QI Application Deadline is December 5th, 2014!

Those FI’s seeking to obtain QI status to be effective for the calendar year 2014 must submit their Form 14345 and Form SS-4 no later than the close of business December 5th, 2014.

All applications received after that date will be effective for calendar year 2015.

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).

Big Wahoo!!!

For all of our friends who are concerned that we here and Marini & Associates, PA are all work and no play, please be advised that we caught this large Wahoo during our recent trip to Bimini.

If you like fishing, don't be shy to join us on our next adventure!

Very truly yours,   

Marini & Associates, P.A.

By  Ronald A. Marini

     Ronald A. Marini, Esquire

Luxemburg Leaks’ causes ‘Tax storm’ of government, media response

Public officials across the globe reacted with swift condemnation and calls for reform following ICIJ’s investigation into secret tax deals between Luxembourg and hundreds of international corporations.

The New York Times said the revelations have sparked a “rising furor” in Europe. Reuters called the reaction a “tax storm.” Response has been especially intense in Brussels, where the European Commission has been seeking to eliminate tax havens within the European Union.

Reporting by ICIJ and its partners was based on a leak of 548 private tax rulings – also known as “comfort letters” – negotiated by accounting giant PricewaterhouseCoopers on behalf of more than 340 multinational corporations. The documents provided a road map into how corporations shave billions of dollars in taxes by routing profits through Luxembourg. 

At the center of the “Lux Leaks” controversy is Jean-Claude Juncker, new president of the European Commission. Juncker was Luxembourg’s prime minister at the time many of the country’s tax-avoidance rules were enacted.








To see more about the latest impacts and responses link to ICIJ.

Have Un-Reported Income From an Offshore Bank?

 

Value Your Freedom?

 

Taxpayers who wish to take advantage of the OVDP 

Must Act Quickly!  

Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax Consultation Contact US at

www.TaxAid.us or www.TaxLaw.ms

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

US Expatriation Continues to Increase At a Record Pace in 2014!

We previously posted US Expatriation Increase At a Record Pace in 2014!  where we discussed that the number of Americans renouncing U.S. citizenship stayed near an all-time high in the first half of the year before rules that make it harder to hide assets from tax authorities came into force (FATCA - Effective Date July 1, 2014). 

Each quarter the U.S. Treasury publishes the names of the Americans who officially expatriated during that period.

The number of Americans renouncing U.S. citizenship increased 39 percent in the three months through September after rules that make it harder to hide assets from tax authorities came into force.

People giving up their nationality at U.S. embassies increased to 777 in the third quarter, from 560 in the year-earlier period, according to Federal Register data published yesterday.

Tougher asset-disclosure rules that started July 1 under the Foreign Account Tax Compliance Act, or FATCA, prompted more of the estimated 6 million Americans living overseas to give up their passports. The appeal of U.S. citizenship for expatriates faded further as more than 100 Swiss banks began to turn over data on American clients to avoid prosecution for helping tax evaders.


The U.S., the only Organization for Economic Cooperation and Development nation that taxes citizens wherever they reside, stepped up the search for tax dodgers after UBS AG paid a $780 million penalty in 2009 and handed over data on about 4,700 accounts. Shunned by Swiss and German banks and with FATCA starting, more than 9,000 Americans living overseas gave up their passports over the past five years.

FATCA requires U.S. financial institutions to impose a 30 percent withholding tax on payments made to foreign banks that don’t agree to identify and provide information on U.S. account holders. It allows the U.S. to scoop up data from more than 77,000 institutions and 80 governments about its citizens’ overseas financial activities.

In establishing the 2010 FATCA law, Congress and President Barack Obama in effect threatened to cut off banks and other companies from easy access to the U.S. market if they didn’t pass along such information. It was projected to generate $8.7 billion over 10 years, according to the congressional Joint Committee on Taxation.

So far, 2,353 Americans have renounced their citizenship 

this year, close to the all-time high of 2,369 

in the first nine months of 2013.

If this current trend continues,  it would result in  3,154 people expatriating into 2014, which would be a 105%  increase over the 2,999 people who expatriated in 2013. The 2013 amount of 2,999 represented a 221% increase over the 932 total in 2012 and “shatters” the previous record of 1,781 set in 2011.

"Should I Stay or Should I Go"?

 

Need Advise on Expatriation ...

 

Contact the Tax Lawyers of
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)

Source:

US Treasury

Bloomberg

DoJ Indicts Another Swiss Banker on Heels of 2 Recent Acquittals.

