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Is Making A “Quiet Disclosure” A Smart Choice For A Taxpayer With An Undisclosed Foreign Bank Account? Part II

Continued from Part I

The Risks Associated With Making A Quiet Disclosure

What happens if the IRS disagrees with Joan, Tommy, or Trevor’s explanation for filing late FBARs? In other words, what if the IRS believes that their failure to file FBARs was not inadvertent or accidental, but instead willful?

This could result in any one of a number of “parade of horribles,” the most serious of which is a referral to Criminal Investigation. While that is generally the exception and not the rule, taxpayers should be mindful of the fact that, unlike OVDP, a “quiet disclosure” does not guarantee immunity from prosecution. Read More

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Is Making A “Quiet Disclosure” A Smart Choice For A Taxpayer With An Undisclosed Foreign Bank Account? Part I

The environment that taxpayers with unreported offshore bank accounts find themselves in today is downright frightening. Some have likened it to “McCarthyism,” the term that has its origins in the period of U.S. history known as the “Second Red Scare.” Beginning in 1950 and lasting until 1956, “McCarthyism” was characterized by heightened political repression against communists, as well as a campaign spreading fear of their influence on American institutions and of espionage by Soviet agents.

Originally coined to criticize the anti-communist pursuits of Republican U.S. Senator Joseph McCarthy (Wisconsin), “McCarthyism” soon took on a broader meaning. The term is now used more generally to describe reckless, unsubstantiated accusations, as well as demonized attacks on the character or patriotism of political adversaries. Read More

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10 Essential Facts About FATCA

In the 19th century, Manifest Destiny was a widely held belief in the United States that American settlers were destined to expand throughout the continent. Historians have for the most part agreed that there are three basic themes to Manifest Destiny: the special virtues of the American people and their institutions; America’s mission to redeem and remake the west in the image of agrarian America; and an irresistible destiny to accomplish this essential duty. This spirit has endured into the 21st century with the application of FATCA over worldwide banking activity.

Never Heard of FATCA? You Will.

FATCA—the Foreign Account Tax Compliance Act—is America’s global tax law. It was quietly enacted in 2010. And after a four-year ramp up, it is finally in full effect. What is Read More

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So What’s The New Buzz On Foreign Bank Accounts?

When looking for a picture for this post, I came across this one and remembered my college English Professor. She really loved the term, “Freudian Slip” for some reason! All I knew then was that Sigmund Freud was the father of psychoanalysis but I never quite understood how that related to a Business English class, unless that was the Professor’s way of telling us we were driving her nuts! Now I know that the term, “Freudian Slip” is a “mistake in speech that shows what the speaker is truly thinking” or “to do what one is truly thinking about”.

No, this post is not about defining psychoanalytic terms, dare I say more interesting than tax stuff? Not quite, but this post is about the latest buzz from the Internal Revenue Service, about some situations US taxpayers having foreign accounts might be in and their Read More

Written by | Posted in FBAR • Individual • International • OVDP

Thinking of Hiding Money Abroad? Don’t Be A “Dirty Dog!”

In a recent IR published on January 28, 2015, the IRS said that avoiding taxes by hiding money or assets in unreported offshore accounts remains on its “annual list of scams known as the ‘Dirty Dozen’ for the 2015 filing season.” The article is quoted below:

WASHINGTON — The Internal Revenue Service today said avoiding taxes by hiding money or assets in unreported offshore accounts remains on its annual list of tax scams known as the “Dirty Dozen” for the 2015 filing season.

“The recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore,” said IRS Commissioner John Koskinen. “Taxpayers are best served by coming Read More

Written by | Posted in Individual • International • IRS • OVDP • Tax Fraud/Evasion/Crimes

Hiding Money Or Income Offshore Among The List Of Tax Scams For The 2015 Filing Season

IRS Commissioner John Koskinen was proud to announce that “the recent string of successful enforcement actions against offshore tax cheats and the financial organizations that help them shows that it’s a bad bet to hide money and income offshore and he encouraged taxpayers to come in voluntarily and getting their taxes and filing requirements in order.”

Since the first Offshore Voluntary Disclosure Program (OVDP) opened in 2009, the IRS reports there have been more than 50,000 disclosures and the IRS has collected more than $7 billion from this initiative alone. The IRS also has conducted thousands of offshore-related civil audits that have produced tens of millions of dollars. Finally, the IRS has also pursued criminal charges leading to billions of dollars in criminal fines and Read More

Written by | Posted in FATCA • IRS • OVDP • Tax Fraud/Evasion/Crimes

How Do You Know When You’re In Trouble With The Government? When The Name of Your Trust Is “Cappuccino” Spelled Backwards

The U.S. Attorney’s Office for the Southern District of New York issued a press release on January 20, 2015 announcing the guilty plea of a CEO for hiding over $ 8.4 million in offshore Swiss bank accounts. George Landegger, the Chairman and CEO of an international pulp mill company, pled guilty to willfully failing to file FBARs for accounts that he maintained at a Swiss bank located in Zurich, Switzerland.

