The Internal Revenue Service is asking for public comment on information collection tools relating to the Offshore Voluntary Disclosure Program, according to a notice in the July 18 Federal Register

The BVI government has published proposals for a Central Registry of Company Beneficial Ownership.

Individuals with more than 25 per cent of a company's equity or who otherwise have control of the company will have to be identified on the register at Companies House.

The proposals also include abolition of bearer shares and yet another review of the law on pre-pack administrations.

This is in part following the measures to help improve corporate transparency and strengthen director disqualification laws; which have been outlined in the publication of a discussion paper by the Business Secretary Vince Cable. The main elements of the ‘transparency’ section of the paper include:

1. options for the implementation of a central registry information on of companies’ beneficial ownership maintained by Companies House, following on from the Prime Minister’s G8 commitment. The registry would hold information on individuals with more than 25 per cent of shares or voting rights in a company, or who otherwise control the way a company is run. Key questions include whether information in the registry should be made public, what information is to be provided and how it is to be updated.
2. the abolition of bearer shares given the potential for misuse – these allow the true owner of these to remain hidden as their name is not disclosed on a company’s register of members
3. whether nominee directors should be required to disclose their status to Companies House and who they are acting for and whether directors should be banned from signing away their responsibilities as directors. While nominees can be used in legitimate commercial scenarios, it can also mean the true owners of a company are hidden
4. the abolition of corporate directors – a situation where a company is director. Although rarely used, these can result in complex corporate ownership structures which hide the beneficial owner’s true identity

Lately, a bunch of my clients have been getting letter 4087 from the IRS from the streamlined program. The letters are saying my clients did not submit signed tax returns, or signed FBAR forms or the signed questionnaire. I know that in all cases where my clients are getting these letters, all the requested documents were properly submitted to the IRS. I put together each package and made sure that all documents were included in the package.

Another thing I noticed on this is that in each case where a client got the letter 4087, there was an ITIN application for a family member, be it a spouse or a child. In all my streamlined cases, over 75% of cases where the client applied for ITIN numbers for a family member, they received a letter 4087 saying that returns or FBARS were missing. In over 75% of cases where there was no ITIN application, the returns were assessed and the case resolved in a fairly quick manner.

How have others been dealing with this situation and does anyone have a similar results from the streamlined processes?

 

Drs. David Leon Fredrick and Patricia Lynn Hough, of Englewood, Fla., were indicted by a federal
grand jury in Fort Myers, Fla., for conspiring to defraud the Internal Revenue Service (IRS) by concealing millions of dollars in assets and income in offshore bank accounts at UBS and other foreign banks, the Department of Justice and IRS announced today.

According to the indictment, Fredrick and Hough, married doctors, served on the Board of Directors of two Caribbean-based medical schools – one located on Saba, Netherlands Antilles, and one located on Nevis, West Indies. Fredrick had an ownership interest in the medical school on Nevis until 2007, when both medical schools were sold.

The indictment alleges that Fredrick and Hough conspired with each other and with Beda Singenberger, a citizen and resident of Switzerland who is under indictment in the Southern District of New York, and a UBS banker to defraud the IRS. They carried out the conspiracy by creating and using nominee entities and undeclared bank accounts in their names and the names of the nominee entities at UBS and other foreign banks to conceal assets and income from the IRS, including the sale of real estate associated with the medical school on Saba and shares they owned in the medical school on Nevis. The real estate was sold for more than $33 million, all of which was deposited into one of their undeclared accounts in the name of a nominee entity.

It is further alleged in the indictment that Fredrick and Hough used emails, telephone and in-person meetings to instruct Swiss bankers and asset managers to make investments and transfer funds from their undeclared accounts at UBS. It is alleged that Fredrick and Hough caused funds from the medical schools' undeclared accounts to be transferred to undeclared accounts in their individual names or in the names of nominee entities. Fredrick and Hough then used the funds in their undeclared accounts to purchase an airplane, two homes in North Carolina and a condominium in Sarasota, Fla. Fredrick also transferred more than $1 million to his relatives.

Fredrick and Hough were also charged with four counts of filing false tax returns for 2005, 2006, 2007 and 2008. The indictment alleges that Fredrick and Hough filed false tax returns which substantially understated their total income and failed, on Schedule B, Parts I and III, to report that they had an interest in or signature or other authority over bank, securities or other financial accounts located in foreign countries. U. S. citizens, resident aliens and legal permanent residents of the United States have an obligation to report to the IRS on the Schedule B of a U.S. Individual Income Tax Return, Form 1040, whether they had a financial interest in, or signature authority over, a financial account in a foreign country in a particular year by checking "Yes" or "No" in the appropriate box and identifying the country where the account was maintained. U. S. citizens and residents also have an obligation to report all income earned from foreign bank accounts on their tax returns.
A trial date has not been scheduled. An indictment is merely an accusation, and every defendant is presumed innocent unless and until proven guilty.

The conspiracy charge carries a maximum potential penalty of five years in prison and a $250,000 fine. The false return charges each carry a maximum potential penalty of three years in prison and a $250,000 fine.

DOJ