Friday, May 29, 2015

4 More Swiss Banks Cave to IRS Pressure

According to Law360 the U.S. Department of Justice Thursday, in exchange for $2.2 million in payments, agreed not to press criminal charges on four (4) Swiss banks accused of hiding millions of dollars in U.S. taxpayer money from the Internal Revenue Service.

Societe Generale Private Banking SA, MediBank AG, LBBW AG and Scobag Privatbank AG agreed to cooperate with the Justice Department in its ongoing probe of tax evasion in the Swiss banking industry in return for the nonprosecution agreements.

“Today’s agreements reflect the Tax Division’s continued progress toward reaching appropriate resolutions with the banks that self-reported and voluntarily entered the Swiss Bank Program,” Caroline D. Ciraolo, acting assistant attorney general with the DOJ’s Tax Division, said in a statement.

The agreements represent at least the fourth instance of Swiss banks voluntarily self-reporting and paying penalties in order to avoid criminal charges. The DOJ’s Swiss bank program has netted $211 million from one of the nation’s largest banks, BSI SA, in March and $5.4 million from Finter Bank Zurich AG in May.

Societe Generale will pay the largest chunk of Thursday’s fines, shelling out $1.36 million after it admitted to hiding $140 million in U.S. taxpayer funds from the IRS. It did so by concealing the names of account holders and by withdrawing and holding cash in a safe deposit box while clients moved money around, according to the DOJ.

Two of the other banks that signed nonprosecution agreements on Thursday, MediBank and LBBW, copped to accepting funds from former UBS AG and Credit Suisse AG clients once those banks came under investigation by the IRS.

Do You Have Undeclared Income from One
of these Banks under Investigation by the IRS?

Want to Know if the OVDP Program is Right for You?

Contact the Tax Lawyers at
Marini & Associates, P.A.  
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243

OVDP Penalty Increased To 50% For 19 Foreign Banks

The new revisions to the US offshore voluntary disclosure initiative, which we posted on 6/18/14 "IRS Makes Changes to Offshore Programs; Revisions Ease Burden and Help More Taxpayers Come into Compliance", now provides for and increased 50% FBAR Penalties for 'Willful' Non-Disclosers.

This group includes those individuals who have offshore bank accounts with a foreign financial institution which has been publicly identified as being under investigation, or is cooperating with a government investigation. IRS has published a list of those foreign financial institutions or facilitators. 

The complete list is as follows:
  1. UBS AG
  2. Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.
  3. Wegelin & Co.
  4. Liechtensteinische Landesbank AG
  5. Zurcher Kantonalbank
  6. Swisspartners
  7. CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates
  8. Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.
  9. HSBC India
  10. The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield).
  11. Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14)
  12. Bank Leumi le-Israel B.M., The Bank Leumi le-Israel Trust Company Ltd, Bank Leumi (Luxembourg) S.A., Leumi Private Bank S.A., and Bank Leumi USA (effective 12/22/14)
  13. BSI SA (effective 3/30/15)
  14. Vadian Bank AG (effective 5/8/15)
  15. Finter Bank Zurich AG (effective 5/15/15)
  16. Societe Generale Private Banking (Lugano-Svizzera) SA (effective 5/28/15)
  17. MediBank AG (effective 5/28/15)
  18. LBBW (Schweiz) AG (effective 5/28/15)
  19. Scobag Privatbank AG (effective 5/28/15) 
A list of foreign financial institutions or facilitators meeting this criteria is available.

Of course, the IRS may add names to that list at any time, and whole groups of taxpayers will then be cut-off from OVDP without prior notice.

The same goes for taxpayers who worked with a "facilitator" who helped the taxpayer establish or maintain an offshore arrangement if the facilitator has been publicly identified as being under investigation or as cooperating with a government investigation. 

Taxpayers who had undeclared income from one of these 14 Banks are still be eligible to enter the OVDP, but they will be subject to a 50% offshore penalty, rather than the existing 27.5 percent penalty.

Of course if the IRS already has a particular taxpayer's name, then that person will not be eligible to enter the OVDP, and could be subject to multiple FBAR penalties.

Do You Have Undeclared Income from One
of the 19 Banks under Investigation by the IRS?

Want to Know if the OVDP Program is Right for You?

Contact the Tax Lawyers at
Marini & Associates, P.A.  
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243

Thursday, May 28, 2015

IDES Testing Session Opens June 1

IDES opens for testing from Monday, June 1, 2015 at 12:00 PM EDT to Monday, June 8, 2015 at 12:00 PM EDT (UTC/GMT-4).  The test session will be open to users that have completed IDES enrollment by Thursday, May 28, 2015 at 5:00 PM EDT.

Note:  Use test data only. The test files should not contain any production data or personally identifiable information, such as a valid taxpayer number, account number, or social security number.

Any production files submitted to the test environment will not be processed.  Do not submit production files to the test environment or test files to the production environment.

