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Yearly Archives: 2011

Swiss Upper House Approves U.S.-Swiss Double Taxation Treaty

December 14, 2011

The Swiss parliament’s upper house gave its approval to proposed amendments to a new U.S.-Swiss double taxation treaty that would make it easier for U.S. authorities to seek information on secret bank accounts held by U.S. taxpayers with Swiss banks.
The Council of States, the Swiss equivalent of the U.S. Senate, approved the amendments by a large majority, with 27 representatives voting in favor and five against. The vote clears the way for a final decision on the amendments in the National Council, the parliament’s lower house. The 200 members of the National Council are due to vote on the matter Dec. 21.
The treaty is designed to replace a 1996 treaty. Both provide for judicial assistance in cases of tax fraud, but the new treaty defines the framework for this more precisely and admits tax evasion as well as fraud, in some cases, as grounds for a request for assistance. Under previous agreements, Switzerland limited cross-border cooperation to cases of suspected tax fraud.

Read more at: Tax Times blog

IRS Will Not Acquiesce on Tax Court's Fraud Finding in ‘Norris'

December 13, 2011

The Internal Revenue Service announced in Action on Decision 2011-05 that it will not acquiesce on a U.S. Tax Court finding that, after weighing each of the 11 badges of fraud equally, the service did not establish taxpayers' intent to fraudulently evade taxes.

In Norris v. Commissioner, T.C. Memo. 2011-161, the Tax Court found that the service was only able to prove four badges of fraud in regard to William and Sharon Norris's failure to pay taxes on the income from illegal gambling machines in their convenience store in 1996.

William pleaded guilty to tax evasion for 1998, and IRS issued a notice of deficiency claiming the pair failed to report income for 1996 and 1998. While the Tax Court found the couple was collaterally estopped from claiming they intended to evade taxes for 1998, it said the service failed to prove they intended to evade the 1996 taxes, as well.

Read more at: Tax Times blog

Estate Taxes – As Filing Deadline Approaches it Create Challenges for Form 8939.

December 12, 2011

Executors filing the Internal Revenue Service's Form 8939 to elect into the modified carryover basis regime for people who died in 2010 must file the form as completely as possible, keeping in mind that amendments are limited.

You've got one chance to get this thing right and you have a do-over within six months, but you've got to file something by Jan. 17, 2012.

No protective election is permitted and no extension of time is permitted.

Form 8939 allows executors to opt out of the estate tax for 2010 decedents and into a carryover basis regime in which executors can allocate a basis increase of $1.3 million to assets passing to any person, and an additional $3 million to assets passing to a surviving spouse.

Read more at: Tax Times blog

Whistleblower Can Remain Anonymous During Litigation

December 9, 2011

The U.S. Tax Court, in an issue of first impression, said Dec. 8 that a whistleblower can remain anonymous in court proceedings prosecuting a whistleblower claim in order to protect the former executive's privacy concerns while serving as a confidential informant (Whistleblower 14106-10W v. Commissioner, T.C., No.14106-10W, 137 T.C. No. 15, 12/8/11).

Judge Michael Thornton said “Petitioner's request to seal the record or alternatively to proceed anonymously presents novel issues of balancing the public's interests in open court proceedings against petitioner's privacy interests as a confidential informant.”

Although the court granted summary judgment for the Internal Revenue Service on whether the whistleblower was entitled to an award, Thornton concluded that granting the request for anonymity struck a reasonable balance between the petitioner's privacy interests as a confidential informant and the relevant social interests.

The parties were ordered to redact information that would tend to reveal the petitioner's identity as the case progresses through appeals and additional litigation.

Read more at: Tax Times blog

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