Dennis Brager discusses the issues and penalties surrounding undisclosed foreign bank accounts and assets. FBARs must be filed for foreign accounts over $10,000 and failure to do so can result in both criminal and civil penalties, including prison time and fines up to 50% of the highest account balance. The IRS now has access to data from FATCA, Swiss bank tax amnesties, whistleblowers, and foreign banks closing accounts of noncompliant U.S. clients. The offshore voluntary disclosure program allows taxpayers to avoid criminal prosecution but charges a penalty of 27.5% of undisclosed assets. Strict documentation is required for the disclosure.
Reporting Requirements for US Citizens with Foreign Assetsgppcpa
The presentation reviews the reporting requirements for US citizens with foreign assets and the remedies for non-compliance. You will view the appropriate tax forms needed for reporting, due dates and penalty amounts. Te difference between willful and non-willful will be explained.
Gray's Summary of the Foreign Corrupt Practices Act.
Gray International (Gray) is an international network of public accounting and consulting firms based in the U.S., Hong Kong, China and Europe. Gray was started over 10 years ago in the U.S. (via its predecessor) and took the form of Gray International in 2013 as the result of the networking of multiple independent practices and professionals.
Gray provides international accounting and compliance solutions in the U.S., Americas, Asia and Europe. Gray focuses on U.S. accounting, tax, and governmental compliance for multinational companies, investors, U.S. persons living overseas and foreign investors and companies investing in or moving to the U.S.
Gray also consults on compliance with U.S. laws for businesses and financial institutions overseas such as the Foreign Corrupt Practices Act (FCPA) and the Foreign Account Tax Compliance Act (FATCA), the IRS Offshore Voluntary Disclosure Program, and the Program for Non-Prosecution Agreements or Non-Target letters for Swiss Banks.
Grays principals, partners, and employees have served clients worldwide. Gray has offices in Geneva, Hong Kong, Seattle, Shanghai and plans to open an office in Singapore in late 2013.
Grays U.S. public accounting firm (Gray CPA, PC) is registered with the U.S. Public Company Accounting Oversight Board and is a member of the American Institute of Certified Public Accountants and the Center for Audit Quality.
For more information about us, please visit us at:
www.grayintl.com
The document discusses major changes made by the IRS in 2014 to the Offshore Voluntary Disclosure Program and streamlined filing procedures. It expanded eligibility for the streamlined procedures to include more U.S. taxpayers, eliminated certain tax thresholds and risk assessment processes. There are now two types of streamlined procedures - one for taxpayers living abroad and one for taxpayers living in the U.S. The streamlined foreign procedures eliminate penalties for back taxes and interest, while the domestic procedures charge a reduced penalty of 5% of undisclosed foreign assets. The document outlines various eligibility requirements and potential issues or "traps" to be aware of for each streamlined procedure.
This document provides an overview of the IRS Offshore Voluntary Disclosure Program (OVDP). It discusses how the program allows noncompliant taxpayers to become compliant by disclosing foreign accounts and assets. It notes that taxpayers must disclose all information truthfully to receive reduced penalties, including paying a miscellaneous penalty of 27.5% of the highest balance of undisclosed foreign accounts over an 8 year period. However, the penalty increases to 50% for accounts at banks being investigated or cooperating with authorities. The document provides examples and explanations of how penalties are calculated under OVDP.
Fcpa anti corruption due diligence - (pwc)Helen Cuts
The document discusses conducting anti-corruption due diligence when acquiring companies. It begins with an agenda that includes a primer on the Foreign Corrupt Practices Act (FCPA), trends in anti-corruption due diligence, the need for due diligence to avoid legal and business risks, scenarios of when due diligence has uncovered issues, and approaches to conducting due diligence. The document emphasizes the importance of anti-corruption due diligence when acquiring companies and describes regulatory expectations for implementing compliance programs at acquired entities. It provides examples of issues uncovered during due diligence and the consequences.
24 New York Basic Family Plan PresentationWilma Ariza
This document summarizes the services provided by Pre-Paid Legal Services, including legal consultation and representation for various personal and civil legal issues for a monthly fee. It outlines preventative legal services, motor vehicle legal services, trial defense services, IRS audit services, and a 25% discount on other legal work. Identity theft protection services are also available for an additional monthly fee through a partnership with Kroll, Inc. The business has over 30 years of experience and more than 400,000 members.
Fundraising from America - A Guide to State Registration (New look slides)Adam Davidson
New look slides!
Are you sure you know all about this often-misjudged requirement that is fast becoming one of the most common Noncompliance issues when Fundraising from America?
US states are increasingly requiring registration if you fundraise in their state. If you have an office, address, staff, bank account or other ‘permanent’ activities in a state you may also be required to register in that state to do business. Each state is different in what it considers fundraising – in some merely having a website is enough. We will highlight what this could mean for your 501(c)(3) organisation – what constitutes fundraising or operating a state, what registration is required and when you should do so and how much it will cost you either to register or in penalties if you fail to do so.
Reporting Requirements for US Citizens with Foreign Assetsgppcpa
The presentation reviews the reporting requirements for US citizens with foreign assets and the remedies for non-compliance. You will view the appropriate tax forms needed for reporting, due dates and penalty amounts. Te difference between willful and non-willful will be explained.
Gray's Summary of the Foreign Corrupt Practices Act.
Gray International (Gray) is an international network of public accounting and consulting firms based in the U.S., Hong Kong, China and Europe. Gray was started over 10 years ago in the U.S. (via its predecessor) and took the form of Gray International in 2013 as the result of the networking of multiple independent practices and professionals.
Gray provides international accounting and compliance solutions in the U.S., Americas, Asia and Europe. Gray focuses on U.S. accounting, tax, and governmental compliance for multinational companies, investors, U.S. persons living overseas and foreign investors and companies investing in or moving to the U.S.
Gray also consults on compliance with U.S. laws for businesses and financial institutions overseas such as the Foreign Corrupt Practices Act (FCPA) and the Foreign Account Tax Compliance Act (FATCA), the IRS Offshore Voluntary Disclosure Program, and the Program for Non-Prosecution Agreements or Non-Target letters for Swiss Banks.
Grays principals, partners, and employees have served clients worldwide. Gray has offices in Geneva, Hong Kong, Seattle, Shanghai and plans to open an office in Singapore in late 2013.
Grays U.S. public accounting firm (Gray CPA, PC) is registered with the U.S. Public Company Accounting Oversight Board and is a member of the American Institute of Certified Public Accountants and the Center for Audit Quality.
For more information about us, please visit us at:
www.grayintl.com
The document discusses major changes made by the IRS in 2014 to the Offshore Voluntary Disclosure Program and streamlined filing procedures. It expanded eligibility for the streamlined procedures to include more U.S. taxpayers, eliminated certain tax thresholds and risk assessment processes. There are now two types of streamlined procedures - one for taxpayers living abroad and one for taxpayers living in the U.S. The streamlined foreign procedures eliminate penalties for back taxes and interest, while the domestic procedures charge a reduced penalty of 5% of undisclosed foreign assets. The document outlines various eligibility requirements and potential issues or "traps" to be aware of for each streamlined procedure.
