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
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
At least 21 financial advisers in Switzerland are charged with aiding American tax dodgers are at large. Fearing arrest if they leave Switzerland they essentially are imprisoned within the borders of that country.
For decades, Switzerland has occupied an outsize role in the world of shady international finance. The country’s strict secrecy laws have made it the offshore banking destination of choice for U.S. tax evaders. The Swiss Bankers Association estimates that Swiss banks still hold at least $2 trillion that customers haven’t declared to tax authorities in their home countries. They say that you’re not a self-respecting Swiss bank if you don’t have some dodgy money floating around your system. Read More
Accounting for “double counting” is not child’s play. Your tax attorney will need the following information in order to complete his or her review of your double counting issue. These steps must be repeated for every year in which you believe that there is a double counting issue.
For each transfer, you should provide the following:
(a) The highest balance of the account from which the transfer(s) was made for the tax year in question;
(b) The highest balance of the account into which the transfer(s) was made for the tax year in question; Read More
Since 2009 the IRS campaign against unreported income and undisclosed foreign accounts has morphed from a focus on Swiss banks and large accounts to a kind of everyman’s tax disclosure. But keep in mind that just like when the net is lowered into the water it catches all sizes of fish – the IRS states no undisclosed foreign account is too small to avoid penalties. Many people have problems sleeping because of Foreign Account Tax Compliance Act (FATCA) and the filing requirements of Foreign Bank Account Reporting (FBAR).
FATCA was enacted in 2010 and the IRS has touted that FATCA has been successful so far. The IRS states they have collected US$6.5 billion and they reasonably believe that Read More
On a recent airplane trip from the Bay Area to Southern California, I sat beside a distinguished-looking elderly man. I initiated a conversation with him and found out he was a former judge now living in Mexico. We talked about everything, including taxation.
The former judge admitted that he was an American citizen and he and some of his friends have problems sleeping because of Foreign Account Tax Compliance Act (FATCA). So, I asked him what about Foreign Bank Account Reporting (FBAR), as that was more serious than FATCA. But he had never heard about it. I wondered how many people are like the former judge and his friends who can’t sleep at night because of FATCA and who never heard of FBAR. Read More
On June 18, 2014, the IRS announced major changes in the 2012 offshore account compliance programs, providing new options to help taxpayers residing in the United States and overseas. The changes are anticipated to provide thousands of people a new avenue to come back into compliance with their tax obligations and would largely waive these penalties if taxpayers come forward and show that they didn’t hide the money on purpose.
Separate from United States income tax returns, many U.S. persons are required to file with the U.S. Treasury a return commonly known as an “FBAR” (or Report of Foreign Bank and Financial Accounts; known as FinCEN Form 114), listing all non-US bank and financial accounts. These forms are required if on any day of any calendar year an Read More
This May Be Your One Last Opportunity to Avoid Criminal Prosecution and Increased Civil Penalties!
Since July 1, 2014, the most feared U.S. legislation regarding international tax enforcement – Foreign Account Tax Compliance Act (“FATCA”) – is being implemented by most banks around the world. As part of this compliance, foreign banks from around the world are sending letters to account holders that they believe have, or had, a U.S. tax nexus (or other U.S. connection) requesting information to determine whether such account holders have disclosed their foreign bank accounts to the IRS. The letters from foreign banks generally require an account holder to disclose whether the account has been declared to the IRS through the filing of a Report of Foreign Bank and Financial Read More
This is an updated post. The IRS has offered taxpayers with undisclosed foreign financial accounts the opportunity to “come clean” under its Offshore Voluntary Disclosure Initiative (OVDI) since 2009. According to the Internal Revenue Service, more than 38,000 United States taxpayers have entered the program. They have paid more than $5.5 billion to resolve issues, with an estimated $5 billion yet to come.
What is OVDI? It is a program of limited duration that offers significant benefits to taxpayers who may have engaged in conduct that could be viewed as criminal. Benefits include immunity from criminal prosecution and avoidance of the full brunt of civil penalties that otherwise could far exceed amounts concealed in offshore accounts. The OVDI program Read More
Since 2009, the IRS has offered taxpayers with undisclosed foreign financial accounts the opportunity to “come clean” under its Offshore Voluntary Disclosure Initiative (OVDI). According to the Internal Revenue Service, more than 38,000 U.S. taxpayers have entered the program. They have paid more than $5.5 billion to resolve issues, with an estimated $5 billion yet to come.
What is OVDI? It is a program of limited duration that offers significant benefits to taxpayers who may have engaged in conduct that could be viewed as criminal. Benefits include immunity from criminal prosecution and avoidance of the full brunt of civil penalties that otherwise could far exceed amounts concealed in offshore accounts. The OVDI program can Read More