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Yearly Archives: 2011

OVDI Ends Today – The Going Gets Tougher!

September 9, 2011

Read more at: Tax Times blog

More Tax Problems for U.S. Citizens with Foreign Bank Accounts in Israel

September 8, 2011

On August 28, 2011, the Supervisor of Banks at the Bank of Israel and the supervisory authorities in the US––the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation––signed a Statement of Cooperation. The Governor of the Bank of Israel, Prof. Stanley Fischer, confirmed the signing of the document.

The signing of the Statement of Cooperation is intended to formalize and strengthen the cooperation between the Banking Supervision in Israel and the supervisory authorities in the US, in order to facilitate the process of supervising banks incorporated in both countries for purposes of cross-border activity, and to promote the safe and sound functioning of those banks. The Statement of Cooperation also reflects the commitment of the above mentioned authorities to the principles of consolidated supervision and cooperation among banking regulators.

 The Statement of Cooperation establishes a mechanism for the transfer of information between the authorities in the context of the authorization process of establishing cross-border banking activity in the US or Israel, and in the context of their ongoing function as regulators of banking activity.

 The Statement of Corporation also regularizes the cooperation in supervisory processes carried out by each of the authorities, including those related to planned inspections of cross-border establishments, the identification of suspected money-laundering activity or the financing of terrorism, and banking activity without a permit. The Statement of Cooperation also deals with the sharing of information about banks in Israel and the US under common ownership or control.

The Supervisor of Banks, David Zaken: "The arrangements set out in the Statement of Cooperation are expected to boost cooperation with the US authorities with regard to the supervision of Israeli overseas banking offices operating in the US and the overseas offices of US banks operating in Israel."

The announcement didn't specifically mention FBAR or foreign bank accounts, however, it appears that this will be just one more avenue for the Internal Revenue Service to pursue in locating U.S. citizens who have unreported bank accounts in Israel. According to the press release the Statement of Cooperation establishes a mechanism for the transfer of information between the authorities in the context of the authorization process of establishing cross-border banking activity in the US or Israel, and in the context of their ongoing function as regulators of banking activity.

When added to the ongoing grand jury investigations of Israeli banks, and the implementation of FATCA in 2013 it demonstrates the danger of continued non-reporting of foreign bank accounts-especially for dual Israeli citizens.

Read more at: Tax Times blog

Swiss Banks Seek Negotiated Tax Settlement Amid Reports of U.S. ‘Ultimatum' on Details

September 7, 2011

Swiss banks are urging their government and the United States to reach a negotiated solution to their dispute over U.S. funds hidden away in Swiss banks, amid reports the U.S. Department of Justice has issued an “ultimatum” on the handover of information on undeclared accounts of U.S. taxpayers with Swiss banks.

According to Swiss media, over the weekend of Sept. 3, U.S. Deputy Attorney General James Cole wrote a letter Aug. 31 to the Swiss government insisting that Swiss authorities hand over information on hidden U.S. funds in the country by Sept. 6. The letter specifically targeted Credit Suisse, the country’s second largest bank, as well as nine other private and regional banks, according to the reports.

Swiss media also that the Swiss financial industry regulator, was collecting information from the banks on all deposits by U.S. taxpayers of $50,000 or more between 2002 and July 2010.

Now that the implementation of FATCA has been postponed to the middle or end of 2013, the DOJ is reverting back to the process of requesting/summonsing information from other Swiss Banks; similar to its 2009 program which they successfully used against UBS; where the Swiss government was forced to eventually hand over detailed information on the accounts of U.S. taxpayers with the country’s largest bank.

Read more at: Tax Times blog

IRS Releases Final Form 706 for Estate Tax Application in 2010

September 7, 2011

The Internal Revenue Service Sept. 3 released a final 2010 Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, to be filed for decedents who died in 2010.

Form 706 is one of two that will be used by estates choosing between the modified carryover basis regime and the estate tax for property transferred from a decedent in 2010. The instructions for the form have not yet been released.

Form 706 is available at http://www.irs.gov/pub/irs-pdf/f706.pdf.

Read more at: Tax Times blog

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