This document provides an overview of the IRS Offshore Voluntary Disclosure Program (OVDP). It discusses how the program allows noncompliant taxpayers to become compliant by disclosing foreign accounts and assets. It notes that taxpayers must disclose all information truthfully to receive reduced penalties, including paying a miscellaneous penalty of 27.5% of the highest balance of undisclosed foreign accounts over an 8 year period. However, the penalty increases to 50% for accounts at banks being investigated or cooperating with authorities. The document provides examples and explanations of how penalties are calculated under OVDP.
Fcpa anti corruption due diligence - (pwc)Helen Cuts
The document discusses conducting anti-corruption due diligence when acquiring companies. It begins with an agenda that includes a primer on the Foreign Corrupt Practices Act (FCPA), trends in anti-corruption due diligence, the need for due diligence to avoid legal and business risks, scenarios of when due diligence has uncovered issues, and approaches to conducting due diligence. The document emphasizes the importance of anti-corruption due diligence when acquiring companies and describes regulatory expectations for implementing compliance programs at acquired entities. It provides examples of issues uncovered during due diligence and the consequences.
24 New York Basic Family Plan PresentationWilma Ariza
This document summarizes the services provided by Pre-Paid Legal Services, including legal consultation and representation for various personal and civil legal issues for a monthly fee. It outlines preventative legal services, motor vehicle legal services, trial defense services, IRS audit services, and a 25% discount on other legal work. Identity theft protection services are also available for an additional monthly fee through a partnership with Kroll, Inc. The business has over 30 years of experience and more than 400,000 members.
Fundraising from America - A Guide to State Registration (New look slides)Adam Davidson
New look slides!
Are you sure you know all about this often-misjudged requirement that is fast becoming one of the most common Noncompliance issues when Fundraising from America?
US states are increasingly requiring registration if you fundraise in their state. If you have an office, address, staff, bank account or other ‘permanent’ activities in a state you may also be required to register in that state to do business. Each state is different in what it considers fundraising – in some merely having a website is enough. We will highlight what this could mean for your 501(c)(3) organisation – what constitutes fundraising or operating a state, what registration is required and when you should do so and how much it will cost you either to register or in penalties if you fail to do so.
Carr Maloney PC is a litigation firm providing legal services throughout the mid-Atlantic region. The firm helps businesses and individuals meet all of their legal needs by simplifying complex issues. The document discusses recent litigation and regulatory issues affecting for-profit higher education institutions, including increased potential for class action lawsuits against institutions due to new Department of Education regulations prohibiting mandatory arbitration clauses and internal grievance procedures. It also summarizes ongoing litigation seeking more transparency in the USCIS H-1B visa petition process.
The document discusses several tax-related topics:
1) Small partnerships may opt out of new audit rules but some experts say they should wait to see the final regulations before deciding.
2) Private and community foundations saw significantly lower investment returns in 2015, the second year of declines.
3) Rep. Goodlatte may introduce online sales tax legislation but its passage is unclear. The bill would require states to consider a vendor's location for sales tax but use the destination for tax rates.
The new law imposes a new tax rate structure with seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate was reduced from 39.6% to 37% and applies to taxable income above $500,000 for single taxpayers, and $600,000 for married couples filing jointly. The rates applicable to net capital gains and qualified dividends were not changed. The “kiddie tax” rules were simplified. The net unearned income of a child subject to the rules will be taxed at the capital gain and ordinary income rates that apply to trusts and estates. Thus, the child's tax is unaffected by the parent's tax situation or the unearned income of any siblings.
Why And Where To Set Up A Foreign Trust For Asset ProtectionEllington78Ellington
A foreign trust must satisfy certain reporting requirements to the IRS, including filing Form 3520-A annually. The key forms are Form 3520-A, Form 5471 if owning a foreign corporation over 10%, and Form 8938 for foreign financial assets over a threshold. Whether a trust is domestic or foreign determines special reporting, and penalties can be imposed for failing to meet reporting rules. Understanding how and when to report a foreign trust to the IRS is important to avoid issues.
The document summarizes the services provided by Pre-Paid Legal Services, Inc. It discusses:
- The company's history of over 30 years in business and being publicly traded since 1976.
- The legal plan covers the member, spouse, and dependents for services like phone consultations, contract reviews, will preparation, traffic ticket assistance, trial defense with increasing hours each year of membership, IRS audit assistance, and a 25% discount on other legal services.
- Sales have increased each year, reaching over $450 million in 2007. The document argues people are more likely to need legal assistance than hospitalization, and that Pre-Paid Legal services function similar to health insurance for legal costs.
The document summarizes the benefits and services provided by Pre-Paid Legal Services, including legal services to address everyday legal needs, identity theft protection services, credit monitoring and restoration assistance. It outlines coverage for legal consultations, document reviews, will preparation, traffic violations, identity theft issues and IRS audits. Additional services include trial defense hours, a 25% discount on other legal services, and 24/7 legal assistance through the Legal Shield program. Identity theft protection includes credit monitoring, identity theft restoration assistance through Kroll, and additional identity theft shield services for a small monthly fee added to the basic legal services plan.
This document provides information about a seminar on U.S. taxation issues for expatriates presented by AmCham Bahrain. The guest speaker, Stuart Horwich, is a U.S. attorney who has extensive experience advising international clients on U.S. tax issues. The seminar covered topics such as U.S. citizens' tax liability regardless of residence, income tax rates and brackets, exclusions for earned and housing income abroad, reporting of foreign bank accounts, and options for non-filers to become compliant.
This document provides guidance on defining, preventing, and reporting fraud involving federal education grant funds. It defines fraud and the two types - civil and criminal. It discusses who commits education fraud, examples of fraud, applicable laws like the False Claims Act, and vulnerabilities in grant administration that could enable fraud. Unallowable costs under federal cost principles are also outlined. The document aims to help grant recipients and administrators identify and report potential fraud.
The United States Department of Justice and Securities and Exchange Commission have dramatically increased their efforts to prosecute companies under The Foreign Corrupt Practices Act (“FCPA”). If your company conducts business outside of the United States, it is imperative that you understand the FCPA. Criminal and civil penalties may result for those that violate the FCPA. Further, officers and directors can be prosecuted even if they were not directly involved in the act that constitutes a violation of the FCPA. Recent trends have also shown that no industry is immune; even companies in traditionally “low-risk” industries are subject to prosecution.
This document summarizes the services provided by Pre-Paid Legal Services, including legal plans that cover preventative legal services, motor vehicle legal services, trial defense services, IRS audit services, and identity theft protection services. It discusses the costs of these plans, which start at $15.95 per month. Real customer success stories are also presented to demonstrate how the plans have helped people with legal issues.
Pre-Paid Legal Services provides legal services and identity theft protection plans for individuals and families. It was founded in 1972 and offers a variety of services including preventative legal care, traffic ticket defense, trial defense, IRS audit assistance, and identity theft monitoring and restoration. For a monthly fee of $26 or less, members receive access to attorneys for consultations and representation on covered legal matters. Additional services like identity theft protection can be added for $9.95 per month. Associates are paid commissions for selling memberships, with opportunities to earn bonuses and advance payments.