For more information on FATCA IDES go to our previous blog post Everything You Ever Wanted to Know about FATCA IDES, But Wish You Did Not Need to Ask!

Have A Tax Problem?


Contact the Tax Lawyers at 
Marini & Associates, P.A.

for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888 882-9243).


New BEA Filing Requirements - Once Every 5 Years for U.S. Persons With Foreign Affiliates

Pursuant to the requirements of the International Investment and Trade in Services Survey Act and related statutes, the U.S. Department of Commerce's Bureau of Economic Analysis (BEA) collects information on international trade in services, foreign direct investment in the United States, and outbound U.S. investment overseas.

BEA uses this information to compile a number of different economic and statistical reports that are, in turn, used for budgetary purposes and to help set U.S. economic and monetary policy. Information submitted to BEA is confidential and is to be used for such economic and statistical reporting purposes only.

The BEA recently imposed new filing requirements on U.S. persons with foreign affiliates by mandating Form BE-10 filings by certain U.S. persons once every five years. These forms were previously required only if a U.S. person was contacted directly by the BEA.

Under the new rules, any U.S. person who had direct or indirect ownership or control of 10 percent or more of the voting stock of an incorporated foreign business enterprise (or an equivalent interest in an unincorporated foreign business enterprise or partnership), including a branch, at any time during the U.S. person's 2014 fiscal year is subject to the reporting requirements. A U.S. person is defined to include individuals, trusts, estates, partnerships, corporations, or other organizations (including private funds) that are resident in or subject to U.S. jurisdiction.

This law, which was changed in 2014, is applicable to 'US trusts with offshore entities, even if the trust is not a US trust for tax purposes. Under this legislation, trusts, corporations and partnerships or LLCs, will have to abide by these rules regardless of their US tax classification.
Generally, U.S. persons are required to file Form BE-10 by May 29, 2015 if fewer than 50 responses (i.e., typically one response per foreign affiliate) are required. U.S. persons may apply for an extension of time to file until June 30, 2015. Responses to Form BE-10 are due by June 30, 2015 for U.S. persons filing 50 or more such responses.

Form BE-10 can be filed by mail, fax or online.

Failure to file a Form BE-10 can result in civil penalties of $2,500 to $25,000. In addition, willful failure to file can result in a penalty of $10,000, and, in the case of an individual, possible imprisonment for not more than one year, or both.

Visit the BEA website for more information.

Have A Tax Problem?

Contact the Tax Lawyers at 
Marini & Associates, P.A.

for a FREE Tax Consultation
Toll Free at 888-8TaxAid - 888-882-9243.


Baker & McKenzie

Tuesday, May 26, 2015

Switzerland is Publishing the Names of Foreign Tax Evaders!

According to Forbes the Swiss government and hundreds of Swiss banks are publishing the names of foreign tax evaders.

Some observers are calling this the real and final end of Swiss bank privacy tradition, which mostly dates to the 1930s. Deutsche Welle has cited the Swiss media Sonntagszeitung for the news, saying that the Swiss government will list the names, birthdates and nationalities of alleged tax evaders in its federal newspaper.

The data will be publicly available on the Internet, which will allow the people on the list to protest the publication in court.

With around 120 prosecutions and tens of thousands of Americans stepping forward to pay taxes, penalties, and interest, the IRS has collected billions.

No Offshore Income, Account or Trust is Still Secret.

Tuesday, May 19, 2015

Everything You Wanted to Know About Installment Payment Plans, but Wished You Did Not Need to Ask

If you're financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. As long as you pay your tax debt in full, you can reduce or eliminate your payment of penalties or interest, and avoid the fee associated with setting up the agreement.

Before applying for any payment agreement, you must file all required tax returns.

You may be eligible to apply for a streamline payment agreement if:
  • Individuals must owe $50,000 or less in combined individual income tax, penalties and interest, and have filed all required returns.
  • Businesses must owe $25,000 or less in payroll taxes and have filed all required returns.

Even if you're ineligible for a Streamline payment agreement, you can still pay in installments

  • Complete and Form 9465, Installment Agreement Request and 
  • Form 433-F, Collection Information Statement; then contact us for a Free Consultation.

Small Businesses can apply for an in-Business Trust Fund Express installment agreement

    Understand your agreement & avoid default

    • Your future refunds will be applied to your tax debt until it is paid in full;
    • Pay at least your minimum monthly payment when it's due;
    • Include your name, address, SSN, daytime phone number, tax year and return type on your payment;
    • File all required tax returns on time & pay all taxes in-full and on time (contact us to change your existing agreement if you cannot);
    • Make all scheduled payments even if we apply your refund to your account balance; and
    • Ensure your statement is sent to the correct address, contact us if you move or complete and mail Form 8822, Change of Address.
    If you don't receive your statement, send your payment to the address listed in your agreement.
    There may be a reinstatement fee if your agreement goes into default. Penalties and interest continue to accrue until your balance is paid in full. If you are in danger of defaulting on your payment agreement for any reason, contact us immediately. We will generally can stop the IRS from taking enforced collection actions:
    • When an installment agreement is being considered;
    • While an agreement is in effect;
    • For 30 days after a request is rejected, or
    • During the period the IRS evaluates an appeal of a rejected or terminated agreement.

