Is the IRS Office of Professional Responsibility in Decline?

According to taxanalysts.com, in March of 2009, incoming American Bar Association Section of Taxation Chair Karen Hawkins was tasked with taking over the IRS Office of Professional Responsibility.

It had been a tough few years for OPR, which struggled with changing professional standards from congressional legislation and a heavy backlog of cases. Hawkins almost immediately revitalized the office and, in fact, led it to new heights with the backing of former IRS Commissioner Douglas Shulman.

However, after the government loss in Loving and a mounting number of other litigation setbacks to OPR's plans to more closely regulate return preparers, it's fair to ask whether the office’s golden age is now over.

Have A Tax Problem?

Contact the Tax Lawyers at 

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

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

73% of Swiss Banks Want Changes to Their the Terms of the Anti-Tax Evasion Agreement - Non-Prosecution Agreements!

The U.S. Department of Justice (“DOJ“) and the Swiss Federal Department of Finance have entered into an agreement that essentially ends Swiss bank secrecy and the renown of Switzerland as a tax haven (the “PFSB“).

The PFSB is monumental because it:

1. Applies not just to American taxpayers but also to foreigners and foreign entities who maintain Swiss bank accounts if they are U.S. tax obliged persons under FATCA;
2. Requires the disclosure of essentially every penny transferred in and out of closed Swiss bank accounts over the last five years by persons and entities who are caught by the PFSB, wherever situated. As a result, U.S. law enforcement will be able to follow the flow of funds to pursue tax evasion by learning from where, and to where, funds were transferred; and
3. Requires the disclosure of professionals affiliated with the bank accounts or who acted as intermediaries in respect of the accounts.

In the last few years, 4 lawyers, 5 asset managers, 1 trust advisor and 21 bankers have been indicted by the U.S. in connection with the use of Swiss bank accounts – the disclosure of this information means more indictments of advisors are forthcoming.

However, see our post entitled Ex-UBS Exec & Ex-Mizrahi Banker Found Not Guilty In Tax Evasion Trials!" where we discuss that jurors recently found former UBS AG executive Raoul Weil not guilty of conspiracy to defraud the United States and jurors acquitted 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.

The objective of the PFSB is to:

1. Flush out Tax Evaders (and secure the payment of unpaid taxes and penalties by them to the IRS);
2. Flush out their Advisors and prosecute them, including lawyers and asset managers, ect.
3. Bring about the end of the use of foreign banks in tax havens for tax evasion for all U.S. tax obliged persons and entities and
4. Secure the payment to the U.S. of billions of dollars in penalties from Swiss and other banks worldwide in settlement of non-prosecution.

By virtue of its reference to the U.S. Foreign Account Tax Compliance Act, 124 Stat. 97-117 (“FATCA“), the PFSB applies not just to American natural and legal persons but also to foreigners and foreign legal persons in the same circumstances in which FATCA applies (“U.S. Tax Obliged Persons"). Due to its breadth, FATCA impacts virtually all non-U.S. entities, directly or indirectly, receiving most types of U.S. source income, including gross proceeds from the sale or disposition of U.S. property which can produce interest or dividends.

The Swiss Bank must also agree to 

Provide Expert Testimony for 

U.S. Criminal Prosecutions 

that will arise from the disclosure of information provided to the U.S. under the Agreement for charges that may include tax evasion and money laundering.

The third stage, after entering into a NPA, the bank must provide additional information on the names and details of holders of closed U.S. Related Accounts. That disclosure includes the following:

• Dollar value of each U.S. Related Account;
• Name of U.S. Related Account holders and whether held by legal or natural persons;
• Beneficial interest information;
• Whether U.S. securities were held, and details in respect thereof;
• Names of lawyers, fiduciaries, asset managers, accountants, financial advisers, trustees, nominees, and anyone else affiliated with the U.S. Related Accounts;
• Details on the transfer of funds into and out of the U.S. Related Accounts on a monthly basis, including where such funds were deposited to and from and whether an intermediary was involved (such as lawyers, trustees and other third parties, and if so, their names); and
• Names of financial institutions involved in the transfers of funds, wherever situated worldwide.
  The information provided to the U.S. by Swiss banks must be certified by an independent lawyer (or accountant) to provide comfort to U.S. authorities that the information received by Swiss banks constitutes full disclosure.
  The PFSB does not apply to approximately 14 Swiss banks that are currently the subject of U.S. criminal investigation in respect of bank secrecy and tax evasion.

