Thursday, September 29, 2016

Europe Begins Inquiry into 'Panama Papers' & 'Bahamian Papers' - How Long Before You Are Discovered?

We previously posted:

  1. Your Offshore Confidential Information Is Being Delivered Daily to Tax Authorities - New Leak of Bahamian Offshore Files! and
  2. Mossack Fonseca Affected Taxpayers with Potential Exposure Should Consult with Counsel To Consider Their Legal Options Now!
Now the European Parliament's Committee of Inquiry into Money Laundering, Tax Avoidance, and Tax Evasion has begun its hearings on the 'Panama Papers' affair, in which large numbers of client documents were stolen from the Panama law firm Mossack Fonseca and leaked to the International Consortium of Investigative Journalists and the press.

The inquiry committee will also examine the more recent leak of company registry entries from the Bahamas, including the alleged fact that former European Competition Commissioner Neelie Kroes failed to declare her former directorship of a Bahamian company.
Have Unreported Foreign Income?
Want to Know If the OVDP Program is Right for You?
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Wednesday, September 28, 2016

QTIP Election Can Be Ignored Where It Was Not Necessary to Reduce the Estate Tax to Zero

Revenue Procedure 2016-49 provides procedures to disregard and treat as null and void for transfer tax purposes a qualified terminable interest property (QTIP) election in situations where the QTIP election was not necessary to reduce the estate tax liability to zero. 

This guidance provides that such procedures are unavailable where QTIP elections are made in estates in which the executor elected portability of the deceased spousal unused exclusion (DSUE) amount under § 2010(c)(5)(A).  This guidance modifies and supersedes Rev. Proc. 2001-38, 2001-1 C.B. 1335. 

Advantageous 2017 Application Filing Deadline Extended: Complete and accurate certification applications filed before October 1, 2016 will have an effective date of certification of January 1, 2017, even if the date of the CPEO’s notice of certification is after January 1, 2017. The prior guidance had a September 1, 2016 deadline for this special transition rule.

CPA Working Capital Statements Can Be Provided in a Note: Treasury and IRS anticipate revising the requirements of the temporary regulations and Revenue Procedure 2016-33 to allow the audited financial statements covered by the CPA opinion to include a note to the financial statements that states that the financial statements reflect positive working capital. The note must still provide in detail a calculation of the working capital. In the case of a CPEO applicant that is a member of a controlled group of which other members are CPEO applicants or CPEOs, the note to the financial statements of the combined or consolidated annual audited financial statements for the controlled group must state that the individual financial statements of each CPEO applicant or CPEO that is a member of the controlled group reflect positive working capital (as defined by GAAP).

CPA Statements Re: Accrual Accounting Eliminated: Because GAAP requires the use of an accrual method of accounting and the required CPA opinion must state that a CPEO applicant’s or CPEO’s audited annual financial statements are presented fairly in accordance with GAAP, the separate requirement for a CPA opinion stating that such financial statements “reflect that the CPEO . . . computes its taxable income using an accrual method of accounting” is unnecessary. Treasury and IRS anticipate revising the Revenue Procedure 2016-33 to eliminate the requirement of a CPA statement re: accrual accounting.

Working Capital Transition Rule for Years Ending Before September 30, 2016: For fiscal years ending before September 30, 2016, a special transition rule is provided allowing the CPEO applicant to submit a separate statement, signed under penalties of perjury by a responsible individual of the CPEO applicant, that the financial statements reflect positive working capital for the fiscal year. That responsible individual statement could be provided in lieu of the CPA opinion or Note to the Financial Statement, described above. However, the statement by the responsible individual must also provide in detail a calculation of the CPEO applicant’s working capital. In the case of a CPEO applicant that is a member of a controlled group of which other members are also CPEO applicants or CPEOs, the CPEO applicant must submit its own separate statement by a responsible individual re: positive working capital, again setting forth in detail a calculation of the individual CPEO applicant’s working capital.

CPA Declaration Re: Authorization to Represent the CPEO Eliminated: The requirements in the proposed regulation and Revenue Procedure 2016-33 that the CPA file a written declaration with the IRS that he or she is authorized to represent the CPEO applicant or CPEO before the IRS will be eliminated.

