Fluent in English, Spanish & Italian | 888-882-9243

call us toll free: 888-8TAXAID

Yearly Archives: 2013

The IRS Revokes Amnesty to US Taxpayers With Israeli Bank Accounts…They Must be Feeling Faclept?

March 11, 2013


On Monday, January 14, 2013 we poste The Long Arm of the IRS Reaches Israeli Shores - Oy Vey! which discusses the IRS activity as it relates to US Taxpayers with Secret Israeli Bank Accounts. 

Now we have heard that theInternal Revenue Service this week sent faxes to tax attorneys nationwide informing them that clients who were previously accepted into its criminal amnesty program for those who disclose once-secret offshore accounts, have “upon further review” been disqualified. The faxes, signed by John R. Tafur, director of of Global Financial Crimes at the IRS’ Criminal Investigation division, affect dozens of American taxpayers who had undisclosed accounts at Bank Leumi le-Israel Ltd., Israel’s largest bank.

An IRS spokesman said in a statement: "There are a number of reasons why a taxpayer may be disqualified from participating in the IRS' offshore disclosure program." The spokesman said the IRS cannot comment on specific cases.

Maybe it is because Bank Leumi is believed to be cooperating now with U.S. prosecutors. On Monday March 11, 2013, Bank Leumi announced it will take a charge of 340 million shekels ($91 million) to cover the expense of investigations that are being conducted by the U.S. authorities concerning customers who are U.S. taxpayers.

Some clients of Israel's Mizrahi Tefahot Bank have also been disqualified from the program, as well.

A U.S. crackdown on Americans using offshore banks to avoid taxes began with Swiss banks, but has widened to Israel.

Failing to disclose a foreign account on a 1040 is a criminal offense. In January 2012, the IRS revived the voluntary disclosure program, which remains open which provides that in return for escaping criminal charges, taxpayers accepted into the current version of the OVDP must file eight years of amended tax returns, pay all back taxes, interest and penalties due (including a 20% accuracy penalty on offshore-related underpayments) and pay an FBAR penalty equal, in most cases, to 27.5% of the maximum held in the undisclosed offshore accounts during the eight year period.
If the IRS already has a taxpayer under audit, is investigating a taxpayer, or has his name on a list of taxpayers with secret accounts (for example, one obtained as a result of a John Doe summons to a foreign bank or a tax preparer), he isn’t eligible for the OVDP.
Criminal clearance letters are issued by the IRS’ Criminal Investigation division based on its checks of both criminal and civil proceedings. Many Israeli Bank Clients have already received their criminal clearance letter for the OVDP and are now being informed that they are invalid.

The IRS CI knows exactly what they are doing in rescinding the previously granted clearance. It appears to be part of a larger situation regarding the investigation of Bank Leumi, its representatives, etc. Many of the taxpayers not only gotten written criminal clearance letters as a result of  participating in the OVDP, but had also have proceeded to submit a complete disclosure including amended returns, FBARs, account information, etc.

Ironically, Bank Leumisent a letter to its U.S. account holders last December telling them about the OVDP and suggesting they consult with an attorney about participating in it.  
The IRS’ sudden Bank Leumi flip flop, could have profound consequences for the offshore disclosure program, making those with hidden accounts less willing to come forward.


Have unreported income from an Israeli Bank?
Felling a Bit Faclept?
 
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).



 



Sources: 

Reuters

Forbes

 

Read more at: Tax Times blog

The IRS realeased its Winter 2013 Statistic of Income Bulletin

March 7, 2013

Winter 2013 Statistics of Income Bulletin

IR-2013-26, March 6, 2013

WASHINGTON — The Internal Revenue Service today announced that the winter 2013 issue of the Statistics of Income Bulletin is available at IRS.gov. The winter 2013 issue features preliminary data from more than 145 million individual income tax returns for tax year 2011.

The Statistics of Income (SOI) Division produces the SOI Bulletin on a quarterly basis. Articles included in the publication provide the most recent data available from various tax and information returns filed by U.S. taxpayers. This issue of the SOI Bulletin also includes articles on the following topics:

  • Individual Income Tax Rates and Shares, 2010. Of the 142.9 million individual tax returns filed in tax year 2010, 84.5 million (59.1 percent) were classified as taxable returns or returns with a total income tax greater than $0. Adjusted gross income (AGI) for taxable returns was nearly $7.25 trillion, and total income tax was $952 billion.

  • Individual Noncash Charitable Contributions, 2010. More than 7. million individual taxpayers reported a total of $34.9 billion in deductions for noncash charitable contributions for tax year 2010.
  • Split-Interest Trusts, Filing Year 2011. Charitable remainder trusts, charitable lead trusts, and pooled income funds reported $9.7 billion in gross income and $118.1 billion in end-of-year assets.
  • Domestic Private Foundations and Related Excise Taxes, Tax Year 2009. For tax year 2009, domestic private foundations reported $588.5 billion in total assets and $52.2 billion in total revenue. These foundations distributed $40.9 billion in contributions, gifts, and grants to the charitable sector.

