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Tag Archive for foreign bank accounts

FATCA Historical (R)evolution:  The War On U.S. Criminals With Foreign Bank Accounts; A Subsidiary Of The Wars On Everything Else (i.e., Terror, Drugs, etc.) Part II

In FACTA Part I, I argued that in light of the Joint Committee on Taxation (JCTX-5-10),[1] Congress failed to engage in the necessary due-diligence to reasonably relate FATCA to the collection of tax revenue lost through “tax schemes” and “tax evasion” by U.S. persons with foreign financial institution accounts.  Congress operates as America’s legislative fact-finder.  They are charged with determining whether relevant and reliable evidence negates the underlying policy-purpose for a particular law, when presented with evidence to that effect.  JCTX-5-10 was directly relevant because it offered a direct answer to the question of “how much” FATCA revenue.  As for reliability, the Joint Committee on Taxation produces some of the most reliable evidence on The Hill, and this was no exception to that general rule.  Congress knew FATCA would collect less than one-half of one-percent of what was sworn to during the Ways and Means hearing estimates.[2]  They also knew that even after ten-years, FATCA would not fully-fund the Hiring Incentives To Restore Employment (HIRE) Act (and that does not take into account the costs for implementation and renewed requests for additional expansion and implementation funding).

In Part II, I want to touch on three related areas of concern.  First, and as has been discussed by more than a few other people, the $10B that the IRS collected between 2009 and 2016 included a disproportionately low amount of tax revenue coupled with a substantial amount of penalties associated with FBAR.  Further, alongside a disproportionate amount of penalties, FATCA and Offshore Voluntary Disclosure Programs (OVDP) illegally filled the gap left by Qualified Intermediaries (QI) pooling, forcing foreign financial institutions to report on the account value of U.S. persons in violation of their own law, and if reproduced domestically, in violation of our own laws as well.[3]  Finally, FATCA has become a continuation of the IRS war on FBAR perpetrated by Treasury’s Financial Crimes Enforcement Network (FinCEN), federal law enforcement and the intelligence community all of which sought to curtail the use of secret foreign bank accounts for illegal purposes (e.g., tax evasion as well as securities manipulation, insider trading, evasion of Federal Reserve margin limitations, storing and laundering funds from illegal activities, and acquiring control of U.S. industries without detection by the SEC) [4] by establishing a worldwide-financial-industry informant system.[5]

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U.S. Attorney & Swiss Firm To Resolve Tax Investigation

Prime Partners SA Will Pay $5 Million in Forfeiture and Restitution; Receives Non-Prosecution Agreement As a Result of its Extraordinary Cooperation

Joon H. Kim, the Acting United States Attorney for the Southern District of New York, Stuart M. Goldberg, Acting Deputy Assistant Attorney General of the Justice Department’s Tax Division, and James D. Robnett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), announced today that Prime Partners SA (“Prime Partners”) entered into a non-prosecution agreement (“NPA”) with the U.S. Attorney’s Office and agreed to pay $5 million to the United States for assisting U.S. taxpayer-clients in opening and maintaining undeclared foreign bank accounts from 2001 through 2010. Read more

The OVDP Program May End After 2017

Ron Marini

U.S. taxpayers who have foreign bank and/or financial accounts should be watching the clock. The window to voluntarily report foreign accounts in order to mitigate IRS penalties may be ending after 2017.

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Some Cautions Affecting Your Tax Situation

For this post, I will present some news about tax topics that may affect your current situation: earned income tax credit (EITC), delayed nonresident refunds, and expatriate income tax.

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Story of A Good Citizen Who Reports Foreign Bank Accounts But Forgets FBARs! Huh?

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

Trouble In Paradise

Former Congressman Barney Frank recently remarked that the financial reform law that partially bears his name is in a unique position, because “No program in American history could more clearly combine two elements: great success and absolute unpopularity.” While the jury is still out on the “great success” of Dodd-Frank, there is no doubt that everyone hates it.

Many Democrats, especially progressives like Senators Bernie Sanders and Elizabeth Warren, don’t think the law went far enough towards reigning in the big banks. There is even talk in some quarters about blowing the dust off the Depression-era Glass-Steagall Act, which might effectively break up Wall Street banks the way the government broke up Ma Bell a generation ago. Read more

EXPATRIATE DAY! – MONDAY, SEPTEMBER 21, 2015

You Are Invited To Be Part of Internet History…
Join TaxConnections as we present incredible Tax Experts on Expatriate Day at the Internet Tax Summit on Monday, September 21, 2015 beginning at 7:30AM (PDT).

 

Listen to stories from Expatriates around the world and learn from these Tax Experts about what to do to stay compliant with U.S. Tax Laws. Learn about FBAR, FATCA, Amnesty or Quiet “Voluntary Disclosure” of Foreign Bank Accounts, Exit Taxes and so much more. Read more

The Choice: Amnesty Or Quiet Disclosure For Foreign Bank Accounts: Criminal Tax Evasion, Negligence, Or Ignorance?

Preliminary Introduction For TaxConnections Global Internet Tax Summit, September 21-25, 2015

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

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

So What’s The New Buzz On Foreign Bank Accounts?

When looking for a picture for this post, I came across this one and remembered my college English Professor. She really loved the term, “Freudian Slip” for some reason! All I knew then was that Sigmund Freud was the father of psychoanalysis but I never quite understood how that related to a Business English class, unless that was the Professor’s way of telling us we were driving her nuts! Now I know that the term, “Freudian Slip” is a “mistake in speech that shows what the speaker is truly thinking” or “to do what one is truly thinking about”.

No, this post is not about defining psychoanalytic terms, dare I say more interesting than tax stuff? Not quite, but this post is about the latest buzz from the Internal Revenue Service, about some situations US taxpayers having foreign accounts might be in and their Read more

Alphabet Soup For Form 8938

Overview

On March 18, 2010, the “Hiring Incentives to Restore Employment Act” or “HIRE Act” was signed into law. Section 511 of the HIRE Act created I.R.C. § 6038D. This section requires specified individual taxpayers with an interest in “specified foreign financial assets” to file Form 8938 if the aggregate value of those assets exceeds the applicable reporting threshold. The applicable reporting threshold is generally $ 50,000, but higher asset thresholds apply to U.S. taxpayers who file a joint tax return or who live abroad.

Tax practitioners dread Form 8938 in large part because it means more, and often times duplicate, reporting. For example, a taxpayer with more than $ 10,000 in an offshore account already must file a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS. But in a post-Form 8938 world, that same taxpayer must file a separate Form Read more

You Have Foreign Bank Accounts? Questions Your Tax Preparer Should Be Asking!

My expression was a jaw dropping experience when a client of ours revealed their foreign bank account balances a month after we had filed their tax returns. A long lecture about foreign account balances, and an Amended Tax Return followed with required attachments. We quickly realized the need for the right questions in the December Tax Organizer. This was a few years ago and there have been many updates to those questions now.

Unfortunately there are many taxpayers out there who are still unaware of their filing/ reporting requirements. More details on the requirements in my post here. And many a time this is because they have not been educated of their requirements by their tax preparers. Read more

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