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Monthly Archives: June 2016

Federal Agents & Prosecutors Gearing Up to Utilize “Panama Papers” in Their Prosecutions

Federal agents and prosecutors are "chomping at the bit" to exploit the Panama Papers and launch prosecutions, a senior federal law enforcement official told NBC News, but want to be sure that the way the huge data dump about offshore money was obtained doesn't jeopardize their cases.

"It is a bonanza," the official said in reference to the cache of 11 million financial documents about shell companies that a Panamanian law firm set up for some of the world's shadiest and most powerful people. 
"It will keep a lot of agents very busy for a very long time," the official told NBC News. "They will be following the leads and figuring out who is trying to hide stuff illegally, money and also illegal activities."
The official, who is familiar with ongoing discussions about the document trove, said agents from every three-letter agency are lining up to crunch the data to bolster existing cases and build new ones against organized crime syndicates, drug cartels, foreign corrupt and kleptocratic regimes and even suspected Hezbollah terror cells in Latin America and possibly the U.S. That includes the FBI, the IRS and other Treasury agents, the Drug Enforcement Administration (DEA) and the Department of Homeland Security (DHS).
 Do You Have Undeclared Income 
From A Foreign Entity
Formed By Mossack Fonseca ?
 


  

Do You Have Undeclared Accounts
With Any of the Following Foreign Banks?
 
 
 
Want to Know if the OVDP Program is Right for You?

 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
for a FREE Tax Consultation
or Toll Free at 888-8TaxAid (888) 882-9243
 
 
 
 

Read more at: Tax Times blog

Nevada & Wyoming Asked to Provide Information on Entities Linked to the “Panama Papers”

Senate Finance Committee Ranking Member Ron Wyden (D-OR) has asked the Nevada Secretary of State to provide specific information on over 1,000 Nevada business entities that have been linked to the so-called “Panama Papers” scandal. Nevada's law allows it to demand a list of beneficial owners of any entity registered in Nevada and suspected of illegal activities. Senator Wyden has also requested that the Wyoming Secretary of State provide specific information on the 24 Wyoming business entities that are linked to the scandal.

The term “Panama Papers” refers to the 11.5 million documents from Panamanian law firm Mossack Fonseca that were first leaked to German newspaper Sueddeutsche Zeitung and subsequently shared with more than 100 other international news outlets, including ICIJ. The information covers a period over almost 40 years, from 1977 until last December.

Senator Wyden's letters to Nevada and Wyoming. In letters dated May 10, Senator Wyden states that he has become increasingly concerned about the use of anonymous shell companies as vehicles for terrorist financing, tax evasion, and fraud targeting major government programs with the Senate Finance Committee's jurisdiction. To assist in his review of this matter, he has requested specific information from Nevada and Wyoming.

Information requested from the Nevada Secretary of State. In a letter dated May 10, Senator Wyden has requested that the following information be provided by the Nevada Secretary of State by June 3, 2016.

  • (1)  For the over 1,000 Nevada business entities that have been linked to Mossack Fonseca (including its Nevada affiliate), please provide all documents filed with the Secretary of State related to each entity, including, but not limited to, documents related to the articles of organization for each entity and any other documents related to the registration, maintenance, and operation of the entity.
  • (2)  Has the Secretary of State conducted audits of any business entity identified in item (1)? If so, please provide any official documents or correspondences related to any such audit.
  • (3)  How many times has Nevada used the authority under its law to demand a list of beneficial owners of any entity that is registered in Nevada and is suspected of illegal activities in each of the past three years? Has the Secretary of State used this authority to collect beneficial ownership information for any entity identified in item (1)? If so, please provide the beneficial ownership information for each such entity.
  • (4)  Under Nevada law, registration agents who represent 10 or more entities must register with Nevada as a commercial registered agent. How many commercial registered agents are there in Nevada? For each registration agent associated with a business entity in item (1), please provide copies of any documents filed with Nevada related to the operation of the registration agent as a commercial registered agent.
  • (5)  Please describe the process for reviewing and approving the operation of a commercial registration agent in Nevada. Has Nevada conducted any additional audits or oversight of commercial registration agents? If so, how many such audits have been conducted? How many commercial registration agents have found to be in violation of Nevada's licensing requirements? For each registration agent associated with a business entity in item (1), please provide copies of any document related to any audit of the commercial registration agent.
  • (6)  In 2011, the Secretary of State established a joint Corporate Ownership Fraud Task Force in cooperation with IRS to investigate registered Nevada busienss entities that were suspected of being involved in illegal activities, including tax evasion, money laundering, securities violations, and the marketing of shell or shelf companies for fraudulent and/or deceptive purposes. Did the task force identify or investigate any entities associated with Mossack Fonseca or MF Corporate Services? How many businesses were reviewed by the task force? What were the findings of this task force? Did any criminal or civil prosecutions result from the work of the task force? If so, please describe each such prosecution. Did any legislative or regulatory changes occur as a result of the task force's findings? Please provide any form report issued by the task force.