Pre-Paid Legal provides legal services and identity theft protection plans for individuals and families. It was founded in 1972 and offers a variety of services including preventative legal care, traffic ticket defense, trial defense, IRS audit assistance, and identity theft monitoring and restoration. Customers pay a monthly fee of $26-35.95 depending on the plan. Associates can earn commissions by selling memberships and building a sales team. The timing is right for growth as the legal services industry is poised for increased penetration. Customer stories demonstrate how the plans have helped people with legal and identity issues.
This document discusses Pre-Paid Legal Services and their legal plans and identity theft protection services. It outlines three major problems facing people today: not having enough money and time freedom due to escalating expenses, identity theft becoming a major issue, and lack of access to legal help for everyday life events. It then describes Pre-Paid Legal's solutions which include legal plans that provide consultations, document reviews, will preparation, traffic ticket assistance, and trial defense discounts. An identity theft protection plan is also described. The timing of promoting these services is discussed as identity theft becomes a bigger risk.
This document provides an overview of Pre-Paid Legal Services and their identity theft protection services. It discusses 3 major problems facing people today: lack of money/time freedom, escalating expenses, and identity theft. Pre-Paid Legal offers a legal services plan for $26/month that provides phone consultations, contract reviews, will preparation, traffic ticket assistance, trial defense services, and identity theft monitoring and restoration. Their identity theft protection, called Identity Theft Shield, provides credit monitoring, restoration services if identity theft occurs, and assistance from the risk consulting firm Kroll.
This document provides information about taxes in Fairfax County, Virginia for the period of July 1, 2016 to June 30, 2017. It outlines various tax deadlines and ways to pay different types of taxes, including personal property tax on vehicles, real estate tax, and business license taxes. It also describes options for tax relief for seniors, disabled individuals, veterans, and military families. The document provides contact information for additional questions about Fairfax County taxes.
Chamberlain Hrdlicka is a law firm founded in 1965 that has grown to over 100 attorneys providing tax planning, controversy, and litigation services. It continues its tradition of personalized service for clients ranging from start-ups to large multinational companies.
Sebastien Chain concentrates on tax controversies at all levels of dispute resolution and advises on international and domestic transactions. Jaime Vasquez handles federal, state, and international tax controversy and transactional matters, resolving IRS examinations and civil/criminal tax litigation.
Adrian Ochoa previously clerked for a Tax Court judge and now represents entities and individuals in audits, appeals, and tax litigation.
Pre-Paid Legal Services provides legal services and plans for individuals and families. Their plans offer preventative legal services like contract and document reviews, will preparation, and phone consultations. They also provide services for motor vehicle issues, trial defense, IRS audits, and identity theft issues. Members receive access to attorneys for advice and representation on covered legal matters.
Business Law Training | State and Local Taxes: Key Developments That Will Aff...Quarles & Brady
State and local tax laws are constantly changing in ways that will affect businesses, with over 1,000 changes each year across the 50 states and 97,000 local governments. Proposed federal tax reform could also impact state tax liabilities by changing what items are taxable. States are increasingly aggressive in areas like economic nexus laws, digital goods taxes, and unclaimed property audits to generate more tax revenue.
FBAR and US Taxes for Expatriates - Intercam Presentation , Ixtapa, MexicoDon Nelson Tax Attorney
- US citizens living abroad, including in Mexico, are required to file US tax returns and report foreign financial accounts over $10,000. Failure to do so can result in penalties.
- There are tax treaties between the US and Mexico to exchange tax information. The IRS is increasing audits of US expatriates due to inaccurate filings. It's important for expats to properly report all foreign income and assets.
- Expats have options if they have not filed previously, including streamlined filing programs. Filing past returns or disclosures without penalties is possible in some cases. Proper filing and documentation is important to avoid audits.
Foreign bank account reporting requirements were established in 1970 to address concerns about US persons hiding assets and evading taxes through foreign accounts. In recent years, the IRS has stepped up enforcement of these FBAR reporting requirements, including increasing penalties, expanding the definition of foreign accounts, and collaborating with foreign governments like Switzerland to obtain client names. Tax preparers must also exercise due diligence in inquiring about foreign accounts to avoid penalties for themselves.
Carr Maloney PC is a litigation firm providing legal services throughout the mid-Atlantic region. The firm helps businesses and individuals meet all of their legal needs by simplifying complex issues. The document discusses recent litigation and regulatory issues affecting for-profit higher education institutions, including increased potential for class action lawsuits against institutions due to new Department of Education regulations prohibiting mandatory arbitration clauses and internal grievance procedures. It also summarizes ongoing litigation seeking more transparency in the USCIS H-1B visa petition process.
The document discusses several tax-related topics:
1) Small partnerships may opt out of new audit rules but some experts say they should wait to see the final regulations before deciding.
2) Private and community foundations saw significantly lower investment returns in 2015, the second year of declines.
3) Rep. Goodlatte may introduce online sales tax legislation but its passage is unclear. The bill would require states to consider a vendor's location for sales tax but use the destination for tax rates.
The new law imposes a new tax rate structure with seven tax brackets: 10%, 12%, 22%, 24%, 32%, 35%, and 37%. The top rate was reduced from 39.6% to 37% and applies to taxable income above $500,000 for single taxpayers, and $600,000 for married couples filing jointly. The rates applicable to net capital gains and qualified dividends were not changed. The “kiddie tax” rules were simplified. The net unearned income of a child subject to the rules will be taxed at the capital gain and ordinary income rates that apply to trusts and estates. Thus, the child's tax is unaffected by the parent's tax situation or the unearned income of any siblings.
Why And Where To Set Up A Foreign Trust For Asset ProtectionEllington78Ellington
A foreign trust must satisfy certain reporting requirements to the IRS, including filing Form 3520-A annually. The key forms are Form 3520-A, Form 5471 if owning a foreign corporation over 10%, and Form 8938 for foreign financial assets over a threshold. Whether a trust is domestic or foreign determines special reporting, and penalties can be imposed for failing to meet reporting rules. Understanding how and when to report a foreign trust to the IRS is important to avoid issues.
The document summarizes the services provided by Pre-Paid Legal Services, Inc. It discusses:
- The company's history of over 30 years in business and being publicly traded since 1976.
- The legal plan covers the member, spouse, and dependents for services like phone consultations, contract reviews, will preparation, traffic ticket assistance, trial defense with increasing hours each year of membership, IRS audit assistance, and a 25% discount on other legal services.
- Sales have increased each year, reaching over $450 million in 2007. The document argues people are more likely to need legal assistance than hospitalization, and that Pre-Paid Legal services function similar to health insurance for legal costs.
The document summarizes the benefits and services provided by Pre-Paid Legal Services, including legal services to address everyday legal needs, identity theft protection services, credit monitoring and restoration assistance. It outlines coverage for legal consultations, document reviews, will preparation, traffic violations, identity theft issues and IRS audits. Additional services include trial defense hours, a 25% discount on other legal services, and 24/7 legal assistance through the Legal Shield program. Identity theft protection includes credit monitoring, identity theft restoration assistance through Kroll, and additional identity theft shield services for a small monthly fee added to the basic legal services plan.
This document provides information about a seminar on U.S. taxation issues for expatriates presented by AmCham Bahrain. The guest speaker, Stuart Horwich, is a U.S. attorney who has extensive experience advising international clients on U.S. tax issues. The seminar covered topics such as U.S. citizens' tax liability regardless of residence, income tax rates and brackets, exclusions for earned and housing income abroad, reporting of foreign bank accounts, and options for non-filers to become compliant.
