In a very recent decision (Maze v. IRS), the D.C. Circuit Court of Appeals upheld a lower court decision blocking several taxpayers’ efforts to leave the OVDP tax amnesty program and enter the friendlier IRS Streamlined program without utilizing the required transition rules.
The Maze case demonstrates the importance of choosing the IRS tax amnesty program that is right for you from the outset. Read More
Despite the overall success of the IRS tax amnesty programs in recent years, many expats remain hesitant to enter the programs due to a number of misunderstandings surrounding their requirements and their outcomes. In this blog, we separate fact from fiction so that you can decide intelligently whether tax amnesty is right for you. Read More
With the recent heavy focus on Congress and the Trump’s administration’s tax reform proposals, it can be easy to forget that the IRS continues to proactively crackdown on offshore tax evasion. Read More
Recently, the IRS announced that it will focus its audit efforts this year on 13 particular compliance issues, which touch on large business and international activities. This issue-focused effort contrasts with the more broad-based approach that the IRS has previously taken with respect to auditing taxpayers.
The “unfiled FBAR” continues to be a problem for certain Homeland Americans with “offshore accounts” and all Americans abroad, who continue to “commit personal finance abroad”.
Introducing Mr. and Mrs. Kentara
Yesterday, we started this blog post to hopefully encourage those with U.S. tax issues to consider whether they can deal with minor/unintentional FBAR violations as a “stand alone single problem”. There may be no need to escalate and expand one single problem into a multi-dimensional full blown tax problem that may end up with unintended and unanticipated costly professional fees as well as undue time spent! Read on and learn why. Keeping a calm head is most important, even if it is most difficult to do in the face of the scary situation of not being in compliance with the U.S. tax and regulatory regime.
During February 2016 the beleaguered South African Minister of Finance, Minister Pravin Gordhan, made a serious attempt to balance government’s books.
Gordhan was called back after Minister Nene was removed from his position, by President Zuma early December 2015. The true reason for this politically motivated musical chairs, appointing three ministers in less than 4 days, remains a mystery. Point is Nene was removed and Gordhan had to step in and rescue the cash flow and ensure the country did not face junk status.
Is This Canadian Baby An American Tax Cheat?
A Canadian baby is learning about taxes, banking and activism at a tender age. The eight month old girl received a “Dear Valued Customer” letter from her Canadian bank when she was six months old advising her that her account information may be provided to Canada Revenue Agency to pass on to IRS. The wee “Valued Customer” was directed to complete, sign and mail forms to the bank.
Baby Elle (not her real name) and her Canadian parents were 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
This is a continuation of Part I. This hypothetical pertains to a taxpayer who has applied to OVDP and who has transferred assets from one foreign account, which was recently closed, to another during the disclosure period.
This is a simple example, yet it illustrates some of the common mistakes that are associated with double counting.
Joe has applied to the OVDP. He had two foreign accounts in 2010: one at Bank A and another at Bank B.
The opening balances in each account were as follows: Read More
Undeclared accounts are the latest bane for Swiss banks, which are being pushed to the brink by U.S. authorities to release details of their U.S. accountholders who park assets there in order to avoid paying U.S. taxes. Many Swiss banks have what are referred to derogatively as, “recalcitrant accountholders.” Recalcitrant accountholders are those who, despite the bank’s prodding, refuse to report their foreign accounts to the IRS. Very simply, this group is what stands in the way of a “cooperating” bank opening up the kimono – i.e., by sending the U.S. government the records of its U.S. accountholders – and the pot of gold at the end of the rainbow: immunity from prosecution and overbearing penalties. Soon, the Foreign Account Tax Compliance Act (FATCA) will change all that. If the United States’ demands to expose tax-evaders are fulfilled, all data on these recalcitrant Read More
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
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