Information requested from the Wyoming Secretary of State. In a letter dated May 10, Senator Wyden has requested that the following information be provided by the Wyoming Secretary of State by June 3, 2016.

  • (1)  For the 24 Wyoming business entities that have been linked to Mossack Fonseca (including its registered agent M.F. Corporate Services), please provide all documents filed with the Secretary of State related to each entity, including, but not limited to, documents related to the articles of organization for each entity and any other documents related to the registration, maintenance, and operation of the entity.
  • (2)  Press reports and your office's press release indicated that in April, the Secretary of State conducted an initial audit of the 24 Wyoming companies linked to Mossack Fonseca. What were the findings of this audit? Please provide any official documents or correspondence related to this audit.
  • (3)  Does the Secretary of State, or any other agency, collect a list of the beneficial owners of entities registered in Wyoming? If so, please provide the beneficial ownership information for each entity identified in item (1).
  • (4)  Please describe the process for reviewing and approving the operation of a commercial registration agent in Wyoming. Does Wyoming conduct any additional audits or oversight of commercial registration agents? If so, how many such audits have been conducted in the past three years? How many registration agents have been found to be in violation of Wyoming licensing requirements?
  • All U.S. Taxpayers with
    "Unreported Income" or
    "Money" in Offshore Accounts
    Need To Come Clean NOW before
    Their Illegal Activity is Identified! 
     
     
     Want to Know which OVDP Program
    is Right for You?

     
    Contact the Tax Lawyers at 
    Marini& Associates, P.A.  
     
    for a FREE Tax Consultation

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

     

Read more at: Tax Times blog

Ex-Credit Suisse Banker/Fugitive Pleads Guilty in Tax Evasion Case

According to the DoJ  a former Credit Suisse AG banker, who has been a fugitive since 2011, pleaded guilty on June 22, 2016 in U.S. District Court in the Eastern District of Virginia to charges related to aiding and assisting U.S. taxpayers in evading their income taxes, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

 
Michele Bergantino, 48, a citizen of Italy and a resident of Switzerland, pleaded guilty before U.S. District Judge Gerald Bruce Lee to conspiring to defraud the United States by assisting U.S. taxpayers to conceal foreign accounts and evade U.S. tax during his employment as a banker working for Credit Suisse AG on its North American desk.
 
“Mr. Bergantino is now the third fugitive to come to the United States and plead guilty to charges in this case,” said Acting Assistant Attorney General Ciraolo. “To those who have actively assisted U.S. taxpayers in using offshore accounts to evade taxes, the message is clear:  staying outside the United States will provide little comfort.  We will investigate and charge you, and will work relentlessly to hold you to account for your actions.”
 
“Hiding assets and creating secret accounts in an attempt to evade income taxes is a losing game,” said U.S. Attorney Boente. “Today’s plea shows that we will continue to prosecute bankers and U.S. citizens who engage in this criminal activity. I want to thank our law enforcement partners and prosecutors for their work on this important case.”
 
Bergantino admitted that from 2002 to 2009, while working as a relationship manager for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. 
 
Bergantino oversaw a portfolio of accounts, largely owned by U.S. taxpayers residing on the West Coast, which grew to approximately $700 million of assets under management.  Bergantino admitted that the tax loss associated with his criminal conduct was more than $1.5 million but less than or equal to $3.5 million.
 
During his time as a relationship manager, Bergantino assisted many U.S. clients in utilizing their Credit Suisse accounts to evade their U.S. income taxes and to facilitate concealment of the U.S clients’ undeclared financial accounts from the U.S. Treasury Department and the Internal Revenue Service (IRS). 
 
Among the steps taken by Bergantino to assist clients in hiding their Swiss accounts were the following: 
 
  • assuring them that Swiss bank secrecy laws would prevent Credit Suisse from disclosing their undeclared accounts to U.S. law enforcement;
  • discussing business with clients only when they traveled to Zurich to meet him;
  • structuring withdrawals from their undeclared accounts by sending multiple checks, each in amounts below $10,000, to clients in the United States;
  • facilitating the withdrawal of large sums of cash by U.S. customers from their Credit Suisse accounts at Credit Suisse offices in the Bahamas, in Switzerland, particularly the Credit Suisse branch at the Zurich airport and at a financial institution in the United Kingdom;
  • holding clients’ mail from delivery to the United States;
  • issuing withdrawal checks from Credit Suisse’s correspondent bank in the United States; and
  • taking actions to remove evidence of a U.S. client’s control over an account because the U.S. client intended to file a false and fraudulent income tax return. 

Moreover, Bergantino understood that a number of his U.S. clients concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.

“Today’s plea of Michele Bergantino is another example of IRS-Criminal Investigation’s (CI) dedication to Bringing Individuals to Justice who engage in helping U.S. Taxpayers Eade their Tax Obligations,” said IRS-CI Chief Richard Weber.  
“We will continue our Global Efforts to Vigorously Pursue both U.S. Taxpayers...and the Unscrupulous Professionals who Facilitate Their actions.
 