This document provides guidance on defining, preventing, and reporting fraud involving federal education grant funds. It defines fraud and the two types - civil and criminal. It discusses who commits education fraud, examples of fraud, applicable laws like the False Claims Act, and vulnerabilities in grant administration that could enable fraud. Unallowable costs under federal cost principles are also outlined. The document aims to help grant recipients and administrators identify and report potential fraud.
The United States Department of Justice and Securities and Exchange Commission have dramatically increased their efforts to prosecute companies under The Foreign Corrupt Practices Act (“FCPA”). If your company conducts business outside of the United States, it is imperative that you understand the FCPA. Criminal and civil penalties may result for those that violate the FCPA. Further, officers and directors can be prosecuted even if they were not directly involved in the act that constitutes a violation of the FCPA. Recent trends have also shown that no industry is immune; even companies in traditionally “low-risk” industries are subject to prosecution.
This document summarizes the services provided by Pre-Paid Legal Services, including legal plans that cover preventative legal services, motor vehicle legal services, trial defense services, IRS audit services, and identity theft protection services. It discusses the costs of these plans, which start at $15.95 per month. Real customer success stories are also presented to demonstrate how the plans have helped people with legal issues.
Pre-Paid Legal Services provides legal services and identity theft protection plans for individuals and families. It was founded in 1972 and offers a variety of services including preventative legal care, traffic ticket defense, trial defense, IRS audit assistance, and identity theft monitoring and restoration. For a monthly fee of $26 or less, members receive access to attorneys for consultations and representation on covered legal matters. Additional services like identity theft protection can be added for $9.95 per month. Associates are paid commissions for selling memberships, with opportunities to earn bonuses and advance payments.
Pre-Paid Legal provides legal services and identity theft protection plans for individuals and families. It was founded in 1972 and offers a variety of services including preventative legal care, traffic ticket defense, trial defense, IRS audit assistance, and identity theft monitoring and restoration. Customers pay a monthly fee of $26-35.95 depending on the plan. Associates can earn commissions by selling memberships and building a sales team. The timing is right for growth as the legal services industry is poised for increased penetration. Customer stories demonstrate how the plans have helped people with legal and identity issues.
This document discusses Pre-Paid Legal Services and their legal plans and identity theft protection services. It outlines three major problems facing people today: not having enough money and time freedom due to escalating expenses, identity theft becoming a major issue, and lack of access to legal help for everyday life events. It then describes Pre-Paid Legal's solutions which include legal plans that provide consultations, document reviews, will preparation, traffic ticket assistance, and trial defense discounts. An identity theft protection plan is also described. The timing of promoting these services is discussed as identity theft becomes a bigger risk.
This document provides an overview of Pre-Paid Legal Services and their identity theft protection services. It discusses 3 major problems facing people today: lack of money/time freedom, escalating expenses, and identity theft. Pre-Paid Legal offers a legal services plan for $26/month that provides phone consultations, contract reviews, will preparation, traffic ticket assistance, trial defense services, and identity theft monitoring and restoration. Their identity theft protection, called Identity Theft Shield, provides credit monitoring, restoration services if identity theft occurs, and assistance from the risk consulting firm Kroll.
This document provides information about taxes in Fairfax County, Virginia for the period of July 1, 2016 to June 30, 2017. It outlines various tax deadlines and ways to pay different types of taxes, including personal property tax on vehicles, real estate tax, and business license taxes. It also describes options for tax relief for seniors, disabled individuals, veterans, and military families. The document provides contact information for additional questions about Fairfax County taxes.
Chamberlain Hrdlicka is a law firm founded in 1965 that has grown to over 100 attorneys providing tax planning, controversy, and litigation services. It continues its tradition of personalized service for clients ranging from start-ups to large multinational companies.
Sebastien Chain concentrates on tax controversies at all levels of dispute resolution and advises on international and domestic transactions. Jaime Vasquez handles federal, state, and international tax controversy and transactional matters, resolving IRS examinations and civil/criminal tax litigation.
Adrian Ochoa previously clerked for a Tax Court judge and now represents entities and individuals in audits, appeals, and tax litigation.
Pre-Paid Legal Services provides legal services and plans for individuals and families. Their plans offer preventative legal services like contract and document reviews, will preparation, and phone consultations. They also provide services for motor vehicle issues, trial defense, IRS audits, and identity theft issues. Members receive access to attorneys for advice and representation on covered legal matters.
Business Law Training | State and Local Taxes: Key Developments That Will Aff...Quarles & Brady
State and local tax laws are constantly changing in ways that will affect businesses, with over 1,000 changes each year across the 50 states and 97,000 local governments. Proposed federal tax reform could also impact state tax liabilities by changing what items are taxable. States are increasingly aggressive in areas like economic nexus laws, digital goods taxes, and unclaimed property audits to generate more tax revenue.
FBAR and US Taxes for Expatriates - Intercam Presentation , Ixtapa, MexicoDon Nelson Tax Attorney
- US citizens living abroad, including in Mexico, are required to file US tax returns and report foreign financial accounts over $10,000. Failure to do so can result in penalties.
- There are tax treaties between the US and Mexico to exchange tax information. The IRS is increasing audits of US expatriates due to inaccurate filings. It's important for expats to properly report all foreign income and assets.
- Expats have options if they have not filed previously, including streamlined filing programs. Filing past returns or disclosures without penalties is possible in some cases. Proper filing and documentation is important to avoid audits.
Foreign bank account reporting requirements were established in 1970 to address concerns about US persons hiding assets and evading taxes through foreign accounts. In recent years, the IRS has stepped up enforcement of these FBAR reporting requirements, including increasing penalties, expanding the definition of foreign accounts, and collaborating with foreign governments like Switzerland to obtain client names. Tax preparers must also exercise due diligence in inquiring about foreign accounts to avoid penalties for themselves.
US Expatriate Tax Presentation given in Puerto Vallarta and Melaque Mexico for Americans living there concerning filing FBAR forms, form 8938 and other required IRS foreign reporting forms by Don D. Nelson, Attorney, CPA. His website at www.taxmeless.com has a wealth of additional information
Big John, a U.S. citizen living in the Philippines, must file several IRS forms to report his foreign income and bank accounts. These include Form 1040 to report worldwide income to the IRS. He may also need to file Form 1116 if he paid foreign taxes, and Forms 3520 or 3520-A to report any foreign trusts or corporations he has an interest in. Big John must file an FBAR if he has over $10,000 in foreign bank accounts, and may need to report foreign accounts under FATCA as well. Failure to file these informational forms can result in penalties from the IRS.
Big John, a U.S. citizen living in the Philippines, must file several IRS forms to report his foreign income and bank accounts. These include Form 1040 to report worldwide income, as well as FBAR and FATCA forms to disclose foreign bank accounts and financial assets. Failure to file these informational forms can result in penalties from the IRS, even if no tax is due. The presentation provides examples and thresholds for when these various forms are required.
What Is The Marital Estate Tax Deduction in ConnecticutBarry D Horowitz
Accumulating wealth is the first order of business, but you must also preserve your wealth for the benefit of the next generation and beyond. Learn more about marital estate tax deduction in Connecticut in this presentation.
