Tag Archive for OVDP

Don’t Believe The Seven Deadly Myths Of FATCA Non-Enforcement

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 Accounts (commonly known as Read More

Written by | Posted in FATCA • FBAR • OVDP

London Mayor Refuses To Pay U.S. Tax Bill

London Mayor Boris Johnson is being pursued by U.S. tax officials while his former New York counterpart Michael Bloomberg was given an honorary knighthood by Queen Elizabeth last month.

Beware As The U.S. Tax Net Closes On Thousands Of U.S. Citizens Living Abroad.

The Conservative mayor of London – who was born in New York and holds an American passport – just revealed he is being pursued by the U.S. authorities for an unpaid tax demand. The demand reportedly relates to his first home in the UK, which he said was not subject to capital gains tax in England. According to U.S. tax law all citizens are required to file a tax return and pay U.S. taxes, even those with dual citizenship and Read More

Written by | Posted in Income Tax • International • IRS

Not On My Watch

When European financial giant Credit Suisse AG pleaded guilty to assisting U.S. taxpayers evade federal income tax, there was a great deal of swagger at the Justice Department. Former Attorney General Eric Holder, in classic Clint Eastwood style, boldly proclaimed that “no financial institution. . .is above the law,” and that any other bank which dared engage in such “brazen misconduct” would be “prosecut[ed] to the fullest extent possible.” Not to be outdone, Deputy AG James Cole warned investors that, if government investigators began asking questions, “[o]nly through full cooperation will you avoid the most severe sanctions.”

Tough words, indeed. But what is behind the Justice Department’s bravado, and what options do you have if you get a not-so-friendly phone call or if authorities suddenly Read More

Written by | Posted in FATCA • FBAR • IRS • OVDP

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part III

III. Shorthand Formula for a Criminal Offshore Bank Account Tax Case

At the end of the day, an offshore account tax fraud case comes down to proving two key elements:

(1) A substantial tax deficiency, and

(2) Badges of fraud (i.e., acts of concealment concerning the non-reporting of the offshore bank account).

The larger the tax deficiency and the more badges of fraud it can prove, the stronger the government’s case becomes. Read More

Written by | Posted in FATCA • OVDP • Tax Fraud/Evasion/Crimes

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part II

II. Essential Elements of Tax Crimes

a. Willfulness

One small word is all that distinguishes a civil tax matter from a criminal tax matter. That pestilent word is called “willfulness.” It is the cornerstone to any criminal tax matter.

In the criminal setting, the government carries the heavy burden of proving – beyond a reasonable doubt – that the taxpayer acted willfully. Willfulness is defined as an “intentional violation of a known legal duty.”

i. Proving Willfulness For Purposes of the Crime of Failure to File a FBAR Read More

Written by | Posted in FATCA • OVDP • Tax Fraud/Evasion/Crimes

How To Avoid Becoming The Next “Cooked Goose” Gracing The IRS’s Offshore Tax Evasion Table This Thanksgiving – Part I

If your name was mentioned in the same sentence as Raoul Weil, Carl Zwerner, or Ty Warner, you can rest assured that you haven’t been nominated for an academy award or a Pulitzer Prize. Nor did you win the Publisher’s Clearinghouse Award. Instead, you’d have joined a disgraced group of taxpayers who have had the misfortune of being targeted by the U.S. government in their crusade to stamp out offshore tax evasion.

In stark comparison is John Doe, a conflicted taxpayer who recently entered the Offshore Voluntary Disclosure Program (OVDP). Neighbors and friends who run into John are a captive audience for him as he wallows in his self-pity. John regrets the decision to enter OVDP and tells his tale of woe to anyone who will listen: “I don’t know what I’m doing in this program. I know 500 people with foreign accounts like mine, and they’re not coming Read More

Written by | Posted in FATCA • OVDP • Tax Fraud/Evasion/Crimes

What Offshore Delinquent U.S. Individual Filers Need To Know! – Part 4

Is acceptance of a streamlined application automatic for those residing in Canada?

Answer

The primary criteria for acceptance into the Streamlined Foreign Offshore Procedure (“SFOP”) is that the reason for the non-compliance was due to non-willful conduct and that you meet a non-residency test.

Non-willful conduct requires you to certify on IRS Form 14653. Non-willful conduct is conduct that is due to negligence, inadvertence, or mistake or conduct that is the result of a good faith misunderstanding of the requirements of the law.

The non-residency requirement is generally met if in any one of the 3 past due years, you Read More

Written by | Posted in Canada • FBAR • OVDP

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

Written by | Posted in FBAR • Individual • IRS • OVDP

What Questions Your Tax Preparer Should Ask You About Your Undisclosed Foreign Bank Accounts

CPA’s and other professional tax return preparers are bound to the IRS Code Of Professional Responsibility commonly called Circular 230 which if a tax preparer violates could lead to big penalties and sanctions for that tax preparer.

What penalties could tax preparers face?

A tax preparer who is in violation of these rules could be subject to the following:

Internal Revenue Code § 6694(a) provides that if any part of an understatement of a taxpayer’s liability is due to an “unrealistic position” taken on his return, any income tax return preparer who knew (or reasonably should have known) of this position is subject to a penalty of $250. If the understatement is due to a reckless or intentional disregard of Read More

Written by | Posted in FBAR • IRS • OVDP

What Offshore Delinquent U.S. Individual Filers Need To Know! – Part 2

Does giving up U.S. citizenship or my green card get me out of my U.S. filing obligations?

Answer

Absolutely not.

Those who wish to wish to explore expatriation by giving up U.S. citizenship or their green card will have to timely file IRS Form 8854 and compute if applicable, an exit type tax if they are considered a “Covered Expatriate” (“CE”) under Section 877A of the IRS Code.

The exit tax is composed of a market to market tax on certain unrealized gains in excess of $668,000 (2013) and a 30% tax on future receipt of certain deferred items. The market to market tax may be deferred if you meet certain conditions. Read More

Written by | Posted in Canada • FBAR • OVDP

What Offshore Delinquent U.S. Individual Filers Need To Know! – Part 1

I am a U.S. citizen and have resided in Canada for years and have not filed U.S. Returns. What can I do or what could happen if I do nothing?

Answer

U.S. persons including U.S. citizens or green card holders residing in Canada who are not up to date with their U.S. filing obligations should consider the available programs in an effort to become tax-compliant.

The updated streamlined procedures announced on June 18, 2014 modified changes to the 2012 streamlined program, now known as the Streamlined Foreign Offshore Program (“SFOP”) requiring the filing of 3 years of past-due returns (with required disclosures and Read More

Written by | Posted in Canada • FBAR • OVDP
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