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Yearly Archives: 2013

Cyprus Rejects Bank Tax

March 19, 2013

Cyprus overwhelmingly rejected a proposed levy on bank deposits as a condition for a European bailout on Tuesday, throwing international efforts to rescue the latest casualty of the euro zone debt crisis into disarray.

The vote in the tiny legislature was a stunning setback for the 17-nation currency bloc, angering European partners and raising fears the crisis could spread; lawmakers in Greece,Portugal, Ireland, Spain and Italy have all accepted austerity measures over the last three years to secure European aid.

With hundreds of demonstrators outside the parliament, the ruling party abstained and 36 other lawmakers voted unanimously to reject the bill, bringing the Mediterranean island, one of the smallest European states, to the brink of financial meltdown.


Finance Minister Michael Sarris had already headed to Moscow, amid speculation Russiacould offer assistance given the high level of Russian deposits in Cypriot banks.

EU countries had warned they would withhold 10 billion euros ($13 billion) in bailout loans unless depositors in Cyprus, including small savers, shared the cost of the rescue, an unprecedented step in the stubborn debt crisis.

But lawmakers said the levy on deposits crossed a red line.

International market reaction has been muted so far but that might change.

Banks in Cyprus are to remain shut on Wednesday to avoid a bank run. The island's stock exchange will also be closed on Wednesday.
 
Cypriot WorldWide Tax Structures Seem "Greek" to You?

Contact the Tax Lawyers at
Marini & Associates, P.A.

for a FREE Tax Consultation at: www.TaxAid.usor www.TaxLaw.ms or
Toll Free at 888-8TaxAid (888 882-9243).
 
 
 
Source:

NICOSIAReuters

 

Read more at: Tax Times blog

Professional Golfer Sergio Garcia “Whiffs” Tax Case regarding US Tax on “Image Rights”

March 19, 2013

The US Tax Court has ordered professional golfer Sergio Garcia to pay tax on endorsement income he had claimed was tax-free under the US-Switzerland tax treaty.

The court decided Garcia's contract with his sponsor TaylorMade had attributed too much of the money to royalty payments for image rights, which the treaty exempts from US tax.

 
Garcia entered into a seven-year endorsement agreement with sponsor TaylorMade Golf Co. (TaylorMade), allowing TaylorMade to use his image, name, and voice - "image rights" in advertising and marketing campaigns worldwide.

Garcia also agreed to perform personal services for TaylorMade including using its products in all his golf play, posing and acting for advertisements, and making personal appearances for the company.
In return for his services and use of his image rights, TaylorMade agreed to pay Garcia a base compensation of $7 million during the years at issue.

The original endorsement didn't specify the percentage of remuneration attributable to personal services or "image rights."

In a later amended agreement provide for 85% of the compensation to be allocated to royalties for his "image rights" and 15% to personal services.

Garcia paid no U.S. tax on the royalty payments and paid lower tax rates under Swiss law. He did, however, pay U.S. tax on the U.S.-source personal service payments, of which he reported a portion on Forms 1040-NR.

IRS challenged the 85%-15% allocation between royalty and personal service payments, claiming that the royalty portion was overstated and issued Notice of Deficiencies in the amount of $930,249 and $789,518 for tax years 2003 and 2004, respectively.

The court held that:

1. Compensation paid by TaylorMade under the endorsement agreement is allocated 65%to Royalties and 35% to Personal Services.

2. None of the Royaltycompensation is taxable to petitioner in the United States, but

3. All of the U.S. source Personal Service compensation is taxable to petitioner in the United States based on his failure to timely raise the issue of whether the golfer's U.S.-source personal service income was exempt from U.S. tax.

Don't Want Your Tax Planning to be a "Duffer"?

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Marini & Associates, P.A.
 
 

for a FREE Tax Consultation at: www.TaxAid.usor www.TaxLaw.msor

Toll Free at 888-8TaxAid (888 882-9243).

Sources:

Sergio Garcia, (2013) 140 TC No. 6

Bloomberg

Forbes

 

Read more at: Tax Times blog

Criminal Tax Investigations On The Rise!

March 13, 2013

Here we are in March and as many CPA's can tell you it is Tax Time.  That is right Tax Time. The time of year, when the vast majority of taxpayers are about to file their tax returns. 
It is also the same time of year that the IRS likes to announce the names and details of taxpayers (or more likely Non-Taxpayers), who were recently Criminally Prosecuted by the Goverment for not paying their taxes.  Coincidentally, there also is a noticeable uptick in criminal indictments and in convictions for tax crimes at this time of year.

On Wednesday, March 28,2012 we posted that the "IRS Releases FY 2011 Data Book." This data book, in addition to providing various other interesting information about the IRS, also contains a report of the IRS' Criminal Prosecutions for the 2011 & 2010.

The Data Book reported that in 2011: these

  • The IRS initiated 4,720 criminal investigations.
  • There were 3,410 referrals for prosecution
  • There were 2,350 convictions.
  • Of those sentenced, 81.7% were incarcerated (a term that includes imprisonment, home confinement, electronic monitoring, or a combination thereof).

By way of comparison, in FY 2010:

  •  the IRS initiated 4,706 criminal investigations
  • there were 3,034 referrals for prosecution, and
  • there were 2,184 convictions.
  • Of those sentenced, 81.5% were incarcerated.

More than 80% of criminal tax fraud cases resulted in jail time in 2012, which shows judges are willing to hand out stiffer penalties than probation.

So as you sit down to figure your taxes for 2012 and somehow you are thinking of underreporting your income or not filing at all, ask your self:

Do You Feel Lucky Punk?

 

Have Criminal Tax Problems? 　

Contact the Tax Lawyers at 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).

Read more at: Tax Times blog

US Court Orders Wegelin a Total Penalty of $74.3 MM!

March 11, 2013

 
A U.S. court on March 4, 2013 sentenced Wegelin & Co, the oldest Swiss private bank, to pay an additional $58 million after it admitted to helping wealthy Americans evade taxes. 

The amount was in addition to the $16.3 million in forfeitures already obtained by authorities after the federal government accused Wegelin of conspiring to assist U.S. taxpayers hide $1.2 billion in secret Swiss bank accounts; bring it’s total combinedPenalty to $74.3 million. 
The case marked the first time U.S. authorities had indicted a foreign bank and subsequently obtained a guilty plea and sentence for facilitating tax evasion. 
 
The government previously obtained a $780 million settlement with UBS AG in 2009, and tax probes continue of other Swiss banks including Credit Suisse Group AG and Julius Baer.

Wegelin, which according to the indictment had $25 billion in assets at the end of 2010, said at the time of its guilty plea in January said it would close.

The Swiss Financial Market Supervisory Authority required Wegelin to reserve 100 million Swiss francs ($107 million) to resolve the U.S. investigation, in order for them to approve its sale of assets.
 
 

Secret Foreign Investments Keeping You Awake at Night?

Want to get right with the IRS?
Contact the Tax Lawyers at 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).

 

Source:
 
Reuters

Read more at: Tax Times blog

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