Ex-Deutsche Bank broker wins new trial in U.S. after juror misconduct

Ex-Deutsche Bank broker wins new trial in U.S. after juror misconduct

reut.rs•NEW YORK, June 8 (Reuters) - A former Deutsche Bank AG broker convicted in what prosecutors called the largest criminal tax fraud in history won a new trial on Monday after a U.S. appeals court concluded that a woman who lied to get on the jury had irreparably tainted the verdict.

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FBARs Must be Filed by June 30 through the BSA E-Filing System

For 2014, FBARs must be electronically filed by June 30 through the BSA E-Filing System using the electronic FinCEN Form 114, which supersedes the now-obsolete paper Treasury Department Form 90-22.1.

The IRS now has a new – FBAR Reference Guide on IRS.gov., this Guide is provided to educate and assist U.S. persons who have the obligation to file the FBAR; and for the tax professionals who prepare and electronically file FBAR reports on behalf of their clients. This Guide also supports IRS examiners in their efforts to consistently and fairly administer the FBAR examination and penalty programs.

Who Must File the FBAR?

 

A United States person must file an FBAR if that person has a financial interest in or signature authority over any financial account(s) outside of the United States and the aggregate maximum value of the account(s) exceeds $10,000 at any time during the calendar year.

Who is a United States Person?

A "United States person" means:

 

• A citizen or resident of the United States;
• An entity created or organized in the United States or under the laws of the United States. The term "entity" includes but is not limited to, a corporation, partnership, and limited liability company;
• A trust formed under the laws of the United States; or
• An estate formed under the laws of the United States.

Disregarded Entities: Entities that are United States persons and are disregarded for tax purposes may be required to file an FBAR. The federal tax treatment of an entity does not affect the entity’s requirement to file an FBAR. FBARs are required under a Bank Secrecy Act provision of Title 31 and not under any provisions of the Internal Revenue Code.

United States Resident: A United States resident is an alien residing in the United States. To determine if the filer is a resident of the United States, apply the residency tests in 26 U.S.C. § 7701(b). When applying the § 7701(b) residency tests use the following definition of United States: United States includes the States, the District of Columbia, all United States territories and possessions (e.g., American Samoa, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, Guam, and the United States Virgin Islands), and the Indian lands as defined in the Indian Gaming Regulatory Act.


Example: Matt is a citizen of Argentina. He has been physically present in the United States every day of the last three years. Because Matt is considered a resident by application of the rules under 26 U.S.C. § 7701(b), he is required to file an FBAR.

Example: Kyle is a permanent legal resident of the United States. Kyle is a citizen of the United Kingdom. Under a tax treaty, Kyle is a tax resident of the United Kingdom and elects to be taxed as a resident of the United Kingdom. Kyle is required to file an FBAR. Tax treaties with the United States do not affect FBAR filing obligations.

  

Financial Account  

 

Financial account includes the following types of accounts:

• Bank accounts such as savings accounts, checking accounts, and time deposits,
• Securities accounts such as brokerage accounts and securities derivatives or other financial instruments accounts,
• Commodity futures or options accounts,
• Insurance policies with a cash value (such as a whole life insurance policy),
• Mutual funds or similar pooled funds (i.e., a fund that is available to the general public with a regular net asset value determination and regular redemptions), 
• Any other accounts maintained in a foreign financial institution or with a person performing the services of a financial institution.

Example: A Canadian Registered Retirement Savings Plan (RRSP), Canadian Tax-Free Savings Account (TFSA), Mexican individual retirement accounts (Fondos para el Retiro) and Mexican Administradoras de Fondos para el Retiro (AFORE) are foreign financial accounts reportable on the FBAR.

Example: Foreign hedge funds and private equity funds are not reportable on the FBAR. The FBAR regulations issued by FinCEN on February 24, 2011 do no require the reporting of these funds at this time.

A financial account is foreign when it is located outside of the United States, which includes the following places:

o United States, including the District of Columbia;

o United States territories and possessions, such as:  

• Commonwealth Northern Mariana Islands
• District of Columbia
• American Samoa
• Guam
• Commonwealth of Puerto Rico
• United States Virgin Islands 
• Trust Territories of the Pacific Islands 
• Indian lands as defined in the Indian Gaming Regulatory Act.

Typically, a financial account that is maintained with a financial institution located outside of the United States is a foreign financial account.