In Issue 12 of The OHL Wire, we look at how the rise in minimum wage affects you and what are the hidden costs of retirement villages in NSW. We also look at everything you need to know about estate administration. We discuss whether now is the right time to legalise same-sex marriage in Australia. We check out upcoming events in Sydney and invite you to attend a unique and entertaining activity, Mozart’s classic comedic opera - The Marriage of Figaro.
15 07-24 Puerto Rico Income Tax IncentivesBruce Givner
Instead of expatriating, it is better to consider retaining your U.S. citizenship and becoming a resident of Puerto Rico. You sign a 20 year contract with the government. As a result, as an individual, you can pay zero federal and state tax on local interest, dividends and capital gains. The incentives for business are also phenomenal: a 4% rate with profits paid to owners tax free. A business must have 3 employees of which husband and wife can count as two.
The document discusses cross-border tax planning and compliance for US persons living in Canada. It outlines how to determine US tax exposure based on citizenship, residency and foreign assets. US persons are required to file annual tax returns, FBARs, and disclosures of foreign accounts, investments and businesses. Failure to comply can result in penalties and criminal charges. Integrated planning is needed to structure assets and income to minimize US tax obligations while meeting Canadian regulations.
Trust fund taxes are unique, especially in that the IRS has the ability to personally assess responsible individuals for their collection. In addition to the civil issues, criminal exposure exists for the same conduct.
LegalShield provides legal plans and identity theft protection services to over 3.5 million members across the United States and Canada, generating approximately $450 million in annual revenue. They have a network of over 34,000 law firms across 49 states and Canada and employ 650 people at their headquarters in Ada, Oklahoma. LegalShield's plans offer members access to legal advice and services for both personal and business legal issues for a low monthly fee.
Numerous US individuals own overseas assets or have an interest in them. The IRS may penalize these taxpayers if they fail to report these assets on their tax filings. Consequently, the streamlined filing compliance procedure exists to assist these individuals with:
– A streamlined process to file delinquent or amended tax returns;
– Resolving tax and penalty procedures for filing delinquent or amended returns; and
– Resolving penalty and tax obligations
This webinar will guide you through the complexities of Streamlined Filing Compliance Procedures and make your US Tax Journey Exponentially easier!
Takeaways:
Topics that we will cover in the upcoming webinar:
1. Introduction to Streamlined filing
2. Eligibility Criteria for Streamlined Filing
3. Types of Streamlined Filing
– Streamlined Foreign Offshore Procedures
– Streamlined Domestic Procedures
4. Other rules and regulations
5. FAQs, and much more
Who Attended?
- US Citizens Living in the US and Outside
- CPAs, EAs, CAs, ACCAs
- Tax and Accounting Professionals with US Citizens as their clients
An accounting firm owner and his wife were sentenced to prison for tax fraud. They pleaded guilty to concealing over $650,000 in income by claiming false business expenses which they actually spent on vacations and luxury items. A family of four was also sentenced for hiding over $25 million in employee wages from the IRS over several years. An inmate was sentenced to additional prison time for filing false tax returns seeking refunds for fellow inmates.
We give members access to professional legal counsel not only for traditional legal problems, but for everyday events where legal review should be routine, but rarely is. For Pre-Paid Legal members, access to legal counsel is only a toll-free phone call away
This newsletter provides updates on legal industry happenings and a pilot program in Philadelphia Municipal Court. It urges opposing a proposal to assess Pennsylvania sales tax on legal services, which would burden clients and create uncertainties. Recent changes to PA IOLTA regulations require lawyers to maintain detailed records of client funds held in trust, including individual ledgers and monthly reconciliations. Compliance with accounting and record-keeping rules is important.
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1. What Happens Off-Shore,
Stays Off-Shore – NOT
1
June 12, 2014
DENNIS N. BRAGER
CERTIFIED TAX SPECIALIST
STATE BAR OF CALIFORNIA
BRAGER TAX LAW GROUP
A PROFESSIONAL CORPORATION
10880 WILSHIRE BLVD, SUITE 880
LOS ANGELES CA 90024
(310) 208-6200 FAX (310) 478-8030
www.bragertaxlaw.com
www.taxproblemattorneyblog.com
2. MCLE
• Sign into the webinar with your first and last name
and email address – this is our electronic record that
you attended
• Email Eva for your webinar evaluation form
efarooqi@bragertaxlaw.com
• Upon our receipt of your form, we will email you a
Certificate of Attendance
2
3. Dennis Brager
• Ex-IRS Trial Lawyer
• State Bar Certified Tax Specialist
• 30+ Years Tax Dispute Experience
with IRS, EDD, BOE, FTB
Problems
• Nationally Recognized Tax
Litigation Attorney
3
4. Dennis Brager
Having worked for the IRS for six years, he gained valuable insight into the inner workings of that organization. This
not only helps in developing the right strategies, but facilitates working with the system quickly and efficiently. Mr. Brager has
limited his practice to representing clients having disputes with the IRS, the Franchise Tax Board, the State Board of Equalization
and the Employment Development Department--both at trial and administrative levels.
He has appeared on ABC Television’s Good Morning America show, Fox Business News, and TV One Access. He has
also spoken before the California Continuing Education of the Bar, the California Society of CPAs, the UCLA Tax Controversy
Institute, the California State Bar Tax Section, the Consumer Rights Litigation Conference, the California Trial Lawyers Association,
the American Bar Association, the Warner Center Estate and Tax Planning Council, and the National Association of Enrolled
Agents. Dennis Brager has been an instructor at Golden Gate University's Masters in Taxation Program and a guest speaker at the
University of Southern California. Mr. Brager has testified as an expert witness on Federal tax matters.
His articles have appeared in the California Lawyer, Daily Journal, Taxation for Lawyers, Los Angeles Lawyer, The
Consumer Advocate, Family Law News, California Tax Lawyer, Journal of Tax Practice and Procedure, and Journal of Taxation of
Investments. They include “Offshore Voluntary Disclosure – The Next Generation,” “Partial Offshore Tax Amnesty – Voluntary
Disclosure 2.0,” Anatomy of an OPR Case (Definitely Not R.I.P.),” “FBAR and Voluntary Disclosure,” “The Tax Gap and Voluntary
Disclosure,” “Circular 230: An Overview,” “Recent Developments in Tax Procedure,” “Damages, Rescission and Debt Cancellation
as Client Income,” “Ponzi Scheme Victims May Be Able to Mitigate Losses with Tax Deduction,” “Prevailing Party-Recovering
Attorneys Fees From the IRS,” “The Taxpayer Bill of Rights--A Small Step Toward Reining in the IRS,” “Challenging the IRS Requires a
Cohesive Strategy,” “The Innocent Spouse Defense,” “IRS Guidelines for Installment-Payment Agreements,” “Expert Advice: New
Rules on 1099 Forms,” “Tax Brakes: The Taxpayer Bill of Rights 2,” and “Expert Advice: Avoiding Payroll Taxes.”
Mr. Brager received his undergraduate degree from Pace University (B.B.A., magna cum laude, 1975,
Accounting/Finance), and his law degree from New York University (J.D., 1978). He is a former chair of both the Tax Compliance,
Procedure and Litigation Committee of the Los Angeles County Bar Association, and the California State Bar, Tax Procedure and
Litigation Committee. He is admitted to practice before the U.S. Supreme Court, the Ninth Circuit Court of Appeals, U.S. Claims
Court, U.S. Tax Court, U.S. District Court and the U.S. Bankruptcy Court.
