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IRS Issues John Doe Summons To Director of “Sovereign” a Panamanian Law Firm

The US Internal Revenue Service (IRS) has obtained a 'John Doe summons' against the director of a Panamanian company claimed by the IRS to have helped American taxpayers to set up anonymous offshore accounts.

The summons demands all records of Sovereign Management & Legal's clients (SML). The phrase 'John Doe' indicates that the US authorities do not know the clients' identities, but the summons applies to them irrespectively of that fact.

According to the US Department of Justice (DoJ), the company issued clients with prepaid debit cards called 'Sovereign Gold Cards' that enabled them to access the funds in the offshore accounts 'in such a manner as to evade their obligations under internal revenue laws'.

The accounts were opened by SML in the names of corporations that were owned by other entities such as fake charitable foundations, and held in the name of nominee officers provided by SML.

US District Court Judge Brian Morris found that there is a reasonable basis for believing that US taxpayers may be using Sovereign Gold Cards to violate federal tax laws.


“The Department of Justice and the IRS Are Committed to Stopping the Use of Foreign Bank Accounts to Evade
US Tax Laws,”

said Acting Assistant Attorney General David A. Hubbert, head of the Justice Department’s Tax Division.
“The Time to Come Forward and Come into Compliance Is Running Short, and Those Who Continue to Violate US Tax and Reporting Laws Will Pay a Heavy Price!”

Thus far, the U.S. District Court has granted the IRS the authority to serve eight different “John Doe” summons on several foreign financial institutions. These institutions are tied to a Panamanian entity that had been issuing debit cards to individuals who the IRS believes may have been using the accounts to evade their U.S. tax obligations. As a result of the summons, the IRS used data-mining methods to obtain additional information on such accounts. 
These John Doe Summons may constitutes a public disclosure event that may prevent a taxpayer from entering an amnesty program such as the Offshore Voluntary Disclosure Program (OVDP) and the taxpayer will be subject to a 50% miscellaneous offshore penalty (instead of 27.5%).

Taxpayers that have issues related to these transactions should immediately seek the guidance of a tax advisor with significant experience in US international tax issues and voluntary disclosure practices. 
The utilization of the OVDP or the Streamlined Filing Compliance Procedures is the first line of defense against substantial civil penalties and criminal prosecution.

 Do You Have An Un-Reported Foreign Account? 

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

IRS Adopts New Offer in Compromise Policy

On February 28, 2017, we posted How To Get The IRS To Accept Your Offer In Compromise? where we discussed:

  1. Do you owe a substantial amount of taxes to the IRS?
    If so, you've likely looked into establishing a payment plan.
  2. What if you are simply unable to pay your tax balance? 
    In this case, you might consider requesting an offer in compromise, which is a last-resort option that allows you to settle your account for literally pennies on the dollar.
  3. A Definition of Reasonable Collection Potential
    A reasonable collection potential refers to the maximum amount that the IRS believes it can collect from you over time. Generally, the agency uses a simple formula to calculate this amount, which you can easily figure on your own.
  4. How to Calculate Your Reasonable Collection Potential
    Reasonable collection potential includes two factors: the liquidation value of your assets and your extra monthly income over the next four or five years. 
  5. Downside to Submitting an OIC
Completing the forms is just the beginning. The IRS will ask you for rafts of financial documentation: pay stubs, bank records, vehicle registrations, and myriad other items. This is an exhaustive, time-consuming process. Some taxpayers wind up submitting boxloads of documents to the IRS to support their OIC request.
Now the IRS has just updated its policy covering Offer in Compromise‎ applications: Applications will now be returned without consideration in instances where the taxpayer has not filed all required tax returns.
In such cases, the application fee will be returned and any required initial payment submitted with the Offer will be applied to outstanding tax debt. This update is reflected on the Offer in Compromise page on and the newly updated Offer in Compromise Booklet (Form 656-B) available March 27.

Have Tax Problems?
 Want to Know if you Qualify for an Offer?
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).


Read more at: Tax Times blog

Trump's Budget Is Trouble For the IRS

On December 14, 2016 we posted Trump's Anti-Union Drumbeat Could Be Trouble for the IRS  where we discussed that IRS employees could be in for a rocky ride if President-elect Donald Trump and Congress move forward with sweeping pledges to rein in federal employee benefits and cripple unions.

