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Tag Archive for Offshore Accounts

The IRS Will Soon Be Asking Questions PART I — Nominees and FATCA

In my tax practice in the Middle East, it is very common for family members to have legal title to assets they do not own. For example, it is common for a parent to have the eldest son hold legal title to property in which the child has no beneficial interest whatsoever; sometimes the nominee relationship is entered into in an attempt to circumvent forced inheritance shares of Sharia law, or to avoid probate.

What is a Nominee and How Does a Nominee Relationship work?

A nominee is a person or entity named by another party (called a “nominator”) to hold title to a certain property. The nominee is the registered owner of the property but he is not the beneficial owner. All rights and incidents of true ownership belong to the beneficial owner and essentially, the nominee stands in a position of trust to follow the orders of the Read more

Swiss Account Holders – Losing The Right To Be Informed About IRS Disclosure

The Swiss continue to cave in and erode any bastion of bank secrecy within its picture perfect borders. The Swiss Parliament voted on March 6, 2014 to turn over information to foreign governments on certain account holders with undeclared accounts in Swiss financial institutions without providing the holders any advance notice of the disclosure. The move was in reaction to the 2011 admonishment to Switzerland by the Global Forum on Transparency and Exchange of Information for Tax Purposes to take measures to increase its tax transparency. If Switzerland took no action, it risked being placed on a global blacklist. The Global Forum is a division of the Organization of Economic Co-operation and Development (commonly referred to as “OECD”). We understand that the amendment must be finally approved at the end of the current Swiss legislative Read more

Report to Congress: Credit Suisse Helps US Taxpayers Hide Billions in Offshore Accounts!

Permanent Subcommittee on Investigations (PSI) of the United States Senate held a hearing, “Offshore Tax Evasion: The Effort to Collect Unpaid Taxes on Billions in Hidden Offshore Accounts,” on Wednesday, February 26, 2014, in Room G-50 of the Dirksen Senate Office Building.

The PSI hearing on February 26 is for the stated purpose of continuing the PSI’s examination of tax haven bank facilitation of U.S. tax evasion, focusing on the status of efforts to hold Swiss banks and their U.S. clients accountable for unpaid taxes on billions of dollars in hidden assets. Witnesses include representatives from Credit Suisse and the U.S. Department of Justice. Read more

The United States Knows Where Offshore Tax Evaders Live And Bank!

The United States is tracking down hidden offshore accounts, and the latest news is a report that shows which states have the most taxpayers disclosing such accounts (California is No. 1), and where they are located (Switzerland is tops).

Taxpayers in at least 45 states and the District of Columbia reported accounts in 68 countries and territories.

The new U.S. Government Accountability Office report: “IRS’s Offshore Voluntary Disclosure Program (OVDP): 2009 Participation by State and Location of Foreign Bank Accounts,” is a supplement to its March 2013 report, “Offshore Tax Evasion: IRS Has Collected Billions of Dollars, but May be Missing Continued Evasion.” Read more

More U.S. Taxpayers Admit to Secret Swiss Accounts

Why Swiss Bank Clients Who Can’t Stand the Heat Are Getting Out of the Kitchen –

Every July, people from around the world descend upon a small village in Spain called Pamplona for the fiesta of San Fermin. Encierro, or “The Running of the Bulls,” is the event at the heart of the fiesta. The fiesta is celebrated in honor of San Fermin, patron saint of Navarra, although the religious aspect would seem to have taken on a secondary role over the last number of years.

The bull-run is a spectacle unlike no other. It is defined by the level of risk and the physical ability of the runners. After the launching of two rockets, a herd of six bulls is released from Read more

Swiss Continue To Cave In

Kathryn Keneally, assistant attorney general in the tax division at the US Department of Justice (DOJ) stated just a few days ago that 106 Swiss banks have already signed on to the Swiss-DOJ non-prosecution program (Program) announced at the end of August 2013. The Program is designed to encourage all Swiss banks to come forward and admit the role they played in assisting US persons to evade tax. Participating banks that meet all of the demands made by DOJ are eligible for non-prosecution agreements (employees and agents of the banks are not protected). Any Swiss bank that was already a target of US criminal investigation could not apply – 14 Swiss banks are ineligible under this provision.

The number of banks signing on to the Program (approximately one-third, as it was Read more

US Tax – International Provisions: KISS – Keep It Simple Sweetheart

On Tuesday, December 3, the American Bar Association, Section of Taxation: United States Activities of Foreigners & Tax Treaties Committee (“Committee”) submitted to Congress various “Options” offering proposals for simplification and clarification of various international tax provisions of the Internal Revenue Code. The Committee made some excellent suggestions and one can only hope Congress will take heed. The Committee noted that a remedy is needed to remove many “traps for the unwary” and to ease compliance burdens that cannot reasonably be met.

