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Monthly Archives: September 2013

Cayman Banks to Disclose US Taxpayer's Information to the IRS!

We originally posted on August 26, 2013, Caymans Makes It Tougher for Wealthy to Hide Money! Were we discussed that the Cayman Islands, known as a haven for wealthy Americans seeking to stash cash overseas without scrutiny from the U.S. government, is about to become less secret.

United States’ taxpayers are required to report offshore financial holdings. This includes bank accounts, certificates of deposit, offshore brokerage accounts and even some life insurance products. Reporting is done annually on a Report of Foreign Bank and Financial Accounts, more commonly known as an FBAR form. (Depending on how those assets are held, there may be a host of other forms required as well.)
While some people think of secret numbered Swiss bank accounts when thinking about offshore finances, many Americans have accounts, hedge fund holdings and insurance products in the Cayman Islands.
Coming directly on the heels of the IRS’ agreement with Switzerland to access Swiss bank records, the United States and the Cayman Islands have reached a similar accord. The Caymans becomes one of the newest countries to sign on to the Foreign Account Tax Compliance Act (FACTA). Congress passed FATCA in 2010 to require foreign banks and financial institutions to provide information about accounts with ties to the United States.
Quickly, the traditional bank secrecy jurisdictions such as the Cayman Islands are becoming more transparent. At the same time, the IRS is getting much better at ferreting out unreported foreign accounts.
In lieu of individual banks and other financial firms directly reporting to the IRS, the Cayman government negotiated to be the collector of information. They will then provide the information to the IRS.
The automatic reporting provisions of FATCA and the agreement with the Cayman Islands begins next year. Banks will be required to do a look back to catch anyone who simply elected to close their account or transfer their money in anticipation of the new law.
Do you have an Unreported Account in
the Cayman Islands or Elsewhere?
 Contact the Tax Lawyers at 

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

Read more at: Tax Times blog

2 New FATCA FAQ's Posted on IRS Website.

We originally posted on Friday, July 19, 2013, IRS Launches New FATCA Web Page. Now 2 new FATCA frequently asked questions (FAQs) documents have been posted on IRS.gov.

  1. The first set of FAQs  is focused on FATCA registration system questions.  
  2. The second set of FAQs deal with FATCA issues involving qualified intermediaries and, separately, address issues involving registration and IGAs.
The FATCA web page now contains:

FATCA Registration System – Overview
Registration System Resource Materials
General System Questions
FATCA Account Creation and Access
Registration Status and Account Notifications
Expanded Affiliated Groups (EAG)
Registration Updates
Global Intermediary Identification Number (GIIN) – Overview
GIIN Format

Need FATCA Help?

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

Read more at: Tax Times blog

TIGTA – Shows That IRS Violated the Restrictions on Directly Contacting Taxpayers 11.5% of the Time!

A review of the IRS Office of Appeals, which resolves disputes between the agency and taxpayers, found officials did not always follow proper procedures when dealing with taxpayers or their legally designated representatives.

A review of a statistical sample of 96 of 72,239 cases closed by Appeals between October 1, 2011 and September 30, 2012, showed that Appeals personnel are generally involving the power of attorneys in case activities. 
However, the documentation in case activity records in the ACDS (Appeals Centralized Database System) and in the physical case files that we were able to obtain did not always show that Appeals personnel adhered to procedures that help ensure compliance with the direct contact provisions of the I.R.C. and that taxpayers obtain appropriate and effective representation. 
Specifically, we identified the following conditions in 11 of the 96 cases reviewed.
  • In 2 cases, Appeals personnel attempted to contact the taxpayer directly by telephone instead of contacting the representative designated on the power of attorney in the ACDS or Integrated Data Retrieval System.  There was no evidence indicating the power of attorney was delaying the process or that Appeals personnel contacted their manager for approval to contact the taxpayer as required by direct contact provisions of the I.R.C.
  • In 9 cases, there was no evidence that copies of taxpayer correspondence were sent to the power of attorney identified on the ACDS or Integrated Data Retrieval System.   For 6 of the 9 cases, this occurred as part of the initial contact.  IRS policy requires that all original     correspondence be sent to the taxpayer and a copy sent to the taxpayer’s authorized representative, unless the taxpayer has indicated otherwise on Form 2848.
o      For 6 of the 9 cases, this occurred as part of the initial contact.  IRS policy requires that all original correspondence be sent to the taxpayer and a copy sent to the taxpayer’s authorized representative, unless the taxpayer has indicated otherwise on Form 2848.

 For of the 9 cases, neither the documentation in the hard copy case files nor the case activity records in the ACDS showed that copies of the taxpayer correspondence were mailed to the power of attorneys.

o      For 5 of the 9 cases, Appeals personnel did not document in the ACDS case history narratives whether copies of taxpayer correspondence were sent to the power of attorneys.  Although we were unable to obtain the hard copy case files for these cases, Appeals guidelines require that all key actions be documented in the ACDS. 
When the sample results are projected to the population, we estimate that the deviations may have Negatively Affected 8,277 Taxpayers.
Moreover, the deviations also leave the IRS vulnerable to a greater risk of taxpayers seeking to recover monetary damages from the IRS if they believe its personnel are intentionally disregarding the direct contact provisions of the I.R.C.

We tell our clients that if IRS contacts them directly, even after we have filed our Power of Attorney, they should be polite and advise them that they are represented by Marini & Associates, P.A and then give them our phone number and ... Say Nothing Else!

IRS Troubling You?

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 begin_of_the_skype_highlighting 888 882-




Read more at: Tax Times blog

US-Swiss Agreement Puts Swiss Banks and US Non FBAR Filers at great risk!