Disregarded Entities May Apply for Certification: Treasury and the IRS anticipate that the final regulations under section 7705 will not prohibit a business entity that is disregarded as separate from its owner from becoming a CPEO. In addition, Treasury and the IRS anticipate revising the definition of Responsible Individual, to also include: (1) in the case of a disregarded entity owned by a corporation or partnership, the Responsible Individuals of that corporation or partnership (as defined by the regulations); and (2) in the case of a disregarded entity owned by an individual, the individual owner. Treasury and the IRS also anticipate providing in the final regulations that CPEO applicants and CPEOs that, but for their status as disregarded entities would separately be members of a controlled group, are treated as members of a controlled group.

Sole Proprietorships Can Apply for Certification: Treasury and IRS anticipate that the final regulations will expressly allow sole proprietorships to apply for certification as a CPEO.

Taxpayers Can Rely on Notice 2016-49: Treasury/IRS expressly confirm that the statements in Notice 2016-49 that the final regulations and future updated revenue procedures, when issued, will address the issues identified in Notice 2016-49 in the manner indicated in that Notice (as described above). Pending the issuance of final regulations and the updated revenue procedure, taxpayers may rely on the guidance contained in this notice.

Revenue Procedure 2016-49 will be published in IRB 2016-42 on October 17, 2016.
Have a US Estate Tax Problem?

Estate Tax Problems Require
an Experienced Estate Tax Attorney

Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).
Robert S. Blumenfeld  - 
 Estate Tax Counsel
Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.
While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.




Tuesday, September 27, 2016

Pakistan Becomes the 104th Country to Signs OECD Convention on Mutual Administrative Assistance in Tax Matters

On August 29, 2016 we posted OECD Adds 5 More Countries To Its CbC Automatic Exchange Agreement where we discussed that n June 30, the Organization for Economic Co-operation and Development (OECD) announced that 5 new countries have signed the Multilateral Competent Authority Agreement for the automatic exchange tax information.First automatic exchanges of information will start in 2017-2018 on 2016 information.
On September 14, 2016 Senator Mohammad Ishaq Dar, Minister of Finance of Pakistan, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters thereby becoming the 104th jurisdiction to join the Convention.

First automatic exchanges of information will start in 2017-2018 on 2016 information.
    Have an International Tax Problem?  
    Contact the Tax Lawyers at
    Marini & Associates, P.A.
     for a FREE Tax Consultation Contact US at
    or Toll Free at 888-8TaxAid (888 882-9243).

IRS To Outsource Debt Collections

The Internal Revenue Service announced today that it plans to begin private collection of certain overdue federal tax debts next spring and has selected four contractors to implement the new program.

The new program, authorized under a federal law enacted by Cong
ress last December, enables these designated contractors to collect, on the government’s behalf, outstanding inactive tax receivables. As a condition of receiving a contract, these agencies must respect taxpayer rights including, among other things, abiding by the consumer protection provisions of the Fair Debt Collection Practices Act.

The IRS has selected the following contractors to carry out this program:
  1. CBE Group 1309 Technology Pkwy Cedar Falls, IA 50613
  2. Conserve 200 CrossKeys Office park Fairport, NY 14450
  3. Performant 333 N Canyons Pkwy Livermore, CA 94551
  4. Pioneer 325 Daniel Zenker Dr Horseheads, NY 14845
These private collection agencies will work on accounts where taxpayers owe money, but the IRS is no longer actively working their accounts. Several factors contribute to the IRS assigning these accounts to private collection agencies, including older, overdue tax accounts or lack of resources preventing the IRS from working the cases.

The IRS will give each taxpayer and their representative written notice that their account is being transferred to a private collection agency. The agency will then send a second, separate letter to the taxpayer and their representative confirming this transfer.

Private collection agencies will be able to identify themselves as contractors of the IRS collecting taxes. Employees of these collection agencies must follow the provisions of the Fair Debt Collection Practices Act and must be courteous and respect taxpayer rights.