Tax professionals can learn a great deal about the current law in the areas discussed by reading this proposal. Tax traps are carefully pointed out and the proposal should be required reading for practitioners involved with international tax issues. Read more

DOJ / IRS Obtain Court Orders to Seek Offshore Account Data From Five U.S. Banks!

United States District Judge Kimba M. Wood of the Southern District of New York entered an order on November 7, 2013, authorizing the Internal Revenue Service to issue summonses requiring:

Bank of New York Mellon (Mellon) and Citibank NA (Citibank) to produce information about U.S. taxpayers who may be evading or have evaded federal taxes by holding interests in undisclosed accounts at Zurcher Kantonalbank and its affiliates (collectively, ZKB) in Switzerland.

U.S. District Judge Richard M. Berman of the Southern District of New York entered an order Read more

Spilling The Beans – Advisors Turning in Clients With Offshore Accounts

Swiss bank employees handing over US Depositor information to the United States.My earlier blog post predicts that foreign banks will tell all in order to avoid criminal prosecution for aiding tax evasion. Not only will the foreign banks tell all – it looks like personal financial advisors will be getting in on the act, too. Evidence of this can be gleaned from a recent article published by the Wall Street Journal (August 23, 2013), “Offshore-Adviser Plea Marks a Shift in Tax Crackdown”.

Laura Saunders, the author, believes that a recent guilty plea by a high-level Swiss adviser who helped United States taxpayers hide money overseas indicates a shift toward a new phase of the US Government’s campaign against undisclosed offshore holdings. The Government is making deals with the advisors who are willing to spill the beans. This latest tactic obviously gives the Government yet another very powerful weapon in its stockpile to combat offshore tax evasion.

A chart summarizing significant statistics about offshore account cases also accompanied Ms. Saunder’s article. It is quite revealing and is reproduced below. The numbers clearly demonstrate the IRS has hit the penalty jackpot by relentlessly pursuing undeclared foreign accounts. With all the penalty money coming at a time when the US debt is spiraling out of control, it is unfathomable that the Government will not do all in its power to keep riding this tidal wave of greenbacks. The statistics demonstrate that more US taxpayers have been criminally charged since 2009 than the number of taxpayers who have pled guilty or suffered a guilty verdict. The pressure is on and it looks more than likely that the number of pleas or verdicts will just continue to climb as the IRS keeps learning more and more. Read more

Options Available for US Taxpayers With Offshore Accounts and/or Entities!

TaxConnections Blog post regarding OVDPThe IRS’ focus on offshore enforcement efforts and related disclosure programs has raised awareness among many U.S. citizens about their tax filing and information reporting obligations.

Situations of taxpayers with offshore compliance issues vary widely given the complexity of this area of tax law. Taxpayers that recently learned of these tax requirements should also be advised of the many options that are available, outside of the normal filing process, to help them get current with their tax obligations.

A number of the common situations and potential solutions are outlined below.

Compliance Option 
Taxpayers who have properly reported all taxable income but recently learned that he/she should have been filing FBARs in prior years to report a personal foreign bank account or to report signature authority over bank accounts owned by an employer.

Taxpayers who reported, and paid tax on, all their taxable income for prior years but did not file FBARs, should file the delinquent FBAR reports according to the instructions (send to Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621) and attach a statement explaining why the reports are filed late.The IRS will not impose a penalty for the failure to file the delinquent FBARs if there are no underreported tax liabilities and you have not previously been contacted regarding an income tax examination or a request for delinquent returns. Read more

Offshore US Tax-Dodger Dragnet Widens!

Offshore Voluntary Disclosure Blog PostThe United States government, stepping up its pursuit of American offshore tax dodgers worldwide, stands to gather an abundance of leads through a bank information – sharing deal between the United States and Switzerland, tax lawyers said on September 3, 2013.

Last week we posted Swiss Banks Agree to Plan to End Past US Tax Evasion Issues which marked a turning point in a lengthy dispute between Bern and Washington, and opened the door for about 100 second-tier Swiss banks to turn over information about American account holders to the U.S. government.

Part of the deal requires Swiss banks to tell Washington about so-called leavers, or U.S. customers who shift assets to other countries. This disclosure will be a powerful tool for U.S. authorities, who started turning up the heat on offshore tax avoidance in 2008.

In a statement last week on the pact, the U.S. Justice Department noted that its tax enforcement activities are global and have included actions undertaken in India, Luxembourg, Israel and Caribbean countries. Read more