US Persons Who Previously Held
Secret Swiss Accounts
Are Running a Serious Risk
Unless They Make a Voluntary Disclosure ASAP!

On August 29, 2013 we posted Swiss Banks Agree to Plan to End Past US Tax Evasion Issues!  where we discussed that the Swiss banks were ready to pay hefty fines for sheltering United States tax fugitives under the terms of a new deal given the green light by the Swiss government. t reflects the long-standing desire of the US to end the decades-long practice of Swiss banks, supported by their government, of providing safe haven for US tax evaders through a wall of secrecy and a “don’t ask, don’t tell” policy.

Now the details of this agreement are coming to light. The US-Swiss agreement takes the form of a plea agreement as signified by its name, “Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks.” It was signed for the United States by the US Department of Justice, not by the US Treasury Department, implying that US scrutiny of Swiss banks has progressed from tax matters to prosecution concerns.

Under this penalty framework, banks must pay :

  • 20 per cent of the maximum aggregate value of all undeclared US accounts that existed on 1 August 2008,

  • 30 per cent of the maximum aggregate value of the accounts opened between 1 August 2008 and 28 February 2009, and

  • 50 per cent of the maximum aggregate value of accounts opened after 28 February 2009.
The new US-Swiss agreement will also require disclosure, to the United States, of the US financial institutions, US persons and the intermediaries who guided the US persons, who where connected with “US Related Accounts” that were maintain by the Swiss Banks.

This exposes the institutions and persons to possible prosecution for Conspiracy to Commit US Tax Evasion and, for the individuals, Failure to File the Foreign Bank Account Report.

There is a major probability that the US persons who have or had accounts at Swiss banks were not all just tax evaders, but who also are or were hiding the proceeds of crimes committed in the United States, such as public corruption, fraud, money laundering and others.

These persons now have a higher probability of being prosecuted for these crimes and of having their Swiss money be the subject of asset recovery efforts by the US government or private sector victims.

In any case, all US persons who are Swiss account holders will have to answer to the IRS, which has a wide array of tools to determine the source and destination of funds.

In a statement announcing the agreement, Deputy Attorney General, James M. Cole said...

“Now is the time for all US taxpayers who hid behind Swiss bank secrecy laws or have undeclared offshore accounts in other… countries to come forward and resolve their outstanding tax issues with the United States.”


The US Can Use Swiss Data for Enforcement Actions! The new agreement makes clear that “personal data provided by the Swiss banks… will be used and disclosed only for purposes of law enforcement (which may include regulatory action) in the United States or as otherwise permitted by US law.”

The agreement marks four avenues by which three categories of Swiss banks may find their way to softer treatment by the US. One category of Swiss banks, Category 1, is told the door to laxer US treatment is closed because they are under US criminal investigation. The US Justice Department has said 14 banks now fall in Category 1.

The four categories of banks and their treatment are as follows:

  • Category 1 Bank: Any Swiss bank under criminal investigation by the US Justice Department as of August 29, 2013. This type of bank is not eligible to participate in the program.
  • Category 2 Bank: Any Swiss bank that has “reason to believe” it may have committed tax or “monetary transaction offenses” under the US Code, but against which the US Department of Justice has not commenced a “formal criminal investigation.” This type of bank may request a Non-Prosecution Agreement (NPA).
  • Category 3 Bank: Any Swiss bank that has not committed any tax or monetary transaction offenses under the US Code. This type of bank may request a “Non-Target Letter” from the US Department of Justice.
  • Category 4 Bank: Any Swiss bank that is considered a “Deemed Compliant Financial Institution” as a “Financial Institution with Local Client Base” under FATCA, meaning a local Swiss bank. This type of bank may request a “Non-Target Letter” from the US Department of Justice.

A Category 2 bank must “fully” disclose to the Justice Department how it ran its “cross-border business for US accounts,” how it was “structured, operated, and supervised,” the names of the persons who ran the business, how it “attracted and service account holders,” and all US accounts and their “maximum dollar value” at certain key dates.

The bank must also make an “in-person presentation and documentation” providing full details of its operations in English. It must also disclose the US accounts that were closed, their holdings
,and identify the “US person or entity affiliated… with each account,” including their “beneficial interest.”

The bank must promise to cooperate in treaty requests by the US for information on the US accounts.
The banks must also tell the US “the name and function of any relationship manager, client advisor, asset manager, financial advisor, trustee, fiduciary, nominee, attorney, accountant, or other individual or entity known to be affiliated with (the accounts).”

It must also provide “information on the transfer of funds into and out of the account on a monthly basis,” including cash deposits or withdrawals; if an intermediary, such as a financial adviser, attorney, accountant or others, facilitated transfers; the identity and location of financial institutions that transferred or received funds from the account, and the countries “to or from which funds were transferred.”

The Swiss banks must keep for 10 years pertinent records “relating to their US cross-border business” and, if requested, provide witnesses and information for US treaty requests for other information and documents.

The banks must close the accounts of “recalcitrant account holders,” as defined by IRS regulations and prevent employees from “assisting recalcitrant account holders.”

The banks must pay penalties of 20% of the “maximum aggregate dollar value” of all US Related Accounts they held on August 1, 2008, which was, generally, when the UBS US tax evasion conspiracy was exposed.

Meanwhile, FATCA, the other international dragnet from the United States approaches implementation on June 1, 2014.

Bank Secrecy and Tax Secrecy Havens May Not Disappear Quietly, But Signs of Their Demise Are Unmistakable!

Do You Have A Un-Reported Swiss Bank Account? 

Contact the Tax Litigation Lawyers of

Marini & Associates, P.A.
for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms
or Toll Free at 888-8TaxAid (888 882-9243). 


Association of Certified Financial Crime Specialists


Read more at: Tax Times blog

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