Landegger owned these accounts for nearly ten years, from the early 2000s up until 2010. During that time, his undeclared assets reached a high value of over $8.4 million.

What got Mr. Landegger into this “hot mess?” At the most primitive level, Mr. Landegger failed to report numerous Swiss bank accounts that he held for nearly ten years. But like Read More

Written by | Posted in FBAR • OVDP • Tax Fraud/Evasion/Crimes

IRS Targeting California As Its Booming Economy Overtakes Brazil As The World’s Seventh Largest Economy

California is overtaking Brazil as the world’s seventh-largest economy, bolstered by rising employment, home values and personal and corporate income, a year after the U.S. most-populous state surpassed Russia and Italy. Brazil has a population five times bigger than California’s 38.3 million; yet the Golden State with GDP of $2.20 trillion in 2013, expanded last year by almost every measure. In contrast, Brazil’s GDP declined 1% from $2.25 trillion. California’s economy has sustained its momentum since 2013, when the value of goods and services produced in the state topped that of Russia and Italy to vault California to No. 8 in the world. California grew an average of 4.1% annually during the last three years. Who is next ahead of California in the No. 6 spot? United Kingdom with a GDP of $2.68 trillion. Read More

Written by | Posted in FATCA • IRS • Tax Fraud/Evasion/Crimes • Virtual Currency

Think You Can Hide From The IRS? Target San Diego County, California

The IRS is using its extensive Big Data resources to pin-point their investigations to the wealthiest areas in San Diego County, California. The idea being that anyone who is selected for investigation in these areas will result in a higher tax liability than those who live in less affluent areas. The government is looking for non-filers, persons engaged in on-line and virtual currency transactions, businesses cheating or delinquent on employment taxes and individuals with undisclosed foreign bank accounts.

Non-Filers

When a taxpayer does not file and the IRS has information statements indicating a filing requirement, the IRS uses the data to file a return on behalf of the taxpayer if there is a projected balance owed. In 2012, the IRS used information statements to file 803,000 Read More

Written by | Posted in FATCA • IRS • Tax Fraud/Evasion/Crimes • Virtual Currency

Sovereign Management In Panama Now Under DOJ/IRS Investigation

Important announcement to U.S. taxpayers that opened offshore bank accounts through a company called Sovereign Management & Legal, Ltd. Based in Panama, the company offers to help Americans open offshore bank accounts with nominee corporations. Knowing that many people who do take these actions are also committing tax evasion, the IRS and Justice Department obtained a John Doe summons from a federal judge. The IRS hopes to find Americans who used Sovereign to open accounts.

Federal Court Approves U.S. Government Issuance Of John Doe Summonses

A Federal Judge recently approved the Internal Revenue Service’s issuance of what is known as a “John Doe” summons to several entities in the U.S who utilized the services Read More

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Walking The Sawdust Trail

Those who responded to the altar call after one of Billy Sunday’s sermons (see video below) were said to walk the sawdust trail, because the temporary venues he preached in back in the 1910s and 1920s often had sawdust on the floor as a deodorizer.

Before he became a travelling evangelist, and possibly even before he became a Christian, depending on what source you believe, Mr. Sunday played eight seasons of Major League Baseball between 1883 and 1890. During that time, he roamed the outfield for the Chicago White Stockings, Pittsburgh Alleghenys and Philadelphia Phillies. Mr. Sunday left the game with a lifetime .248 batting average, which was pretty good for the pre-modern era. He was also a speedy player who finished in the top ten in stolen bases three times and led the league in outfield putouts in 1888. Read More

Written by | Posted in OVDP • Tax Fraud/Evasion/Crimes

U.S. Treasury Publishes Official FBAR Exchange Rates for 2014

Anyone filing an “FBAR” (Report of Foreign Bank and Financial Accounts – FinCEN Form 114) or IRS Form 8938 (Statement of Foreign Financial Assets) for calendar year 2014 will be pleased to know that the official exchange rates for 2014 have been published. As U.S. law states that no other exchange rate is permitted, it is really helpful to have these exchange rates available so early in January.

Exchange rates for other currencies can be found by clicking here.

The rates for the major foreign currencies are listed below:

 

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Written by | Posted in FBAR • International • IRS • OVDP • Treasury Regulations
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