Even though described as “Simplification,” the Ways and Means proposal is 82+ pages long and will likely expand during the markup Even if passed in 2017, the vast majority of changes will not be effective until 2018.

While the tax rate brackets will be simplified from seven to four, higher income taxpayers will occasionally find them in a higher bracket under the proposal than they would under current law. For example, an individual taxpayer with $200,001 to $424,950 in 2018 will jump to a 35% rate vs. 33% under current law. Likewise, a married couple with $260,001 to $424,950 will jump to 35% vs. 33%. Read More

Joe Barbieri, Tax Connections

Gold and Bitcoin have been used synonymously as safe havens and currencies. What is a safe haven? It is a place to park wealth or money when there is a high degree of uncertainty in the environment. It has to be something that everyone can believe in even if the current institutions, governments or players in the business game are not available. The wealth has to be kept safe in times of trouble. What are the risks to someone’s wealth? There is theft by robbery if it is a physical asset. There is damage by fire, flood or other elements. There is the legal issue in not being able to determine if the asset is really yours or not. There is access risk in that you may own the asset but may not be able to get your hands on it. You may own the asset but may not be able to use it due to some restriction. Who else do you have to rely on to be able to use your wealth – spending it, investing it or converting it into different units of measure (currencies)? Read More

tax detectiveTaxpayer’s Defenses

It is in the context of summons and subpoenas that contestable issues occur promoting the need for the government in its supervisory role to utilize what is referred to as a Formal Document Request procedure and the use of treaty agreements. In understanding Formal Document Requests and treaty agreements, it is advantageous to first understand the glitches and defenses to the process available in the international context regarding summons and subpoenas.

There are two (2) basic taxpayer’s defenses asserted in resistance to summons and subpoenas. One such defense is that the taxpayer lacks the necessary control of the information sought to verify in satisfaction of the reporting requirements. The second basic defense is that to comply with the issued summons or subpoena would violate blocking statutes of a particular country. It is the success of the taxpayer with these basic defenses that create the necessity of the government to utilize Formal Document Requests and treaty agreements.

The crux of a taxpayer’s posture in its effort to avoid compliance with a summons or a subpoena is sometimes based on the lack of United States or other country’s jurisdiction, premised upon a lack of due process. The issue is raised as to the question of proper in personam jurisdiction in the service of summons and subpoenas on a foreign taxpayer. In determining a due process issue, the government is asserting judicial jurisdiction, in personam, based on due process of law. In this jurisdictional sense, due process arises when a statutory provision or constitutional authorization purports to provide a United States court a jurisdictional basis, and the assertion complies with due process notions. Read More

tax detectiveIntroduction

Recently there has been a flurry of activity with respect to International Financial Centers and their standing and obligations concerning the disclosure of their financial clients and records. This text will direct itself to the fundamentals of the tools that have traditionally been utilized to monitor, sensible regulation, reasonable supervisory monitoring, and appropriate national enforcement.

This will be presented in segments of regulation, the tools of enforcement of those regulations, and taxpayer defenses to enforcement. A main purpose is to establish an understanding of principles that will give a more meaningful understanding of the various unilateral agreements between the United States and various countries regarding business activities, including the use of anonymous banking facilities.

Basic Requirements Imposed Upon United States Taxpayers.

The apparatus of the United States government in implementing a supervisory role of international transactions emphasizes the functions of the Treasury Department and its collection agency, the Internal Revenue Service (hereinafter the Service). The functions can be divided into record keeping requirements imposed on taxpayers, examination authority of the Service in the monitoring phase of international activity, and enforcement used to compel compliance. Read More