Tuesday, February 28, 2017

How To Get The IRS To Accept Your Offer In Compromise?

Do you owe a substantial amount of taxes to the IRS? 
If so, you've likely looked into establishing a payment plan.

What if you are simply unable to pay your tax balance? 
In this case, you might consider requesting an offer in compromise, which is a last-resort option that allows you to settle your account for literally pennies on the dollar. The key to getting approved for an offer in compromise is understanding reasonable collection potential which the IRS uses to decide if your account qualifies for this option.

A Definition of Reasonable Collection Potential
A reasonable collection potential refers to the maximum amount that the IRS believes it can collect from you over time. Generally, the agency uses a simple formula to calculate this amount, which you can easily figure on your own. However, if you want your request for an offer in compromise to be approved, you should offer the IRS at least the same amount as your reasonable collection potential and preferably a little more. If the agency believes it can collect more from you than you are currently offering it has no reason to approve your request.

How to Calculate Your Reasonable Collection Potential
Reasonable collection potential includes two factors: the liquidation value of your assets and your extra monthly income over the next four or five years. To figure your assets' liquidation value, add up the total cash you have on hand and in bank accounts as well as the current value of any investments. You'll also have to include the current value of your real assets, including cars, homes and property. You can calculate this by multiplying the fair market value by 80 percent and then subtracting any outstanding loans against the value.

The final figure is your additional monthly income after your necessary living expenses are paid. Simply deduct your essential expenses from your income and then multiply the money that is left by either 12 or 24 to figure your disposable income.. Add up your total disposable income, your current cash and investments and the liquidation value of your assets to arrive at your reasonable collection potential.

If you've been considering requesting an offer in compromise from the IRS, you need to understand how to figure your reasonable collection potential. Calculating this number can help you decide how much to offer the IRS as a lump sum which increases the chances that your request will be granted.

Downside to Submitting an OIC
Completing the forms is just the beginning. The IRS will ask you for rafts of financial documentation: pay stubs, bank records, vehicle registrations, and myriad other items. This is an exhaustive, time-consuming process. Some taxpayers wind up submitting boxloads of documents to the IRS to support their OIC request.
Have Tax Problems?

 Want to Know if you Qualify for an Offer?
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).


New Zealand New Disclosure Requirements for Foreign Trusts

The Taxation (Business Tax, Exchange of Information, and Remedial Matters) Bill includes the necessary measures for New Zealand to implement the G20/OECD standard for the Automatic Exchange of Information in tax matters, which New Zealand financial institutions will have to comply with, and measures to further strengthen and update New Zealand's international tax rules with new disclosure requirements for foreign trusts.
The Tax Bill also includes the following reforms.
  • Amendments to the disclosure requirements for foreign trusts with New Zealand resident trustees.
    • These amendments are the result of the Government Inquiry into Foreign Trust Disclosure rules.
  • Automatic exchange of information: Legislation amendments to implement the G20/OECD standard for Automatic Exchange of Financial Account Information in Tax Matters in New Zealand
 The Bill has now passed through the NZ Parliament and awaits Royal Assent.

Need To Read Domicile Your NZ Trust? 
Contact the Tax Lawyers at
Marini & Associates, P.A.
for a FREE Tax Consultation
or Toll Free at 888-8TaxAid (888 882-9243).


Singapore Companies Forced to Register Controlling Entities

Singapore's government will enact legislation requiring companies and limited liability partnerships to maintain registers of controlling parties.

Companies will be given 60 days to set up their registers, and must send out notices to anyone whom they have reasonable grounds to believe are controllers, or who are likely to know the identity of controllers.


Need to Re-Domicile Your Singapore Entity?
Contact the Tax Lawyers at
Marini & Associates, P.A.
for a FREE Tax Consultation
or Toll Free at 888-8TaxAid (888 882-9243).


IRS Criminal Investigation Releases Fiscal Year 2016 Annual Report

IRS criminal investigations have decreased over the past few years in the wake of a steady staffing decline, with the 2016 fiscal year seeing fewer cases involving identity theft, money laundering and other financial crimes, according to an agency report released Feb. 27, 2017.

The Internal Revenue Service announced in its IRS Criminal Investigation (CI) annual report IR-2017-47, reflecting the significant accomplishments and criminal enforcement actions taken in fiscal year 2016.

The agency’s criminal investigation branch initiated a total of 3,395 cases in 2016, down from 3,853 investigations it handled during the previous year, the Internal Revenue Service’s report said.

Pointing to “a clear trend” of staffing decline affecting the agency’s core mission tax work, the report noted that between 2011 and 2016, staffing levels for special agents and professional staff dropped by about 19 and 22 percent, respectively.

“The IRS continues to work to ensure that everyone is playing by the same rules and paying their fair share,” said IRS Commissioner John Koskinen. “The IRS is committed to fairly administering and enforcing the tax code, and our criminal investigators play a critical role in that effort.” 

The CI report is released each year for the purpose of highlighting the agency’s successes while providing a historical snapshot of the make-up and priorities of the organization. 