The Agreement is called Program for Non-Prosectuion Agreement or Non-Target Letters for Swiss Banks.

Now according to Forbes, 73 of the 100 Swiss Banks are having second thoughts and  want a better deal.Over 100 Swiss banks rushed before New Years’ Day 2014 to sign up for the U.S. Justice Department deal that would mean no prosecution. No conviction or closure, no disgrace, just some penalties and life goes on. But ten months later, over 70 of these banks are pushing back against the harsh deal, which includes a tough non-prosecution agreement.

Since 2009, the U.S. has had unprecedented success with ferreting out offshore accounts. UBS paid $780 million to the IRS and recently, Credit Suisse plead guilty and paid a $2.6 billion fine.

From its position of dominance, the Justice Department seeks ‘total cooperation’. American names, details, and more. The consequences of the Swiss not complying?

Prosecution. The fact that 14 Swiss banks under investigation were ineligible for the deal, including Julius Baer, and Pictet & Cie, may have helped entice 100 others. But the terms of the non-prosecution agreement were not available until now, 10 months after 100 banks signed on.The U.S. settlement deal broke Swiss banks into several categories, with more serious penalties for the worst offenders.

Lawyers representing 73 of the banks have sent a letter to the USDoJ complaining that the latest version of the amnesty terms, circulated on 22 September, includes new demands that were not in the original agreement.

• Participating banks are now required to 'cooperate fully with any other domestic or foreign law enforcement agency in any investigation, and to 'share material with governments other than the US.
• It also insists that banks must disclose information about their parent companies.

The banks' letter of protest says these terms go beyond what they anticipated when signing up, and urges that they are withdrawn. The requirement to cooperate with foreign governments 'turns a programme specifically focused on US tax issues into a global cooperation agreement without any safeguards or guarantees of appropriate consideration of the banks' cooperation', according to the 11-page letter, which is signed by 18 law firms representing the banks.

They may get a modicum of relief, but the landscape of global transparency and disclosure isn’t likely to materially change. 

 

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) 

Need to Call Practitioners Hotline – Expect to Wait > 1HR!

According to IRS National Taxpayer Advocate Nina Olson, it will take practitioners an average of 52 minutes to get through to the IRS on its dedicated telephone line in 2015.

Speaking at the American Institute of CPAs National Tax Conference, Olson says it will also take the taxpaying public 34 minutes to get questions about Form 1040 answered.

She previously provided essentially the same statistics in a written statement for the hearing before US House of Representatives IRS oversight committee, on February 26, 2014 where she also said:

The IRS is failing badly at meeting taxpayer needs because it lacks resources.

• Last year, the IRS received some 109 million telephone calls on its customer service lines.
• The IRS could answer only 60.5 percent of calls seeking to reach a customer service representative (CSR) 
• Those taxpayers who got through had to wait an average of 17.6 minutes on hold.
• Initial statistics for fiscal year (FY) 2014 indicate service has declined even more, with taxpayers waiting an average of more than 20 minutes and tax practitioners kept on hold for more than half an hour.
• IRS funding reductions do not punish the IRS nearly as much as they punish the nearly 150 million individual taxpayers and more than 10 million business entity taxpayers who are trying to comply with the tax laws and not receiving the help they need.
• When the IRS receives 109 million telephone calls, there is no substitute for the funding to hire enough CSRs to answer them.
• If the IRS does not receive more funding, the IRS will be unable to assist millions of taxpayers seeking assistance from their government to comply with the tax laws.