Now President Trump's America First, A Budget Blueprint to Make America Great Again cuts $239 million in IRS funding.
President Trump has released his 53-page “America First, A Budget Blueprint to Make America Great Again” a wish list of spending requests for Congress and some basic economic projections in which he lays out his plans for boosting military spending, and cutting foreign aid and an array of domestic programs. Among those cuts is a funding reduction of $239 million for IRS.


The President's 2018 Budget requests $12.1 billion in discretionary resources for the Department of the Treasury's domestic programs, a $519 million (or 4.1%) decrease from the 2017 annualized Continuing Resolution (CR) level. This program level excludes mandatory spending changes involving the Treasury Forfeiture Fund.

It promises to shrink the Federal workforce and increase its efficiency by redirecting resources away from duplicative policy offices to staff that manage the country's finances. Further, the Budget states that it will empower the Treasury Secretary, as Chairperson of the Financial Stability Oversight Council, to end taxpayer bailouts and foster economic growth by advancing financial regulatory reforms that promote market discipline and ensure the accountability of financial regulators.

IRS funding. The President's 2018 Treasury budget includes a $239 million funding reduction from the 2017 annualized CR level for IRS. It asserts that diverting resources from antiquated operations that are still reliant on paper-based review in the era of electronic tax filing would achieve significant savings.

The 2018 Budget “preserves key operations of the Internal Revenue Service (IRS) to ensure that the IRS could continue to combat identity theft, prevent fraud, and reduce the deficit through the effective enforcement and administration of tax laws.”


 Have a Tax Problem? 
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

California Businessman Sentenced to 24 Months For Hiding > $23.5 MM Offshore!

A Los Angeles, California businessman was sentenced to 24 months in prison today for hiding more than $23.5 million in offshore bank accounts and evading more than $8.3 Million in Federal Taxes over seven years.


According to court documents, Masud Sarshar, a U.S. citizen, maintained several undeclared bank accounts at Bank Leumi and two other Israeli banks, both in his name and in the names of entities that he created.
Sarshar owned and operated Apparel Limited Inc., a business that designed, manufactured and sold clothing and other apparel.
For decades, with the assistance of at least two relationship managers from Bank Leumi and a second Israeli bank (Israeli Bank A), Sarshar hid tens of millions of dollars in assets in these accounts in an effort to conceal income and obstruct the Internal Revenue Service (IRS).
Between 2006 and 2009, Sarshar diverted more than $21 million in untaxed gross business income to those undeclared accounts and earned more than $2.5 million in interest income from the funds.
Sarshar reported none of this income on his 2006 through 2012 individual and corporate tax returns. He also filed false Reports of Foreign Bank and Financial Accounts, commonly known as FBARs, with the U.S. Department of Treasury on which he omitted his ownership and control of these offshore accounts.
Sarshar’s relationship managers at Israeli Bank A (RM1) and Bank Leumi (RM2) visited him frequently in Los Angeles. At Sarshar’s request, neither bank sent him his account statements by mail. Instead, RM1 and RM2 provided Sarshar with his account information in person. RM2 concealed Sarshar’s account statements on a USB drive hidden in a necklace that she wore when she visited Sarshar in the United States.
Sarshar’s meetings with RM1 sometimes occurred in Sarshar’s car. RM1 and RM2 used their visits to offer Sarshar other bank products, including “back-to-back” loans. Through back-to-back loans, which Bank Leumi made to Sarshar through its branch in the United States and which Sarshar collateralized with funds from his account at Israeli Bank A, Sarshar was able to bring back to the United States approximately $19 million of his assets without creating a paper trail or otherwise disclosing the existence of the offshore accounts to U.S. authorities.
At the direction of RM1 and RM2, Sarshar also obtained Israeli and Iranian passports in an effort to avoid being flagged as a U.S. citizen by the banks’ compliance departments. The banks still flagged Sarshar as a U.S. citizen after Sarshar received these two passports, so RM1 and RM2 advised him to transfer his remaining funds from Israeli Bank A to Israeli Bank B, which Sarshar did in late 2011.
In addition, with the help of someone identified as Individual 1, Sarshar transferred approximately $5.8 million from his Bank Leumi accounts to an account at Hong Kong Bank A, which Individual 1 then helped transfer to Sarshar in the United States, disguising it as a loan to Apparel Limited.
In addition to the term of prison imposed, Sarshar was ordered to:
  • Serve three years of supervised release and
  • To pay more than $8.3 million in restitution to the IRS, plus interest and penalties. 
  •  Sarshar also agreed to pay an FBAR penalty of more than $18.2 million for failing to report his Israeli bank accounts.

 Do You Have An Un-Reported Foreign Account? 

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