  • Controlled Foreign Corporations, 2008. For tax year 2008, foreign corporations controlled by U.S. multinational corporations held $14.5 trillion in assets and reported receipts of $6.0 trillion.
Don't Want to Become Just Another IRS Tax Statistic?
 
Get IRS Help!

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).

 

 
 

Read more at: Tax Times blog

The Time to Apply for Mexican Tax Amnesty is Quickly Running Out!

March 7, 2013

We first posted on January 23, 2013, 2013 Mexican Tax Amnesty regarding that as of 1 January 2013, Mexico is granting a tax amnesty for federal taxes, certain fees and penalties levied on the failure to fulfill tax obligations (different from payment obligations). The main requirement for the application of the tax amnesty is to pay the remaining portion of the unpaid tax, fee or penalty in one installment. Taxand Mexico takes a look at what the tax amnesty will involve.
 
This amnesty is probably in part motivated by the New Mexican FATCA agreement with the US, which provides for automatic information sharing from US banks regarding deposits from Mexican individuals which we originally posted on November 29, 2012 as Mexican FATCAAgreement Requires New Reporting By BOTH Mexican & US Banks! 
According to PwC the Deadline to apply for Mexican tax amnesty program is approaching.

The Mexican Revenue Administration Service (SAT) has published the rules for the country's new tax amnesty program, which began on January 1, 2013. Taxpayers should note that:

  • they may request amnesty on up to 100% of outstanding tax and additions to tax (accessories)incurred for open years up to December 31, 2012
  • amnesty requests must be made by May 31, 2013
  • the amount of tax forgiven will not constitute taxable income for Mexican income tax purposes.

Because the deadline for applying to the new tax amnesty program is just over three months away, taxpayers should immediately assess the tax and legal effects of participating in the program.
 

Past Due Mexican Taxes Keeping You Awake at Night?
 
New US - Mexican Facta Information Causing you to Rethink Not Reporting Your Taxes Correctly in Mexico May Not Have Been Such a Good Idea?

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).


 

Read more at: Tax Times blog

More Payroll Audit Relief as IRS Expands Voluntary Worker Classification Settlement Program!

March 4, 2013

The Internal Revenue Service has expanded its Voluntary Classification Settlement Program (VCSP), paving the way for more taxpayers to take advantage of this low-cost option for achieving certainty under the law by reclassifying their workers as employees for future tax periods.

The IRS is modifying several eligibility requirements, thus making it possible for many more interested employers, especially larger ones, to apply for this program. Thus far, nearly 1,000 employers have applied for the VCSP, which provides partial relief from federal payroll taxes for eligible employers who are treating their workers or a class or group of workers as independent contractors or other nonemployees and now want to treat them as employees. Businesses, tax-exempt organizations and government entities may qualify.

Under the revamped program, employers under IRS audit, other than an employment tax audit, can qualify for the VCSP. Furthermore, employers accepted into the program will no longer be subject to a special six-year statute of limitations, rather than the usual three years that normally applies to payroll taxes. These and other permanent modifications to the program are described in Announcement 2012-45 and in questions and answers, posted on IRS.gov.

Normally, employers are barred from the VCSP if they failed to file required Forms 1099 with respect to workers they are seeking to reclassify for the past three years. However, for the next few months, until June 30, 2013, the IRS is waiving this eligibility requirement. Details on this temporary change are in Announcement 2012-46.

To be eligible for the VCSP, an employer must currently be treating the workers as nonemployees; consistently have treated the workers in the past as nonemployees, including having filed any required Forms 1099; and not currently be under audit on payroll tax issues by the IRS. In addition, the employer cannot currently be under audit by the Department of Labor or a state agency concerning the classification of these workers or contesting the classification of the workers in court.
Interested employers can apply for the program by filing Form 8952, Application for Voluntary Classification Settlement Program, at least 60 days before they want to begin treating the workers as employees.

Employers accepted into the program will generally pay an amount effectively equaling just over one percent of the wages paid to the reclassified workers for the past year.

No interest or penalties will be due, and the employers will not be audited on payroll taxes related to these workers for prior years.

Employers applying for the temporary relief program available for those who failed to file Forms 1099 will pay a slightly higher amount, plus some penalties, and will need to file any unfiled Forms 1099 for the workers they are seeking to reclassify.

 
Employee Characterization of your Independent  Contractors Keeping You Awake at Night?
 

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:
 

 

Read more at: Tax Times blog

Live Help