Example: An account maintained with a branch of a United States bank that is physically located in Germany is a foreign financial account.

Example: An account maintained with a branch of a French bank that is physically located in Texas is not a foreign financial account.

Example: Ed, a United States citizen, purchased securities of a French company through a securities broker located in New York. Ed is not required to report these securities because he purchased the securities through a financial institution located in the United States. 

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  Your FBAR Report?

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3

June 15 Deadline Nears for Taxpayers Living Abroad!

US Taxpayers living abroad qualifying for an automatic two-month extension must file their 2014 federal income tax returns by Monday, June 15, 2015 according to the Internal Revenue Service.

The June 15 deadline applies to U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular April 15 due date.

To use the two-month extension, taxpayers must attach a statement to their tax return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for more information.

Taxpayers who cannot meet the June 15 deadline can get an automatic extension until Oct. 15, 2015. This is an extension of time to file, not an extension of time to pay. Interest, currently at the rate of three percent per year compounded daily, applies to any payment made after April 15, 2015. In some cases, a late payment penalty, usually 0.5 percent per month, applies to payments made after June 15, 2015.

Taxpayers abroad, regardless of income, can use Free File to request a tax-filing extension. Alternatively, eligible taxpayers can download and file Form 4868, available on IRS.gov.

In some cases, an additional extension beyond Oct. 15 may be available. Additional extension of time for taxpayers out of the country. In addition to the 6-month extension, taxpayers who are out of the country can request a discretionary 2-month additional extension of time to file their returns (to December 15 for calendar year taxpayers). To request this extension, you must send the Internal Revenue Service a letter explaining the reasons why you need the additional 2 months. 

Details are in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. In addition, members of the military and others serving in Afghanistan and other combat zone localities normally have until at least 180 days after they leave the combat zone to file their returns and pay any taxes due. For details, see Extension of Deadlines in Publication 3, Armed Forces Tax Guide.

Federal law requires U.S. Citizens and Resident Aliens to report any Worldwide Income, including income from foreign trusts and foreign bank and securities accounts on their federal income tax return.

Additionally, U.S. persons with foreign accounts whose aggregate value exceeded $10,000 at any time during 2014 must file electronically with the Treasury Department a Financial Crimes Enforcement Network (FinCEN) Form 114, Report of Foreign Bank and Financial Accounts (FBAR).

Form 114 replaces TD F 90-22.1, the FBAR form used in the past. It is due to the  Department by Tuesday, June 30, 2015 must be filed electronically, and is only available online through the Treasury BSA E-Filing System website. This June 30 due date cannot be extended and tax extensions do not extend the FBAR filing due date. For details on FBAR requirements, see Report of Foreign Bank and Financial Accounts (FBAR).

Need Help With:

The Expatriate Income Exclusion?

or FBAR Report?

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OVDP Penalty Increased To 50% For 21 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) 
20. Rothschild Bank AG (effective 6/3/15)
    
21. Banca Credinvest SA (effective 6/3/15)
    

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 21 Banks Delivering Names to the IRS?



Do You Value Your Freedom?

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

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Marini & Associates, P.A.  

 

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

2 More Swiss Banks Cave and Turn Over Names to the DOJ!

We have previously posted on Friday, May 29, 2015 "4 More Swiss Banks Cave to IRS Pressure" where we discussed that the U.S. Department of Justice, 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.

Now the Department of Justice announced on June 3, 2015 that two more Swiss Banks, 
Rothschild Bank AG and Banca Credinvest SA, have reached resolutions under the DoJ's Program.     

“The days of safely hiding behind shell corporations and numbered bank accounts 

are over,” 
said Acting Assistant Attorney General Caroline D. Ciraolo 
of the Department of Justice’s Tax Division.

“As each additional bank signs up under the Swiss Bank Program, More and More Information Is Flowing  to the IRS Agents and Justice Department Prosecutors going after  Illegally Concealed Offshore Accounts and the Financial Professionals who help U.S. Taxpayers Hide Assets Abroad.”

In accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. accountholders to come into compliance with their U.S. tax and disclosure obligations.  While U.S. accountholders at these banks who have not yet declared their accounts to the IRS may still be eligible to participate in the IRS Offshore Voluntary Disclosure Program, the price of such disclosure has increased.

