Monthly Archives: August 2016

With the implementation of FATCA and the ongoing efforts of the IRS and the Department of Justice to ensure compliance by those with U.S. tax obligations have raised awareness of U.S. tax and information reporting obligations with respect to non-U.S. investments.

This judgment must take into account all facts and circumstances, including all items of evidence, whether in the form of banking or tax-related documentation, third-party statements, or the taxpayer’s own statements.

Because the circumstances of taxpayers with non-U.S. investments vary widely, the IRS offers the following 4 options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those investments:

1. Voluntary Disclosure
2. Streamlined Disclosure - Non-Resident Taxpayer and Resident U.S. Taxpayer
3. Delinquent FBAR Submissions Procedures
4. Delinquent International Information Return Submissions Procedures

There are also 5 other options that some taxpayers may consider, which are not as advantageous as the 4 discussed above:

1. Filing a Noisy Disclosure
2. Filing a Quiet Disclosure
3. Prospective Compliance
4. Do Nothing
5. Expatriation

Every taxpayer's case is different, and a number of issues often arise in each case. One such issue is how many years the taxpayer must correct. In many cases, practitioners recommend going back six years, as that is the statute of limitations for criminal tax prosecutions in the US. In other cases, for a variety of reasons, a taxpayer may correct filings for fewer years.

Don't bury your head in the sand hoping your tax problems will go away! Take action NOW while you still have options!

It would behoove taxpayers worldwide, to review their tax-related structures, accounts and holdings, to ascertain whether it would make sense to consider a voluntary disclosure. This is especially the case for valued company management who may have undeclared assets in tax haven countries and for families and individuals about secret accounts or offshore business structures, which may be perceived as abusive.

More fallout from the "Panama Papers" a/k/a leaked documents from the Panamanian law firm Mossack Fonseca.

We previously posted on June 25, 2016 Federal Agents & Prosecutors Gearing Up to Utilize "Panama Papers" in Their Prosecutions where we discussed that Federal agents and prosecutors are "chomping at the bit" to exploit the Panama Papers and launch prosecutions, a senior federal law enforcement official told NBC News, but want to be sure that the way the huge data dump about offshore money was obtained doesn't jeopardize their cases.

Now Financial Services Superintendent Maria T. Vullo announced  on 8/19/16 that Mega International Commercial Bank of Taiwan will pay a $180 million penalty and install an independent monitor for violating New York’s anti-money laundering laws.  

The fine is part of a consent order entered into with the Department of Financial Services (DFS) pursuant to which Mega Bank shall take immediate steps to correct violations, including engaging an independent monitor to address serious deficiencies within the bank’s compliance program and implement effective anti-money laundering controls.  Mega Bank is a major international financial institution with approximately $103 billion in assets, including $9 billion at its New York branch.

Violations of anti-money laundering requirements at Mega Bank were uncovered in a recent DFS examination, which found that the bank’s head office was indifferent toward risks associated with transactions involving Panama, recognized as a high-risk jurisdiction for money-laundering. Mega Bank has a branch in Panama City and another in Panama’s Colon Free Trade Zone.  DFS’s investigation identified a number of suspicious transactions running between Mega Bank’s New York and Panama Branches. 

The investigation also determined that a substantial number of customer entities, which have or had accounts at several other Mega Bank branches, were apparently formed with the assistance of the Mossack Fonseca law firm in Panama.  Mossack Fonseca is one of the law firms at the center of the formation of shell company activity, possibly designed to skirt banking and tax laws worldwide, including U.S. laws designed to fight money laundering.

Sources:
Mondo Visione

New York State Department of Finance (PDF file)

On September 30, 2015, we posted Judge Denies Injunctive Relief for FATCA Implementation!, where we discussed that an Ohio federal judge said that Senator Rand Paul, R-Ky., and others do not have standing in a challenge to the offshore financial account tax enforcement measures enacted in the Foreign Account Tax Compliance Act and they were not likely to succeed on the merits in the case. The case is Crawford v. U.S. Dep't of Treasury, S.D. Ohio, No. 3:15-cv-00250, 9/29/15.

The 5 countries are:

1. Argentina;
2. Curacao;
3. Georgia;
4. Korea; and
5. Uruguay.

First automatic exchanges of information will start in 2017-2018 on 2016 information.

Have an International Tax Problem?  
 

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

 for a FREE Tax Consultation Contact US at

www.TaxAid.com or www.TaxLaw.ms

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