Dennis Brager is a California State Bar Certified Tax Specialist and a former Senior Trial
Attorney for the Internal Revenue Service's Office of Chief Counsel. In addition to representing the IRS in
court, he advised the Service on complex civil and criminal tax issues. He now has his own four attorney
firm in Westwood, and has been named as a Super Lawyer in the field of Tax Litigation by Los Angeles
Magazine. He has been quoted as a tax expert, by Business Week, the Daily Journal, the National Law
Journal, The Daily Beast, USA Today, Palm Beach Daily News, Money Laundering, the Los Angeles Daily
Journal and Tax Analyst.
4
5. The Problem
• U.S. Persons who have signatory authority over, or a financial
interest in an offshore account must file an FBAR- Form
FINCEN 114 (formerly Form TD F 90-22.1) for accounts with
combined balances over 10k U.S. dollars.
o U.S. Person = U.S. Citizen or U.S. “resident”
o Currently a resident means:
• a resident alien under IRC Section 7701(b) includes:
o Green card test
o Substantial presence test
• any entity including but not limited to, a corporation, partnership, trust,
or limited liability company created, organized, or formed under the laws
of the United States
o Substantial presence test may not apply prior to the issuance of latest
FINCEN regulations on March 28, 2011
5
6. The Problem (Continued)
o Financial Interest Definition
• Owner of record or holder of legal title
• A United States person has a financial interest in each foreign account for
which the owner of record or holder of legal title is
a) A person acting as an agent, nominee, attorney or in some other capacity on
behalf of the United States person with respect to the account,
b) A corporation in which the United States person owns directly or indirectly more
than 50 percent of the voting power or the total value of the shares, a
partnership in which the United States person owns directly or indirectly more
than 50 percent of the interest in profits or capital, or any other entity (other than
certain exempted entities) in which the United States person owns directly or
indirectly more than 50 percent of the voting power, total value of the equity
interest or assets, or interest in profits,
c) A trust, if the United States person is the trust grantor and has an ownership
interest pursuant to Code Sections 671 to 679, or
d) A trust in which the United States person either has a present beneficial interest
in more than 50 percent of the assets or from which such person receives more
than 50 percent of the current income.
6
7. o Schedule B Question: At any time during 2013, did you have a financial
interest in or signature authority over a financial account (such as a
bank account, securities account, or brokerage account) located in a
foreign country? See instructions…..
• If “Yes,” are you required to file FinCEN Form 114, Report of
Foreign Bank and Financial Accounts (FBAR), formerly TD F 90-
22.1, to report that financial interest or signature authority? See
FinCEN Form 114 and its instructions for filing requirements and
exceptions to those requirements
o Checking the box that says "No", subjects a taxpayer to a possible criminal
charge of filing a false income tax return which is a felony.
The Problem (Continued)
7
8. FBARs Are Due June 30th
• They are not filed with the tax return, but must be filed
electronically with the Financial Crimes Enforcement Network
(FINCEN).
• Extensions of time to file federal income tax returns do not
extend the time for filing FBARs. There is no statutory or
regulatory provision granting an extension of time for filing
FBARs.
• Statute of Limitations for the IRS to Assess the FBAR Penalty is
6 years from June 30th even though no FBAR was filed.
8
9. Criminal Penalties
• Willful failure to file an FBAR. Up to $250,000 or 5 years in jail
or both.
• Willful failure to file an FBAR while violating another "law of
the United States" or as part of a pattern of any illegal activity
involving more than $100k in a 12 month period. Up to $500k
or 10 years in jail or both.
• Filing a false return, IRC § 7206(1). Up to 3 years in jail or
$100,000 or both.
• Tax Evasion. IRC § 7201. Up to $100,000 or 5 years in jail or
both.
9
10. Civil FBAR Penalties
• Negligent Violation. Up to $10k for each violation.
o The IRS takes the position that if there are multiple accounts then
there are multiple violations
• e.g. a taxpayer who has three different accounts would be liable for
$30,000 of penalty each year.
• This position has not yet been litigated
10
11. More Civil FBAR Penalties
• Willful failure to file. Up to the greater of $100,000, or 50
percent of the amount in the account at the time of the
violation.
• Willful failure to keep records of the account. Any person
required to file the FBAR must keep certain records of the
account for five years.
11
12. Civil Title 26 Penalties
• Civil Fraud Penalty for Willful Failure to Report Income. 75% of the tax due.
• Accuracy Related Penalty for negligent failure to report. 20% of the tax due.
• Penalties for failure to file a Form 3520 reporting the transfer of funds to a foreign
trust or receipt of a distribution from a foreign trust, which begins at 35% of the
amount transferred to or received from the foreign trust.
• Penalties for failure to file a Form 3520 to report the receipt of a gift or inheritance
from a foreign person or estate, or a gift received from a foreign corporation or
partnership, which begins at 5% per month of the value of the gift and can reach
as high as 25% of the value.
• Penalties for failure to report transfers of property to a foreign corporation (Form
926), which begin at 10% of the value of the property transferred to the
corporation and which can reach a maximum of $100,000 per return.
12
13. Civil Title 26 Penalties
(Continued)
• Penalties for failure to file foreign corporation information returns (Form 5471 and
or Form 5472), which begin at $10,000 and can run as high as $50,000 per return.
• Penalties for failure to file Form 3520-A reflecting ownership of a foreign trust
under the grantor trust rules, which consists of a penalty of 5% of trust assets.
• Penalties for failure to file foreign partnership information returns (Form 8865),
which start at $10,000 and can reach a maximum of $50,000 per return, plus up to
$100,000 of the value of property transferred to the foreign partnership.
• There is no statute of limitations on the failure to file the various foreign
information reporting forms.
• Interest.
13
14. Not Just For Tax Cheats
• Client a U.S. Citizen decides to buy a flat in London so that he will have a place to
stay while on vacation, and he might retire there. Opens an account in England
and wires $500k to an account at the Bank of Scotland to use as a down payment.
Two weeks later he turns that money over to his solicitor to close the purchase.
The client is required to file an FBAR.
• Client born in the U.S. moved to Australia to live and work. As a natural
consequence he has accounts in Australia. FBAR required.
• Client was born in India; he has lived in this country for 20 years, but still maintains
accounts in India in order to provide for family members there, and to invest a
portion of his assets in the growing Indian economy. FBAR required.
• Client is the vice president of a company with a division in France. The vice-
president is a signer on the corporate accounts in France. The VP must file his own
FBAR, in addition to any corporate FBARs.
• Client has a Canadian Retirement Account. FBAR required.
• Client fled the Iranian revolution in the mid-70s, moved to the United States, and
placed money in Israeli banks for safety. FBARs are required.