On November 3, 2014, we posted Ex-UBS Exec & Ex-Mizrahi Banker Found Not Guilty In Tax Evasion Trials!where we discussed that jurors in federal court in Fort Lauderdale, Florida, found former UBS AG executive Raoul Weil not guilty of conspiracy to defraud the United States for his alleged role in helping nearly 20,000 U.S. clients hide $20 billion in assets from the Internal Revenue Service.

The decision came as a significant blow to federal prosecutors, who had focused their efforts on convicting Weil, formerly the third-ranked officer at the Swiss banking giant as the head of its wealth management and business banking division and the most senior individual they targeted.

This came on the heels of Friday's (October 31, 2014) acquittal of a retired senior vice president at Israeli-based Mizrahi Tefahot Bank Ltd. in Los Angeles federal court on charges he helped U.S. customers conceal their assets from the Internal Revenue Service. 

Shokrollah Baravarian, 82,was charged with conspiring to defraud the U.S. and helping Mizrahi clients prepare false tax returns. Prosecutors claimed Baravarian helped clients who opened accounts in Israel, didn’t declare them to the IRS and accessed money through loans from the Los Angeles branch.

These acquittals represent a substantial setback 

to the seven-year U.S. campaign to curtail offshore tax evasion. 

We then posed the question of whether these 2 recent losses in foreign banker/promoter cases may have a chilling effect on the DoJ's desire to obtain prison terms for bankers/promoters currently under investigation and could possibly cause the DoJ to also rethink prison terms for U.S. Taxpayers with undisclosed offshore accounts. 

Now we know the answer to this question, which is that these 2 losses have not caused the DoJ to change it desire to obtain prison terms for bankers/promoters.

According to Forbes, another high level Swiss banker has been charged with conspiring to evade U.S. taxes. The latest indictment is of Martin Dunki, formerly Senior VP at Swiss private bank Rahn & Bodmer. He lives in Switzerland and has not been arrested, but has been charged with one count of conspiracy to defraud the IRS. It carries a maximum sentence of five years in prison.

This is in accord with Robert Panoff's quote in our November 12, 2014 post The Weil Not Guilty Verdict - Road Map For Future Criminal Defense Strategies?  where he indicated that the pressure is still on foreign bankers who have assisted American taxpayers in hiding money through offshore shell companies and secret accounts.

"The acquittal of Raoul Weil is the loss of one battle in what has been an enduring, lengthy and highly successful war on U.S. tax evasion involving the use of foreign bank accounts and those who aid and abet their conduct." Panoff said.

______________________________

"Those who think that this result will cause 

the Justice Department and the IRS to retreat 

in their ongoing efforts Should Rethink Their Position."

______________________________

Today, almost no offshore account or trust is safe. Already many countries are implementing broad disclosure policies, even Russia and China.For Americans who fail to step forward, the IRS and Department of Justice warn of their vast resources. The IRS and Justice Department may not be scorching the earth, but they aren’t far off.



Offshore accounts and the income and penalties associated with them have accounted for billions of dollars flowing to the IRS over the last 5 years. And it isn’t over yet!!!

Have Un-Reported Income From an Offshore Bank?

 

Value Your Freedom?

 

 Taxpayers who wish to take advantage of the OVDP 

Must Act Quickly!  

Contact the Tax Lawyers at

Marini & Associates, P.A.

for a FREE Tax Consultation Contact US at

www.TaxAid.us or www.TaxLaw.ms

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

Israel Announces that it Will Adopt the OECD Procedure for the Automatic Exchange of Financial Account Information

On November 3, 2014 we posted, Panama Re-Examining the OECD's Automatic Exchange of Information! where we discussed that during the annual meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes that was held in Berlin on October 28 and 29, 2014, 51 jurisdictions signed the Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information, but that Panama is re-examining its options on whether it would comply.

Israel was not one of these 51 jurisdictions.


However on November 11, 2014 the Israeli Ministry of Finance published on the part of their website that is in English a press release (dated October 27, 2014) in which it announces that the Israeli Ministry of Finance has notified the Organization for Economic Co-operation and Development (OECD) that will adopt the procedure for the automatic exchange of financial account information for tax purposes by the end of 2018.

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).

Source:

International Tax Plaza

Death of the “Double Irish Dutch Sandwich”? Not so Fast.

We originally posted we originally posted Ireland's plan to close a "Double Irish" tax loophole could cost Apple and Google Billions of Dollars which discussed that following pressure from the United States and EU, the Dublin government said it planned to change a rule underpinning this system which allows a company to be registered in Ireland but not resident there for tax purposes.

