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Tag Archive for Unreported Foreign Accounts

Tax Research Methodology

A Practical Guide to Perfecting Your Tax Research Techniques and Achieving Sustainable Tax Return Filing Positions

Introduction

In order to maximize your accounting firm’s overall efficiency, effectiveness, and productivity in connection to researching and resolving a tax issue and determining the sustainability of the tax return filing position, the appropriate tax research processes must be meticulously designed, implemented, and executed. The subsequent five comprehensive steps will guide you in establishing an all-inclusive tax research effort on behalf of your entire client base while properly ascertaining the likelihood of success Read more

Offshore Leasing Company In International Corporate Structure

TaxConnections Tax Blog - China and Southeast Asia Transfer Pricing Issues

An effective operational offshore company often used is the leasing company. Leasing has been utilized in the acquisition of assets and there is a split benefit gained through a leasing company. Tax benefits accrue in the way of substantial depreciation deductions reducing taxable income to one party, while the other party may also be entitled to amortization benefits. This is a cross-border effect of the virtues of depreciation. (1)

The leasing company in the United States context is governed by the Foreign Base Company Income category of Foreign Personal Holding Company Income. (See TaxConnections/TaxBlogoshere/September 20, 2013/Foreign Corporations and Subpart F Income-Part III). Foreign Personal Holding Company Income consisting of rental income Read more

Fiscal Transparency: They Really Mean It! IRS Helping Norway Catch Tax Evaders With Secret US Accounts

TaxConnections Picture - Norwegian Bank Notes &  FlagJohn Doe Summons

The Department of Justice just announced that various United States federal courts have entered orders authorizing the Internal Revenue Service to serve so-called “John Doe summonses” on eighteen US banks and financial institutions. The John Doe summonses are seeking information about persons who have used specific credit or debit cards in Norway. The cards were issued by various US banks and it is highly suspected that the Norwegian citizens who set up the US accounts to which they relate were not in compliance with Norwegian tax laws.

A “John Doe Summons” is a very powerful weapon against tax evasion. It generally directs a financial institution (e.g., here, a US bank, such as Prairie Sun Bank with offices in Minnesota, for example) to produce records identifying certain persons (here, all Norwegian persons) having current or closed accounts at the institution. The summons need not identify any individual by name – the general description (e.g., all Norwegian citizens) is enough! Indeed, the John Doe summons has helped IRS catch many US tax evaders who were using offshore accounts in Switzerland, India, and Lichtenstein etc.

Norway Finding Tax Evaders In The US With IRS’ Help

The DOJ announcement provides that the Norwegian authorities have reason to believe, based upon the use of payment cards in Norway that were issued by U.S. banks, that unidentified card holders may have failed to report financial account information or income on their Norwegian tax returns. Court papers cite examples where individuals Read more