14
15. How Will the IRS Find Out?
Let Me Count the Ways
• FATCA (Foreign Account Tax Compliance Act of 2009)
• IRS Investigations
o Credit Suisse
o Julius Baer
o HSBC
o Basler Kantonalbank
o Bank Leumi
o Bank Hapoalim
o And 10 others
15
16. Swiss Bank Tax Amnesty
• Swiss Banks had until Dec. 31, 2013 to seek non-prosecution
agreements
• 106 Swiss Banks signed up
• Penalties of up to 50% of the maximum aggregate account
balance for Category 2 banks
• Information regarding the accounts held by the bank that
existed as of Aug. 1, 2008 must be turned over to the IRS as
part of the deferred prosecution agreements
16
17. FATCA
• July 1, 2014 FATCA withholding begins.
• FATCA requires a 30 percent withholding tax on any "withholdable
payment" made either to an FFI (e.g. an offshore bank) or certain
other entities if it fails to comply with new reporting, disclosure,
and related requirements.
• FATCA reporting of specific account information is effective for
accounts open as of January 1, 2014, and the reports are due March
15, 2015.
• FFIs are required to:
o Obtain information from each account holder as is necessary to determine
which accounts are "U.S. accounts"
o Comply with verification and due diligence procedures with respect to the
identification of U.S. accounts
17
18. FATCA (Continued)
o Report annually certain information related to any U.S. account
maintained by such institution
o Deduct and withhold 30 percent on certain pass thru payments made
to the benefit of an account holder that refuses to provide the
required information (a "recalcitrant account holder")
o Attempt to obtain a waiver in any case in which any foreign law would
(but for a waiver) prevent reporting of information under the provision
related to any U.S. account maintained by such institution and, if a
waiver is not obtained, to close the account.
o File a 1099 with the IRS, or provide detailed information about the
foreign account. E.g.
• Name and address
• Account Balance
• Gross Receipts and Gross withdrawals
18
19. More Exposure
• Whistle Blowers
o Disgruntled Bank Employees
o Bank Employees Under Indictment
o We’re Just in it for the Money
o Ex-Spouses
o Ex-employees
o Ex-business partners
• Foreign Banks. Most foreign financial institutions are closing accounts
of U.S. persons who refuse to fill out Form W-9, and agree to
information reporting to the IRS.
• IRS Activity
o HSBC Summons
o Interview Pool of 44,000 taxpayers participating in OVDP/OVDI
o Sometime in 2012 Credit Suisse turned over client information to IRS pursuant to a
treaty request
o Guilty Plea by Wegelin Bank
o Swiss Bank Clariden Leu turned over client information to IRS in late 2011
o Ongoing negotiations with the Swiss government and Fourteen Swiss Banks who are
under investigation by IRS and Department of Justice
o 110 clients turned over to IRS by Swisspartners
19
20. Tax Amnesty - Offshore Voluntary
Disclosure Program (OVDP)
• Who is not eligible?
o Taxpayers under audit whether or not related to offshore issues
o Taxpayers under investigation by CI (Criminal Investigation)
o Taxpayers with illegal source of income
20
21. OVDP-History
• OVDP Provided for a 20% Penalty for Disclosures Prior to Oct.
16, 2009
o OVDP Permitted a Taxpayer to argue for less than a 20% penalty
without “opting out”
• OVDI 2011 Provided for a 25% Penalty for Disclosures Prior to
Sept 10, 2011
• OVDP 2012 Provides for a 27.5% Penalty
o Announced Jan. 9, 2012. IRS Notice 2012-5
o Currently there is no ending date, but IRS reserves the right to
terminate the program at any time
21
22. OVDP Documentation
• The following information must be submitted as part of the
complete OVDP package after both pre-clearance, and:
o Copies of previously filed original (and, if applicable, previously filed
amended) federal income tax returns for tax years covered by the
voluntary disclosure;
o Amended federal income tax returns with applicable schedules detailing
the amount and type of previously unreported income from the account
or entity;
o A completed “Foreign Account or Asset Statement” for each previously
undisclosed foreign account or asset during the voluntary disclosure
period (available on the IRS website);
o For taxpayers disclosing offshore financial accounts with an aggregate
highest account balance in any year of $1 million or more, a completed
“Foreign Financial Institution Statement” for each foreign financial
institution with which the taxpayer had undisclosed accounts or
transactions during the voluntary disclosure period (available on the IRS
website);
22
23. OVDP Documentation
(Continued)
• “Taxpayer Account Summary With Penalty Calculation” (available on the IRS
website);
• A check in full payment of the total tax, interest and all applicable penalties except
the “in-lieu” penalty;
o “Collection alternatives” may be available
• For taxpayers disclosing offshore financial accounts with an aggregate highest
account balance in any year of $500,000 or more, copies of offshore financial
account statements reflecting all account activity for each of the tax years covered
by the voluntary disclosure;
• For those taxpayers disclosing offshore financial accounts with an aggregate
highest account balance of less than $500,000, copies of offshore financial account
statements reflecting all account activity for each of the tax years covered by the
voluntary disclosure must be readily available upon request; and
• Waivers extending the time for the IRS to assess Title 26 tax, interest, and penalty
as well as FBAR penalties.
23
24. OVDP Penalties
• 27.5% of the highest account balance at any time during the prior 8
years.
o The penalty base is not limited to foreign financial accounts required
to be reported on an FBAR. Instead the 27.5% (or 12.5% or 5%)
penalty applies to all of the taxpayer’s offshore holdings that are
related in any way to “tax non-compliance”
o An accuracy related penalty of 20% of the tax due pursuant to IRC
Section 6662
o If applicable, the failure to file and failure to pay penalties under IRC
Section 6651(a)(1) and (a)(2)
• The taxpayer may not argue lack of willfulness
• No reasonable cause exception
24
25. Relief for Non-Citizen
Non Filers
• Streamlined Compliance Procedure Announced Aug. 31, 2012
• Who is Eligible?
o Must have resided outside of the U.S. since Jan. 1, 2009
o Cannot have filed a U.S. tax return during the same period; and
o Must present a "low level compliance risk.”
• The Benefits
o Only three years of tax returns need to be filed vs. eight for OVDP
o No FBAR or other penalties
o Less documentation
25
26. How is Compliance
Risk Determined?
• The tax due for the prior three years should be less than
$1,500 in each year. The IRS will consider, however, cases
where the liability is higher. Even if the tax due is less than
$1,500 if any of the following factors are present then the
compliance risk rises, and the taxpayer may not be eligible to
participate. The factors are:
o If any of the returns submitted through this program claim a refund;
o If there is material economic activity in the United States;
o If the taxpayer has not declared all of his/her income in his/her
country of residence;
o If the taxpayer is under audit or investigation by the IRS;
26
27. Compliance Risk
(Continued)
o If FBAR penalties have been previously assessed against the taxpayer
or if the taxpayer has previously received an FBAR warning letter;
o If the taxpayer has a financial interest or authority over a financial
account(s) located outside his/her country of residence;
o If the taxpayer has a financial interest in an entity or entities located
outside his/her country of residence;
o If there is U.S. source income; or
o If there are indications of "sophisticated tax planning or avoidance."