For those Hiding Cash or Assets Offshore,
The Time To Come Clean is NOW.”

Bergantino also admitted traveling to the United States approximately one to two times a year to meet with clients, taking careful steps to conceal the purpose of his visits from U.S. law enforcement. 

He used private couriers to send clients’ account statements to the U.S. hotels where he stayed, so that he would not be caught traveling with clients’ statements in his possession. 

In addition, Bergantino obtained “travel” account statements for each client he intended to visit which were devoid of Credit Suisse’s logo and account or customer identification information and used business cards that Credit Suisse provided that contained only his name and office number and did not carry the Credit Suisse name or logo. 

On entering the United States, Bergantino provided misleading information regarding the nature and purpose of his visit to U.S. Customs and Border Protection authorities.

Two of Bergantino’s co-defendants, Andreas Bachmann and Josef Dörig, pleaded guilty to the superseding indictment in 2014 and were sentenced on March 27, 2015.  Credit Suisse pleaded guilty in May 2014 for conspiring to aid and assist taxpayers in filing false returns and was sentenced in November 2014 to pay $2.6 billion in fines and restitution.

Bergantino faces a statutory maximum sentence of 5 years in prison.  He also faces monetary penalties and restitution.
 

“Mr. Bergantino voluntarily surrendered to the authorities,” said his attorney, Thomas Zehnle. “He accepts full responsibility for his past actions. He’s confident that the U.S. justice system will treat him fairly, and he’ll accept the court’s sentence, whatever it is.”

For more on where will the IRS and the DoJ will turn next as they sift through a treasure trove of data gathered from Swiss banks and from more than 50,000 U.S. taxpayers who disclosed their accounts to avoid prosecution, see our posts:

Do You Have Undeclared Income From Foreign Banks?
 

 

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

 
Contact the Tax Lawyers at 
Marini& Associates, P.A.  
 
for a FREE Tax Consultation
or Toll Free at 888-8TaxAid (888) 882-9243

 
 

 
Sources:

DoJ
Bloomberg
AccountingToday

Read more at: Tax Times blog

Brexit – Associated Tax Issues Including Losing U.K. Corporate Tax Breaks Worth Billions!

On June24, 2016, UK citizens have voted to exit the EU (Brexit) and its single market. There can be no doubt that the result of the so-called Brexit referendum will leave a permanent mark on UK and on EU itself. The first short-term negative effects have already presented themselves with the pound dropping to historically low levels and the PM David Cameron announcing his resignation in upcoming months.

As an International Tax Attorney I wonder about the implications of the UK leaving EU will be on the international tax field generally and more specifically how UK taxpayers will have to revise their worldwide international tax plans, as a result of not being able to utilize many of the EU's directives on lack of taxability for funds transferred between countries (dividends, interest, royalties, etc.) and how non-UK taxpayers who have established trust and other structures in the UK, will have to restructure their holdings as a result of this UK exodus from the EU?
 

EU member states decided to exempt one another’s companies from the withholding regimes under the so-called “parent-subsidiary directive,” which is designed to prevent double taxation by different countries on the same earnings. Dividend payments are a way for large companies with operations in multiple countries to transfer profits from subsidiaries back to the parent. Withholding taxes on such payments are as much as 25% in Germany, 30 % in France and 15% in the Netherlands.

While the U.K. has separate tax treaties with some countries that could serve the same purpose as the exemption, it doesn’t have treaties with all EU member states. Furthermore, there are numerous countries where the treaty rate is 5% or higher for withholding taxes, as compared to the existing zero withholding tax rate as a member of the EU.

Losing the withholding exemption may well create a new cost for British corporations that receive dividends from subsidiaries in EU member states. That’s because the U.K. itself generally doesn’t tax corporations on such dividends, meaning a British corporation would have no recourse for seeking domestic tax relief on any new foreign withholding taxes.
  

 
This Brexit will also affect current projects for tackling the tax avoidance schemes of the OECD, like the BEPS project, which will continue to progress as before, with the distinction that the UK will not be bound to implement the goals of the forthcoming EU directive addressing tax avoidance practices commonly used by large companies. (UK - The next Tax Haven?). This will affect the level of the coordination of the European countries in tackling the global tax avoidance schemes.

However, it remains to be seen how the UK decides to implement the BEPS recommendations and if the implementation will follow the direction that the rest of Europe will take. Divergences in the approaches to tackle tax avoidance schemes will provide new opportunities for aggressive tax planning, which could have implications on the success of the whole of BEPS project.

This Brexit may prompt U.K. leaders to accelerate the nation’s trend toward cutting tax rates, now at 20% for corporations and set to decrease to 17% by 2020. In Ireland, an EU member, the corporate rate is 12.5 percent.

Additional rate cuts in Britain could stir other EU nations to retaliate, stirring competition to set the lowest rates as a means of attracting investment or other nations might impose higher tax rates on British companies doing business in the EU.

Have Tax Problems?  

 

 
Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).
 
 

 

 

 
Sources:
 
Bloomberg
 
Forbes

Read more at: Tax Times blog