accept United States Deal to avoid prosecution.

In a statement, Walliser Kantonalbank said that it had never focused on acquiring American clients but that it was unable to guarantee that all U.S. customers had fully complied with their United States tax obligations. Read more