Under the program, banks are required to:

• Make a complete disclosure of their cross-border activities;
• Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
• Cooperate in treaty requests for account information;
• Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed (a/k/a Levers List);
• Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
• Pay appropriate penalties.

Banks meeting all of the above requirements are eligible for a non-prosecution agreement.

“With each Additional Agreement, 
the world where criminals can hide their money 
is becoming smaller and smaller.  Those who circumvent offshore disclosure laws have little room to hide.”said Chief Richard Weber of IRS-Criminal Investigation.

Rothschild Bank AG (Rothschild) was founded in 1968 and is headquartered in Zurich, Switzerland.  Rothschild offered services that it knew could and did assist U.S. taxpayers in concealing assets and income from the Internal Revenue Service (IRS), including code-named accounts, numbered accounts and hold mail service, where Rothschild would hold all mail correspondence for a particular client at the bank.

For a number of years, including after Swiss bank UBS AG announced in 2008 that it was under criminal investigation, and following instructions from certain U.S. taxpayers, Rothschild serviced certain U.S. customers without disclosing their identities to the IRS.  Some of Rothschild’s U.S. clients had accounts that were nominally structured in the names of non-U.S. entities.  In some such cases, Rothschild knew that a U.S. client was the true beneficial owner of the account but nonetheless obtained a form or document that falsely declared that the beneficial owner was not a U.S. taxpayer.

Since Aug. 1, 2008, Rothschild had 332 U.S.-related accounts with an aggregate maximum balance of approximately $1.5 billion.  Of these 332 accounts, 191 accounts had U.S. beneficial owners and an aggregate maximum balance of approximately $836 million.  Rothschild will pay a penalty of $11.51 million.

Banca Credinvest SA (Credinvest), located in Lugano, Switzerland, started operations as a fully licensed bank in 2005.  Credinvest offered a variety of services that it knew could assist, and that did assist, U.S. clients in concealing assets and income from the IRS, including hold mail service and numbered accounts.  Credinvest did not set up any formalized internal reporting regarding U.S. clients and did not adopt any procedures to ascertain or monitor the compliance of its U.S. clients with their U.S. tax obligations.

In late 2008, an external asset manager referred 11 accounts to Credinvest, all of which were for U.S. clients who had left UBS.  The bank delegated to that external asset manager the primary management of those accounts and failed to ascertain the compliance of those clients with their U.S. tax obligations.  The bank thus aided and assisted those clients in concealing their accounts from U.S. authorities.  Since Aug. 1, 2008, Credinvest had 31 U.S.-related accounts with just over $24 million in assets.  Credinvest will pay a penalty of $3.022 million.

Do You Have Undeclared Income from One of these Banks

 Who Are Handing Over Names to 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

at: www.TaxAid.us or www.TaxLaw.ms or

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

IRS Issues New FBAR Penalty Guidance

The IRS released new guidance dated May 13, 2015 on how examiners should determine the amount of any penalty for the failure to file an FBAR (Report of Foreign Bank Account, FinCEN Form 114). 

SBSE-04-0515-0025 MEMORANDUM FOR ALL LB&I, SB/SE, AND TE/GE EMPLOYEES 

The above-mentioned link has been taken down by the IRS and the provisions of this guidance have been incorporated into the IRM 4.26.16.6.5.3  (11-06-2015), Penalty for Willful FBAR Violations which now provides that the willful penalty is generally limited to 50% of the balance in the account at the time of the violation.

While it does not appear to apply directly to cases in the Offshore Voluntary Disclosure Program (OVDP); it may impact clients' decisions as to whether or not to opt-out of OVDP, or whether or not to enter OVDP in the first place.

Under the guidance examiners are instructed to make a determination of willfulness for each year of the examination. If multiple years are involved, and the conduct is willful, the total penalty amount for all years under examination is generally limited to 50 percent of the highest aggregate balance of all unreported foreign financial accounts.

However, if the "facts and circumstances" justify it, an examiner may recommend a penalty of more or less than 50 percent, but in no circumstances will the penalty exceed 100% of the highest aggregate balance.

When asserting an FBAR penalty, the burden is on the IRS to show that an FBAR violation occurred and, for willful violations, that the violation was in fact willful. The FBAR penalty provision of Title 31 establishes only maximum penalty amounts, leaving the IRS to determine the appropriate FBAR penalty amount based on the facts and circumstances of each case.