Now with a Republican-controlled Senate and the tax-exempt debacle regarding the IRS and the Republican Party; you can expect the IRS' budget to diminish even further!

So if your professional and you don't want to wait nearly an hour or more for transcripts on Practitioner Priority Service; I suggest you review our blog post IRS Enhances Transcript Delivery System On-Line! to enable you to obtain transcripts within five days on line.

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).

Ex-UBS Exec & Ex-Mizrahi Banker Found Not Guilty In Tax Evasion Trials!

According to Law360, Miami (November 03, 2014, 5:04 PM ET) -- 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 comes 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.

According to Bloomberg this comes 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. 

Jurors deliberated four hours before clearing Shokrollah Baravarian, 82, of 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. 

 

Prosecutors have charged more than 70 taxpayers and three dozen offshore bankers, lawyers and advisers. More than 45,000 Americans avoided prosecution by voluntarily disclosing their offshore accounts to the IRS, paying $6.5 billion in taxes, penalties and interest. For a detailed list of successful federal prosecutions thus far, go to our post dated Friday, April 11, 2014 "Offshore Prosecutions Strikes Fear into US Taxpayers."

 

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. 

According to a Forbes article "DOJ Wants Prison For Undisclosed Offshore Accounts" the IRS and Justice Department want more prison time. They hoped to make an example of a decidedly fat cat, Beanie Babies creater Ty Warner. He is ranked #663 of Billionaires and #209 on the Forbes 400. Mr. Warner already plead guilty to criminal charges over a Swiss account and paid a whopping $53M for Offshore Tax Evasion.

But at his sentencing, he got probation, and that lack of Jail Time made prosecutors mad. The feds wanted at least a year behind bars. The 69-year-old entrepreneur’s lawyers argued successfully that he should get off with probation and community service because of his age and good works. Government appeals of sentences are not common.

The feds have lost few cases related to offshore accounts. The last thing they want is to look to be going easy on the ultra-wealthy. The U.S. has always taxed worldwide income, but it turns out more Americans had secret offshore accounts than ever could have been imagined. Government victories have been astounding. 

However, after these two back-to-back losses within days of each other and the resulting failure to convict both Raoul Weil and Shokrollah Baravarian; the IRS  may have to reconsider its policy.

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) 

Panama Re-Examining the OECD's Automatic Exchange of Information!

According to the My Panama Lawyer Blog, The Ministry of Foreign Relations of Panama, headed by Vice-President Isabel de Saint Malo posted this communique in its website:
 

“Panama is in the process of re-evaluating its strategy to meet state requirements for financial transparency and exchange of information at international level, without neglecting national interests.

The Organisation for Economic Co-operation and Development (OECD) has established itself a new international standard for automatic exchange of information . However, its scope, methodology, limitations and other basics have not been defined. In this sense, it is premature for Panama to commit itself until it is fully developed.

The automatic exchange of information (AEOI) creates major challenges that have to be evaluated in light of Panamanian law, the interests of the country and the protection of guarantees to users of our services platform.  

Panama is a country that attracts foreign investment for legitimate reasons and must provide assurance to the users of our service platform. The country itself is prepared to take further measures to strengthen institutions to effectively fight against money laundering and terrorist financing, making sure we prepare properly for the development of policies of this nature which does not generate immediate impoverishment in our country.”

The communique is issued 1 day after the new OECD/G20 standard on automatic exchange of information was endorsed by OECD and G20 countries "as well as major financial centers" invited to the  annual  meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin. A large number of United Nations members did not attend.   A status report on committed and not committed jurisdictions will be presented to G20 leaders during their annual summit in Brisbane, Australia on November 15-16.   

51 jurisdictions, many represented at Ministerial level, translated their commitments into action during a massive signing of a Multilateral Competent Authority Agreement (MCAA) that will activate automatic exchange of information, based on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.  

Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration (CTPA), tweeted that 89 countries committed themselves to AEOI,  However, absent from the OECD commitment report are :

1. Madeira
2. Kazakhstan
3. Ukraine
4. Nigeria 
5. Vietnam
6. Pakistan
7. Jordania
8.  Philippines
9. Taiwan
10. Thailand
11. Serbia
12. Bulgaria
13. Guatemala
14. Peru
15. Ecuador
16. Dominican Republic
17. Venezuela 
18. United States of America  

This is odd especially in specially in light of the fact that Panama just signed a FATCA agreement with the US to share information on 5-1-2014 (see our post 92 FATCA Information Sharing Agreements Start Today!)

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).

IRS Enhances Transcript Delivery System On-Line!

Accounting Today reports that the Internal Revenue Service currently allows qualified tax professionals, who have a Form 8821, Tax Information Authorization or form 2848, Power of Attorney, on file to now request a client’s account transcript using the Transcript Delivery System.

Get a record of your past tax returns, also referred to as transcripts. IRS transcripts are often used to validate income and tax filing status for mortgage applications, student and small business loan applications, and during tax preparation.

You can download and print your transcript immediately, or request the transcript be mailed to your address on record.

Get Transcript Online button

• View and print your transcript immediately.
• Choose among Tax Return, Tax Account, Record of Account, or Wage and Income transcripts or a Verification of Nonfiling Letter.

Get Transcript by Mail button

• Transcripts arrive in 5 to 10 calendar days.
• Choose from either a Tax Return or Tax Account.
• Transcript by Mail is available en Español.

Form 8821 must be on file with the IRS’s Centralized Authorization File, or CAF, system naming the individual, not the individual’s business, as the appointee for the client, the IRS noted. Transcripts can be requested through the Transcript Delivery System if either Form 8821 or Form 2848 is on file with the CAF.

As a reminder, the IRS pointed out in an email to tax professionals that users must meet the requirements of Circular 230 or be an Electronic Return Originator with five or more accepted returns in order to register and use the Transcript Delivery System, or TDS.

A tax professional must still call the Practitioner Priority Service for all other issues. The IRS said it is currently working on program changes that will eliminate the notice to a client when their tax professional requests a transcript on an account with an identity theft indicator.

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).

More Trouble for US Depositors in Israeli Banks!

US depositors in Israeli banks face additional risks of being discovered. On Friday, October 31, 2014, we posted Bank Leumi to Face $300 Million Settlement Option to Close an Investigation Regarding Their Aiding Americans to Evade Taxes where we discussed are previous posts:

• IRS Continues Cracks Down on Undeclared Israeli Bank Accounts! where we discussed our prior posts about US taxpayers with undeclared income from Israeli  Bank Accounts.

• More Tax Problems for U.S. Citizens with Foreign Bank Accounts in Israel and 
• IRS Targets Israeli Banks and Their US Client.

Now Israel has announced that it will be joining an international mechanism for the sharing of information on financial accounts, according to its Finance Ministry who made the announcement announced Monday on November 3, 2014. The cross-border exchange of information, which is due to be in place by the end of 2018, is expected to make it more difficult to evade paying taxes on financial assets. 
 

The announcement could have dramatic implications for 

overseas investors with undeclared assets in Israel.  

Once the new system is in place, the assets would be 

automatically disclosed to participating foreign tax authorities.  

It would also affect Israelis with undeclared financial holdings abroad, which the Israel Tax Authority could be informed of. The Common Reporting Standard, is expected to expand to a network of about 50 countries, the Finance Ministry noted. 

Implementation of the Common Reporting Standard will take time in Israel, because it requires amendments to current legislation. It will also not be retroactive. Between now and when it comes into effect, it is reasonable to assume that some holders of undeclared assets will come clean, while others will move their money to new tax havens.  

Have Unreported Income from an Israeli Bank?

Felling a Bit Faclept?

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:

HAARETZ