    Have A Tax Problem?


    Contact the Tax Lawyers at 
    Marini & Associates, P.A.

    for a FREE Tax Consultation
    Toll Free at 888-8TaxAid - 888-882-9243.

    Monday, May 18, 2015

    IRS Targets Offshore Service Providers!

    We previously posted DOJ / IRS Obtains Court Orders to Seek Offshore Account Data From 5 U.S. Banks!where we discussed that U.S. District Judge Kimba M. Wood of the Southern District of New York entered an order on Nov. 7, 2013, authorizing the IRS to issue summonses requiring:
    1. Bank of New York Mellon (Mellon) and
    2. Citibank NA (Citibank) to produce information about U.S. taxpayers who may be evading or have evaded federal taxes by holding interests in undisclosed accounts at Zurcher Kantonalbank and its affiliates (collectively, ZKB) in Switzerland.
    U.S. District Judge Richard M. Berman of the Southern District of New York entered an order Nov. 12, 2013authorizing the IRS to issue summonses requiring:
    1. Mellon, Citibank,
    2. JPMorgan Chase Bank NA (JPMorgan),
    3. HSBC Bank USA NA (HSBC), and
    4. Bank of America NA (Bank of America) to produce similar information in connection with undisclosed accounts at The Bank of N.T. Butterfield & Son Limited and its affiliates (collectively, Butterfield) in the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, Switzerland, and the United Kingdom.
    In these actions, the Court granted the IRS permission to serve what are known as "John Doe" summonses on Mellon, Citibank, JPMorgan, HSBC, and Bank of America

    The IRS uses John Doe summonses to obtain information about possible tax fraud by individuals whose identities are unknown. The John Doe summonses approved today direct these five banks to produce records identifying U.S. taxpayers with accounts at ZKB, Butterfield and their affiliates, including other foreign banks that used ZKB and Butterfield's U.S. correspondent accounts at Mellon, Citibank, JPMorgan, HSBC, and Bank of America to service U.S. clients.

    This includes the names of taxpayers who had an account with CIBC FirstCaribbean International Bank over an eight-year period ending Dec. 31 without disclosing it to the IRS. It is too soon to say how many U.S. citizens held undeclared accounts at FirstCaribbean or what penalties they may face, Justice Department spokeswoman Dena Iverson said Nov. 12, 2013. FirstCaribbean does not have any branches in the United States but it has what's known as a correspondent account with Wells Fargo that allowed U.S. citizens to do business with the bank.

    The U.S. obtained the order from a judge Nov. 12, 2013.after an IRS revenue agent reviewed information from 129 people who voluntarily came forward to disclose offshore accounts and decided further scrutiny of FirstCaribbean was warranted.

    “Our goal is to drive people into compliance,” said Carolyn Schenk, senior counsel with the IRS in Los Angeles. “We realize that we are not going to audit our way out of this problem.”
    The private banking focus will therefore continue. Ms. Schenk announced that “in the near future you are going to see John Doe summonses again with regard to correspondent accounts here in the U.S. of multiple offshore banks.” 

    By issuing these John Doe summonses, we continue our joint efforts with the IRS to identify and hold accountable those who try to evade their legal responsibility to pay taxes."

    The U.S. Internal Revenue Service is planning to broaden the use of subpoenas of documents in cases where the name of a taxpayer under investigation is not known.

    Brian Stiernagle, program manager of the IRS Offshore Compliance Initiative, speaking at the Offshore Alert conference in Miami reiterated that the IRS is now going to target service providers that help facilitate offshore tax evasion both in the U.S. and abroad.

    "International issues remain a major focus for the IRS, and we are continuing our efforts to fight tax evaders who use offshore accounts to skirt the law," said IRS Acting Commissioner Werfel. "These John Doe summonses for correspondent account records show our determination to pursue evaders using offshore accounts, even if the person hiding money overseas chooses a bank that has no offices on U.S. soil."

    The IRS has also identified a number of abusive offshore service providers and consultants in the U.S. who help facilitate tax evasion and the agency will issue further summonses against them. 

    “These consultants are setting up structures, they are acting as nominees, providing mail forwarding services, all types of things with the goal of helping U.S. persons hide their assets,” Ms. Schenk said.

    For a John Doe summons to be granted by a court, the IRS has to provide evidence that tax evasion by a class or group of unknown individuals may have occurred at a bank. In recent years, the information that forms a “reasonable basis” for suspecting tax evasion has come from two main sources: various offshore voluntary disclosure programs and whistleblowers.

    Federal tax law requires U.S. taxpayers to pay taxes on all income earned worldwide. U.S. taxpayers must also report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. Willful failure to report a foreign account can result in a fine of up to 50 percent of the amount in the account at the time of the violation.