27
28. Downsides of Streamlined
Compliance Procedure
• The new procedure provides no protection from the risk of
criminal prosecution
• Once a submission is made if the IRS determines that the
Streamlined Compliance Procedure is not appropriate, the
taxpayer may not participate in the Offshore Voluntary
Disclosure Program (OVDP)
• It is not a DIY project, and will require substantial legal and
accounting fees to produce:
o 3 years of tax returns and 6 years of FBARs
o An analysis to determine whether or not the client has criminal
exposure which makes the streamlined procedure inadvisable
28
29. Limited OVDP Relief
• For accounts that do not exceed $75,000 the penalty is 12.5% of the
highest aggregate balance
o All other terms remain the same
o Non-financial assets are taken into account for determining the $75,000
threshold
• 5% Penalty
o Category 1 “Inherited” Accounts
• Taxpayer did not open the account
• Minimal Infrequent Contact
• Did not withdraw more than $1k in any one year
• Prove that all taxes were paid on the principal balance going back to Jan. 1,
1991.
o Category 2. The Brain Dead Citizen
• Taxpayers who are foreign residents and who were unaware they were
U.S. citizens.
29
30. Limited OVDP Relief (Continued)
o Category 3. Foreign Residents Who Meet All of the Following
Conditions:
• Taxpayer resides in a foreign country
• Has made a “good faith showing” that she has timely complied with all tax
reporting and payment requirements in the country of residence; and
• Has $10,000 or less of U.S. source income each year
• Category 3 taxpayers may exclude the value of non-financial
assets from the penalty base.
• Category 3 did not exist under the 2009 OVDP, and therefore
qualifying taxpayers may reopen their cases with the IRS.
30
31. Alternatives to Entering OVDP:
Just Say No?
• Filing a quiet disclosure
• Filing accurate 2013 tax returns, and/or FBARs, but not self correcting prior years
• Enter OVDP followed by Opt-out
o In June 2011 IRS published an “opt-out” guide for its agents instructing them on procedures to follow in the
case of an opt-out.
• Stick head in sand, and do nothing (Not Recommended!)
• Potential Risks
o Full Blown Audit
o Potential Penalties Exceeding the Value of Offshore Assets
• Pay special attention to failure to file “information returns” e.g. 5471, 3520 etc.
o Possible criminal exposure including jail time
• Deportation of non-citizens
• Potential Rewards
o No Taxes
o No Penalties
o No Audit
31
32. Penalty Process Outside of
OVDP
• FBAR penalty imposed under the Bank Secrecy Act (BSA) not the Internal Revenue Code
• Appeals Review Available- Rubberstamp?
• The Tax Court does not have jurisdiction over the penalty. Williams v. Commissioner,
131 T.C. 54 (2008).
• FBAR penalties are not dischargeable in bankruptcy. U.S. v. Simonelli, 102 AFTR 2d 2008-
6577
• The FBAR penalty can not be collected unless the taxpayer agrees, or the IRS brings suit
in federal district court and proves that the penalty applies.
o But offsets of payments due from the federal government are possible
• FBAR Penalties can not be collected through summary IRS Collection Procedures
32
33. Malpractice Avoidance
Tactics
• Consider Circular 230 Section 10.34(d).
A practitioner may generally rely, in good faith and without verification, on
information furnished by a client. A practitioner may rely on information
provided by a client in good faith.
However, a practitioner may not ignore the implications of any information
provided to or actually known by the practitioner. If the information furnished
by the client appears to be incorrect, inconsistent with other known facts, or
incomplete, the practitioner is required to make further inquiry. Good faith
reliance contemplates that a practitioner will make reasonable inquiries when
a client provides information that implies possible participation in overseas
transactions/accounts subject to FBAR requirements
33
34. Malpractice Avoidance
Tactics (Continued)
• Obtain written affirmative representations from clients about
the non-existence of foreign assets before failing to file Form
8938, or checking the “no” box on Schedule B. Stating the
taxpayer has no financial interest in, or signatory authority
over a foreign financial account.
o Clients have short and selective memories
• Advise the client of the need to file an FBAR in writing.
o The preparer is not required to prepare the FBAR
34
35. Malpractice Avoidance
Tactics (Continued)
• Considerations Upon Discovery of Undisclosed Accounts
o The Preparer as IRS witness
• Federal Practitioner Privilege v. Attorney Client Privilege
o Circular 230, Section 10.34(c). The practitioner has a duty to advise a client of any
potential penalties likely to apply to a position taken on a return
• Statement on Standards for Tax Services No. 6, Knowledge of Error: Return Preparation
o If a member is requested to prepare the current year’s return and the taxpayer has not taken
appropriate action to correct an error in a prior year’s return, the member should consider
whether to withdraw from preparing the return and whether to continue a professional or
employment relationship with the taxpayer. If the member does prepare such current year’s
return, the member should take reasonable steps to ensure that the error is not repeated.
o While performing services for a taxpayer, a member may become aware of an error in a
previously filed return or may become aware that the taxpayer failed to file a required return.
The member should advise the taxpayer of the error and the measures to be taken. Such
recommendation may be given orally. If the member believes that the taxpayer could be
charged with fraud or other criminal misconduct, the taxpayer should be advised to consult
legal counsel before taking any action.
o Potential Conflict of Interest. Can the client claim reliance on the preparer?
35
36. Ownership of foreign stocks
must be disclosed on an FBAR.
Over half of the respondents answered incorrectly. The
answer is “it depends.” Stocks must be disclosed if only
if it is held in a financial account.
36
37. If the IRS has served a John Doe
summons on a bank, a taxpayer that
has an account at that bank may no
longer enter the Offshore Voluntary
Disclosure Program (OVDP).
37
Over 47 percent of respondents thought, incorrectly, that the
statement was true. A taxpayer MAY still enter the OVDP
38. Only U.S. citizens and legal U.S.
residents (green card holders) need to
file FBAR forms.
• Nearly 40 percent of respondents thought that only U.S.
citizens and legal U.S. residents need to file FBAR forms.
• Other persons required to file FBAR forms include individuals
present in the U.S. for 183 days or more during the calendar
year. 38
39. If you tell your CPA about your foreign
account he can’t tell the IRS unless you
give him your permission to do so.
Over 25 percent of respondents were unaware that if you tell
your CPA about your foreign account, s/he CAN tell the IRS
regardless of whether you give the CPA your permission to do so.
39
40. The owner of a foreign life insurance
policy does not need to report the
policy on an FBAR.
Nearly 25 percent of respondents did not know the
correct answer – that it depends on the circumstances.
40
43. Brager Tax Law Group
Los Angeles
10880 Wilshire Boulevard, Suite 880
Los Angeles, California 90024
Phone: 310.208.6200
Toll Free: 800.380.TAX LITIGATOR
Fax: 310.478.8030
43
@TaxProblemEsq
www.bragertaxlaw.com
www.taxproblemattorneyblog.com
Tax Litigation & Tax Controversy
Services We Provide
• Criminal Tax Defense
• FBAR and Offshore Account Problems
• Office of Professional Responsibility
(OPR) Defense
• Tax Audits & Tax Appeals
• Tax Fraud Defense
• Tax Preparer Penalty Defenses
• Innocent Spouse Defenses
• California Sales Tax Problems
• IRS and California Payroll Tax Problems
• Offers in Compromise
• Installment Payment Agreements
Editor's Notes
Substantial Presence refers to 183 days so someone here on a visa might not be a resident for FBAR purposes for purposes
An Australian Super Annuation Fund is a trust!
Consider for example a client who has low income in 2009 through 2012 because of stock market losses, or retirement, but large amounts of unreported income in prior years