“Though the total number of cases has dropped for the third consecutive year due to fewer agents and professional staff, we have continued to find ways to become even more efficient and the quality of our cases has never been greater.” 

CI is the only federal law enforcement agency with jurisdiction over federal tax crimes.
This year, CI again boasted a conviction rate rivaling
all of federal law enforcement at 92.1%.

That conviction rate speaks to the thoroughness of the investigations. CI is routinely called upon by prosecutors across the country to lead financial investigations on a wide variety of financial crimes including international tax evasion, identity theft, terrorist financing and transnational organized crime. 

CI investigates potential criminal violations of the Internal Revenue Code and related financial crimes in a manner to foster confidence in the tax system and compliance with the law. The 50-page report summarizes a wide variety of IRS CI activity throughout the fiscal year and includes case examples on a range of tax crimes, money laundering, public corruption, terrorist financing and narcotics trafficking financial crimes.

Annual Report: https://www.irs.gov/pub/foia/ig/ci/2016_annual_report_02092017.pdf

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

Monday, February 27, 2017

FinCEN Extends Tracking Secret Buyers of Luxury Real Estate in Manhattan & Miami

On Thursday, January 14, 2016  we posted U.S FinCEN Will Track Secret Buyers of Luxury Real Estate in Manhattan and Miami where we discussed that the Financial Crimes Enforcement Network (FinCEN) on January 13, 2016 issued a Geographic Targeting Orders (GTO) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay "all cash" for high-end residential real estate in the Borough of Manhattan in New York City, New York, and Miami-Dade County, Florida.

The initiative is part of a broader federal effort to increase the focus on money laundering in real estate. Treasury and federal law enforcement officials said they were putting greater resources into investigating luxury real estate sales that involve shell companies like limited liability companies, often known as L.L.C.s; partnerships; and other entities.

Now The US Treasury's Financial Crimes Enforcement Network (FinCEN) has renewed six so-called 'temporary geographic targeting orders' that require US title insurance companies to name the natural persons behind shell companies used to buy luxury residential property for cash in major metropolitan areas.
FinCEN says that 30 per cent of transactions covered by the orders – in New York City, Miami, Los Angeles, San Francisco, San Diego and San Antonio – involve a beneficial owner or purchaser representative that is also the subject of a previous suspicious activity report.

The GTOs renewed include the following major U.S. geographic areas:
  1. all boroughs of New York City;
  2. Miami-Dade County and the two counties immediately north (Broward and Palm Beach);
  3. Los Angeles County;
  4. three counties comprising part of the San Francisco area (San Francisco, San Mateo, and Santa Clara counties);
  5. San Diego County; and
  6. the county that includes San Antonio, Texas (Bexar County).

The monetary thresholds for each geographic area can be found in this table. A sample GTO, which becomes effective for 180 days beginning on February 24, 2017, is available here.

Need Experience Legal Advice for
Your US Real Estate Investments?

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

for a FREE Tax Consultation

Toll Free at 888-8TaxAid (888)882-9243.



Wednesday, February 22, 2017

Your FBAR Is Due in April This Year!

We previously posted Set up Your 2017 Calendar to Reflect New Filing Dates for 2016 US Tax Returns  where we discussed that on July 31, 2015, President Obama signed into law P.L. 114-41, the “Surface Transportation and Veterans Health Care Choice Improvement Act of 2015,” which includes a number of important tax provisions, including revised due dates for partnership, S corporations and C corporation returns and revised extended due dates for some returns.
Historically the Reports of Foreign Bank and Financial Accounts (FBAR) for foreign financial accounts was due on June 30 of each year, for purposes of reporting accounts for the preceding calendar year. FinCen reminds preparers and account holders that starting this year, the due date has been moved, starting for 2016 accounts, to April 15 (April 18 for 2017).
FinCEN Report Due Date Revised

The new law, for returns for tax years beginning after Dec. 31, 2015, the due date of FinCEN Report 114 will be Apr. 15, with a maximum extension of 6 months ending on Oct. 15. The IRS may also waive the penalty for failure to timely request an extension for filing the Report, for any taxpayer required to file FinCEN Form 114 for the first time.

The IRS or FinCEN need to provide clarification on the format or forms for such extensions, which may be similar to Form 4868, which is the form for requesting extensions on Individual tax returns currently. There may also be a requirement that these extensions be filed on the BSA Website as in the case of the FBAR forms.

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

BEPS Impact on Income Tax Treaties Delayed for Now

The OECD made its end-November 2016 deadline to release the text of the multilateral treaty to give effect to the BEPS Actions which involve changes to tax treaties, see here. The 49 page treaty text, which is commonly referred to as the multilateral instrument or MLI, and 85 page explanatory statement (ES) contain substantive changes to existing tax treaties in a relatively small subset of provisions.

The objective of the MLI is to have a single instrument which a country can sign to update its suite of treaties by a single stroke, without having to re-negotiate each treaty individually. So, if Australia (or any other country) signs the MLI, potentially all its existing treaties could be amended in one place.