In his budget, Ireland's Finance Minister Michael Noonan has also announced changes to the intellectual property tax regime in the hope of keeping Ireland an attractive destination for business.

Ireland's plan to close a "Double Irish" tax loophole could cost U.S. companies including Apple and Google billions of dollars. Analysts and tax advisers predict that corporations which need access to the EU's 500 million consumers will find it difficult to set up equally effective schemes in other member states.

From January 2015, all companies newly incorporated in Ireland will be classed as Irish tax-residents. Companies already benefiting from the scheme can continue to do so until 2020, when the preferential 'double Irish' tax system will cease to apply.

According to Jeffrey L. Rubinger, the proposal clearly demonstrates Ireland’s desire to comply with the G20-endorsed new international tax initiatives (such as the “Base Erosion and Profits Shifting” initiative). The question raised by the recent Irish finance proposals is, do they really put an end to the Double Irish structures (with or without the Dutch sandwich) or to the use of Ireland in general as an attractive jurisdiction for companies with IP that is used outside the U.S.? Upon a closer examination, the answer would seem to be NO!

The same benefits can be achieved by only slightly modifying the existing structures to avoid triggering the new proposed rules.

The Double Dutch structures were useful for a few reasons.

1. First, Ireland has a 12.5 percent corporate income tax rate for active “trading” income, is English speaking, and is highly educated. These facts are not likely to change any time soon and thus will remain valid going forward even if and when the proposals become final. 
2. Second, because Ireland uses a management and control standard for residency, it is possible to prevent Ireland from taxing income earned by the top-tier subsidiary by placing management in another country. 
3. Third, thanks to the U.S. check-the-box rules, Subpart F can be entirely avoided from the U.S. perspective by causing the lower-tier subsidiaries to be disregarded for U.S. tax purposes, since all of the non-U.S. activities are thus considered to be conducted by a single entity.

The only factor that has been altered by the Irish proposals is the second. Under the proposals, moving management and control of an Irish company to a Caribbean nation with which Ireland does not have a tax treaty will no longer achieve the desired objective.

But this does not mean the objective cannot still be achieved in other ways. Ireland has an extensive treaty network. At least two of these treaties contain management and control residency standards and are with countries that have similarly low tax rates.

Specifically, it is possible to form an INR, as under existing structures, with its management and control in Malta. Pursuant to the treaty between Malta and Ireland (which should not be overridden by the new proposal), that company should be treated as a resident of Malta, and not Ireland (See Article 4(3) of the treaty). 

Alternatively, the treaty between the United Arab Emirates (UAE) and Ireland likewise has a management and control standard, and the UAE does not impose corporate income tax. The Ireland-UAE treaty also exempts royalty payments from withholding tax.

Thus, notwithstanding the Irish proposal, it should still be possible to achieve the same results using a company managed and controlled in Malta or the UAE, rather than in a Caribbean nation. The practical wrinkle is that in order to satisfy the management and control standard, it generally will be necessary to hold board meetings, etc., in the relevant country, e.g. Malta. While many executives would no doubt prefer to travel to Bermuda or the Cayman Islands for such meetings, travel to Malta should not be so burdensome or undesirable as to eliminate this structure from consideration.

Another issue worth mentioning is the role of the same-country exception to certain categories of Subpart F income. This is one frequently cited reason for using two Irish companies (only one of which is considered to be Irish for Irish tax purposes), rather than simply forming one company in Malta from the start, for example, so that moving management and control is not necessary. 

As long as we have the U.S. check-the-box rules and can simply cause all lower-tier entities to be disregarded, the same country exception is not technically needed because the U.S. law sees only one foreign entity. However, it is possible that at some point in time these check-the-box rules could go away. If that were to occur, having both of the “Double Irish” companies (IrishCo1 And IrishCo2) incorporated in Ireland would provide a “belts and suspenders” fallback in that taxpayers could instead rely, from the U.S. perspective, on the same country exception to prevent Subpart F income from arising from these licensing arrangements between related parties.

In any case, all of the press declaring the Double Dutch a thing of the past seems to be a bit overstated. The only thing that has truly changed is the scope of permissible jurisdictions to which management and control may be moved to achieve the desired benefits. 

The number of such permissible jurisdictions 
certainly has been diminished...

But the viability of the structure going forward

has by no means been eliminated entirely!

_____________________________________________

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).