The IRS will do everything it can to help taxpayers avoid confusion and understand their rights and tax responsibilities, particularly in light of continual phone scams where callers impersonate IRS agents and request immediate payment.

Private collection agencies will not ask for payment on a prepaid debit card. Taxpayers will be informed about electronic payment options for taxpayers on Your Tax Bill. Payment by check should be payable to the U.S. Treasury and sent directly to IRS, not the private collection agency. 

For more information visit the Private Debt Collection page on

Have a Tax Problem?
Let Us Help!
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Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).


Monday, September 26, 2016

Time to Compare Candidate's Tax Plans Again!

On July 19, 2016 we posted Time to Compare Candidate's Tax Plans!  where we discussed both the Clinton Tax Plan and the Trump Tax Plan. Now with the first debate on the horizon, we thought it would be a good time to revisit their tax positions.
        Clinton Tax Plan

Hillary Clinton proposes raising taxes
on high-income taxpayers, modifying
taxation of multinational corporations, repealing fossil fuel tax incentives, and increasing estate and gift taxes.

  • Her proposals would increase revenue by $1.1 trillion over the next decade.
  • Nearly all of the tax increases would fall on the top 1 percent; the bottom 95 percent of taxpayers would see little or no change in their taxes.
  • Marginal tax rates would increase, reducing incentives to work, save, and invest, and the tax code would become more complex.
  • The analysis does not address a forthcoming proposal to cut taxes for low- and middle-income families.

His plan would significantly reduce marginal tax rates on individuals and businesses, increase standard deduction amounts to nearly four times current levels, and curtail many tax expenditures.  
  • His proposal would cut taxes at all income levels, although the largest benefits, in dollar and percentage terms, would go to the highest-income households. 
  • The plan would reduce federal revenues by $9.5 trillion over its first decade before accounting for added interest costs or considering macroeconomic feedback effects.
  • The plan would improve incentives to work, save, and invest.
  • However, unless it is accompanied by very large spending cuts, it could increase the national debt by nearly 80 percent of gross domestic product by 2036, offsetting some or all of the incentive effects of the tax cuts.

Candidates Differ on Taxing Corporations

The corporate income tax is a major revenue source for the U.S. government, but it has been shrinking for decades, and the three main presidential candidates could not differ more dramatically on what to do about it.

Trump Plan

Donald Trump, the Republicans' nominee for the Nov. 8 election, wants to cut the corporate tax rate from 35% to 15%.

While the Tax Policy Center, a Washington D.C. based tax research group, has said that under Trump's plan, corporate income tax revenues would fall $1.9 trillion from 2016 to 2026, Trump, a real estate developer, described his proposals as revenue neutral, saying that reduced tax rates would be paid for by eliminating some tax breaks and repatriating corporate cash held overseas.

Steven Rosenthal, a Tax Policy Center senior fellow, said Trump's plan is a standard business focused approach, but notes that it was difficult to fully evaluate because the drafting was incomplete.

Clinton Plan
Hillary Clinton,  has not promised a corporate tax cut. Like Trump, she has called for closing loopholes that corporations use to avoid taxes.

But unlike Trump, her plan would raise corporate tax revenues by $136 billion over 10 years, the Tax Policy Center said.
This fact sheet has been updated to reflect additional Clinton proposals to make sure the wealthiest pay their fair share.Clinton stood side-by-side with Warren Buffett and spoke about the importance of tax fairness.
Now, she is offering a plan to build on the “Buffett Rule,” crack down on tax gaming and sheltering, and ensure that the super-wealthy pay their fair share by:
  1. Implementing a multi-millionaire “Fair Share Surcharge.” Hillary will call for imposing a 4 percent “Fair Share Surcharge” on the 2 out of every 10,000 taxpayers making more than $5 million per year – who are the most likely to benefit from tax planning. This surcharge is a direct way to ensure that effective rates rise for taxpayers who are avoiding paying their fair share, and that the richest Americans pay an effective rate higher than middle-class families.
  2. Shutting down the “private tax system” for the most fortunate, starting by immediately closing egregious loopholesHillary will call for strengthening the Buffett Rule by broadening the base of income subject to the rule. This means immediately closing egregious loopholes, like the Bermuda reinsurance loophole and the “Romney loophole” that let the most fortunate avoid paying their fair share. That also means closing the “step up in basis” loophole, which lets the highest-income Americans escape paying their fair share on assets passed to heirs.
  3. Restoring fair taxation on multi-million dollar estatesHillary is proposing to restore the Estate Tax to 2009 parameters, which would ensure some of the largest, multi-million dollar estates are not exempt from paying their fair share. And she would go beyond that for estates valued in the tens or hundreds of millions of dollars. She will also close complex loopholes, including methods that people can now use to make their estates appear to be worth less than they really are. The Estate Tax is a tax on the very largest estates that would only affect 4 out of every 1,000 estates after Clinton’s reforms. 
  4. Ensuring millionaires can no longer pay a lower rate than their secretary. Hillary will reiterate her call for the “Buffett Rule,” which ensures that those making more than $1 million per year pay at least an effective tax rate of 30 percent.
 Have a Tax Problem?
Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at 
or Toll Free at 888-8TaxAid (888 882-9243).