• The procedures in Attachment 1 were developed to ensure consistency and effectiveness in the administration of FBAR penalties. They will help ensure FBAR penalty determinations are adequately supported and penalties are asserted in a fair and consistent manner. Examiners must continue to use their best judgment when proposing FBAR penalties. They must take into account all the available facts and circumstances of a case. See IRM 4.26.16.4.7, FBAR Penalties – Examiner Discretion, concerning the use of examiner discretion when proposing FBAR penalties. 
• Attachment 2 is a Civil FBAR Penalty Case File Checklist. Its use will help ensure consistency in FBAR penalty case file information.

This interim guidance will be incorporated into IRM 4.26.16, Report of Foreign Bank and Financial Accounts (FBAR), and IRM 4.26.17, Report of Foreign Bank and Financial Accounts (FBAR) Procedures, no later than one year following its issuance.

Examiners will continue to coordinate with Fraud Technical Advisors (FTA) if they have reason to believe a criminal referral may be appropriate.

If the examiner determines that the conduct was non-willful then in most cases the penalty will be limited to $10,000 for each year regardless of the number of unreported financial accounts. 

The guidance does provide that in some cases the "...facts and circumstances (considering the conduct of the person required to file, and the aggregate balance of the unreported foreign financial accounts) may indicate that asserting nonwillful penalties for each year is not warranted." Examiners may in those cases assert a single penalty not to exceed $10,000 for one year only. The starting point for all nonwillful calculations, however will be the "mitigation guidelines" set forth in IRM 4.26.16.4.6 et. seq.

The guidance also indicates that depending on the facts and circumstances, multiple $10,000 penalties for each year may be appropriate. In no event may the total penalties be greater than 50% of the highest aggregate balance for all years under examination. 

While all of this leaves a fair amount of discretion with the IRS examiner, it does suggest that there are "norms" for FBAR penalties. However, given that the actual amount of the penalties will be determined based upon "facts and circumstances"there remains a good deal of leeway for effective advocacy to keep the FBAR penalties as low as possible, and to keep them from reaching the maximum guideline amounts.

The guidance provides that it is the examiner who makes a recommendation as to amount, and type of FBAR penalty that is appropriate, and the group manager who makes the final determination, after consultation with an Operating Division FBAR Coordinator. The guidance makes clear that it is not the FBAR Coordinator who makes the decision. In addition, except in cases where the recommendation is to assert a willfulness penalty, IRS Counsel review is not required.

Do You Have Undeclared Income 

from Offshore Bank Accounts?

 

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

at: www.TaxAid.us or www.TaxLaw.ms or

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

Sources:

 IRS

Dennis Brager

The IRS Reminds Florida Taxpayers to Safeguard their Tax Records as the Beginning of Hurricane Season Approaches

IR-2015-83,June 1, 2015 – Hurricane season starts next week and the Internal Revenue Service advises individuals and businesses to safeguard their records against natural disasters by taking a few simple steps.

Create an Electronic Additional Set of Records

Taxpayers should keep a duplicate set of records including bank statements, tax returns, identifications and insurance policies in a safe place such as a waterproof container, and away from the original set.

Keeping an additional set of records is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original records are only provided on paper, these can be scanned into an electronic format. This way, taxpayers can save them to the cloud, download them to a storage device such as an external hard drive or USB flash drive, or burn them to a CD or DVD.

Document Valuables

Another step a taxpayer can take to prepare for a disaster is to photograph or videotape the contents of his or her home, especially items of higher value. The IRS has a disaster loss workbook,Publication 584, which can help taxpayers compile a room-by-room list of belongings.

A photographic record can help an individual prove the fair market value of items for insurance and casualty loss claims. Ideally, photos should be stored with a friend or family member who lives outside the area.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company ororganization changes functions, plans should be updated accordingly and employees should be informed of the changes. Make your plans ahead of time and practice them.

Check on Fiduciary Bonds

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

IRS Ready to Help

If disaster strikes, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

• Back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filingForm 4506, Request for Copy of Tax Return. 
• Alternatively, transcripts showing most line items on these returns can beorderedby calling 1-800-908-9946 or by usingForm 4506T-EZ, Short Form Request for Individual Tax Return Transcript  or Form 4506-T, Request for Transcript of Tax Return

Have A Tax Problem?

 

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.

for a FREE Tax Consultation

at: www.TaxAid.us or www.TaxLaw.ms or

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