Hence this one instrument has to be flexible enough to effect amendments to over 3,000 treaties based on different treaty models, some containing the amending provisions already (eg, an arbitration clause), of varying scope and age, some with protocols, in a variety of languages, and between countries that have different views on just how much and which parts of the BEPS agenda they want to implement. That drafting challenge explains a lot about why the instrument is so obtuse.

The changes which the MLI would make are hedged around with elections, options and the possibility of reservations, which is why the text of the MLI manages to be double the length of a typical tax treaty, while perhaps leaving readers wondering exactly what it all means. (Before grappling with the details of these complexities, it is helpful to read the summary in ES pages 3-7.)

Treasury released a Consultation Paper (CP) on 19 December 2016 setting out how it is proposed that Australia react to the menu of choices on offer in the MLI with submissions due by 13 January 2017. It will be interesting to see how many submissions were received given this timing.

The MLI is already open for signature from 31 December 2016 and will not start to operate until five ratifications have been deposited with the OECD. In Australia’s case ratification will require the usual treaty review process and for a bill to pass through Parliament giving effect to whatever we sign up to. The CP indicates a target start date for the MLI in Australia of 1 January 2019, assuming sufficient ratifications by then, which in the light of the timing indicated in the MLI for coming into force and effect means passage of enabling legislation by mid-2018.

In the meantime Australia has to draw up a list of treaties it wants to be amended, sort through the
It is unlikely there will be any signatures on the MLI before the proposed signing ceremony in Paris in the week of 5 June 2017 back-to-back with the OECD Ministerial Council meeting when a sufficient number of high-profile politicians will be on hand to do the honours. The MLI provides for provisional notification of all reservations etc by countries at the time of signature and final notification at the time of depositing instruments of ratification.

For more on how and when the MLI will operate, the current likely Australian position on it and the potential impact of the new US President Click Here To Read More...

Have a Tax Problem? 

Let US Help!
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 Committed to Stopping Offshore Tax Cheating; Remains on “Dirty Dozen” List of Tax Scams for 2017

The Internal Revenue Service today said avoiding taxes by hiding money or assets in unreported offshore accounts remains on its 2017 list of tax scams known as the “Dirty Dozen.”

Since the first Offshore Voluntary Disclosure Program (OVDP) opened in 2009, there have been more than 55,800 disclosures and the IRS has collected more than $9.9 billion from this initiative alone.

In addition, another 48,000 taxpayers have made use of separate streamlined procedures to correct prior non-willful omissions and meet their federal tax obligations, paying approximately $450 million in taxes, interest and penalties. The IRS conducted thousands of offshore-related civil audits that resulted in the payment of tens of millions of dollars in unpaid taxes. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitutions.

"Offshore Compliance Remains a Top IRS Priority."
"We've collected $10 billion in back taxes in recent years with 100,000 taxpayers making use of our voluntary disclosure programs," said IRS Commissioner John Koskinen. "

The IRS receives more foreign account information each year, making it harder to hide income offshore. I urge taxpayers with international tax issues to come forward and get right with the system."

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter anytime, but many of these schemes peak during filing season as people prepare their tax returns or hire people to help with their taxes.

Illegal scams can lead to significant penalties as well as interest and possible criminal prosecution. The IRS Criminal Investigation Division works closely with the Department of Justice to shut down scams and prosecute the criminals behind them.

Hiding Income Offshore

Over the years, numerous individuals have been identified as evading U.S. taxes by attempting to hide income in offshore banks, brokerage accounts or nominee entities. Then access the funds using debit cards, credit cards or wire transfers. Others have employed foreign trusts, employee-leasing schemes, private annuities or insurance plans for the same purpose.

The IRS uses information gained from its investigations to pursue taxpayers with undeclared accounts, as well as bankers and others suspected of helping clients hide their assets overseas.

While there are legitimate reasons for maintaining financial accounts abroad, there are reporting requirements that need to be fulfilled. U.S. taxpayers who maintain such accounts and who do not comply with reporting requirements are breaking the law and risk significant  fines, as well as the possibility of criminal prosecution.

Since 2009, tens of thousands of individuals have come forward to voluntarily disclose their foreign financial accounts, taking advantage of special opportunities to comply with the U.S. tax system and resolve their tax obligations. And, with new foreign account reporting requirements being phased in over the next few years, hiding income offshore is increasingly more difficult.

At the beginning of 2012, the IRS reopened the Offshore Voluntary Disclosure Program  following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs.
This program will be open for an indefinite period until otherwise announced.

Third-Party Reporting

Under the Foreign Account Tax Compliance Act (FATCA) and the network of intergovernmental automatic third-party account reporting has entered its second year. The IRS continues to receive more information regarding potential non-compliance by U.S. persons because of the Department of Justice’s Swiss Bank Program. This information makes it less likely that offshore financial accounts will go unnoticed by the IRS.
agreements between the U.S. and partner jurisdictions,

Potential civil penalties increase substantially if U.S. taxpayers associated with participating banks wait to apply to OVDP to resolve their tax obligations.

Have a Tax Problem? 



Let US Help!
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).