Friday, September 23, 2016

Your Offshore Confidential Information Is Being Delivered Daily to Tax Authorities - New Leak of Bahamian Offshore Files!

Once again the International Consortium of Investigative Journalists (ICIJ), the same group that released the now infamous “Panama Papers,” has now released a cache of leaked documents provides names of politicians and others linked to more than 175,000 Bahamian companies registered between 1990 and 2016!

For years, Neelie Kroes traveled Europe as one of the continent’s senior officials, warning big corporations that they couldn’t “run away” from the European Union’s rules. The Dutch politician sympathized with average citizens who worried they’d been left to pay the bills “as infringers cream off the extra profits.”
What Kroes never told audiences and didn’t tell European Commission officials in mandatory disclosures was that she had been listed as a director of an offshore company in the Bahamas, the Caribbean tax haven whose secrecy and tax structures have attracted multinational companies and criminals alike. Kroes was listed as director of a Bahamian company from 2000 to 2009, according to documents reviewed by the International Consortium of Investigative Journalists.  

Details of Kroes’ link to the offshore company are among the numerous revelations found in a new leak of documents, received by the German newspaper Süddeutsche Zeitung and shared with ICIJ, that disclose details behind companies incorporated in the Bahamas. The cache of 1.3 million files from the island nation’s corporate registry provides names of directors and some owners of more than 175,000 Bahamian companies, trusts and foundations registered between 1990 and early 2016. 
Today ICIJ, Süddeutsche Zeitung and other media partners are making this information available to the public. This creates, for the first time, a free, online and publicly-searchable database of offshore companies set up in the Bahamas.

This information has been combined with data from the Panama Papers and other leaked offshore documents to add additional heft to one of the largest public databases of offshore entities in history.
The new leaked documents include the names of 539 registered agents, corporate middlemen who serve as intermediaries between Bahamian authorities and customers who wish to create an offshore company. Among them is Mossack Fonseca, the law firm whose leaked files formed the basis of the Panama Papers. The firm set up 15,915 entities in the Bahamas, making it Mossack Fonseca’s third busiest jurisdiction. At one point, Bahamian companies were among Mossack Fonseca’s best-sellers.

Beyond Mossack Fonseca and the Panama Papers, the leaked Bahamian files reveal details of the offshore activities of prime ministers, cabinet ministers, princes and convicted felons. It is generally not illegal to own or direct an offshore company, and there are legitimate business reasons in many cases for setting up an offshore structure. But transparency experts say it’s important that public officials disclose their connections to offshore entities.
The political and government figures named in the leaked documents include Colombia’s minister of mines and energy between 1999 and 2001, Carlos Caballero Argáez. He was listed as president and secretary of a Bahamian company, Pavc Properties Inc., between 1997 and 2008. Caballero Argáez also appeared as director of Norway Inc., a company registered in the Bahamas between 1990 and 2015.
All U.S. Taxpayers with
"Unreported Income" 
From Offshore Accounts
Need To Come Clean NOW before
Their Illegal Activity is Identified! 

 Want to Know which 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