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Monthly Archives: December 2016

A Holiday Summons A Tale of Grinches, Princes, Bankers, Toymakers and Offshore Tax Evasion

Pocedurally Taxing  recently posted regarding Dave Breen's, the acting Director of Villanova’s Low Income Taxpayer Clinic, view regarding the case of Greenfield v US; a recent IRS setback in a summons enforcement case out of the Second Circuit.

Dave's take on this recent case is that taxpayers and some practitioners may believe that the era of IRS investigating offshore tax evasion has run its course.  He thinks this case does just the opposite.

The Court’s decision demonstrates that much of IRS’s data on offshore tax evasion is dated, possibly even too old to be of any value, but he also suspect that IRS has come to the same conclusion. 

Rather than moving on to other areas of non-compliance though, he suspects that the IRS at this moment is developing more tools to secure the next wave of current information on offshore tax evasion.  This does not bode well for taxpayers who so far have avoided IRS’s inquiry into their offshore holdings. To Read More...

 Do You Have Undeclared Income from an Offshore Bank? 
Want to Know if the OVDP Program is Right for You?

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

Read more at: Tax Times blog

Treasury Releases Their Report On The IRS Whistleblower Program

A majority of claim closures in FYs 2015 and 2016 (83 and 85 percent, respectively) are rejected or denied before going to an operating division field group for an investigation or examination, with only a small portion (2 percent each year) resulting in an award. Most claims were rejected because the allegations were not specific enough for the IRS to take action or denied because the allegation was below the threshold to justify resources for compliance action 

About 85% of the submissions that the IRS Whistleblower Office receives are pro se filings, and the problem is that often those claims are speculative or are not developed enough for the IRS to use them as a basis for taking action. 

Of the remaining 15% on which the IRS does take action and passes the whistleblower’s information to the field agents for examination, approximately 2 out of every 15 are getting an award.


Figure 4: Closure Reasons for Claims Closed in FYs 2015 and 2016 (*as of February 2016) Closure Reason
Number of Claims
FY 2015
FY 2016*12
Before Field Group
8,801 (83%)
11,045 (85%)
Rejected: Ineligible Whistleblower
Rejected: Incomplete Submission
Rejected: Allegations Unclear/Nonspecific
Denied: Below Threshold
Denied: Short Statute
Denied: Statute Expired
Denied: Lack of Resources
Denied: Information Already Known
Denied: Not Selected for Field
After Field Group
345 (3%)
675 (5%)
Denied: Tax Noncompliance Not Found
Denied: No Collected Proceeds
Award Paid
204 (2%)
322 (2%)
1,265 (12%)
942 (7%)
Error Creating Claim
Specific Reason Not Listed Above13

 Whistleblower’s odds of getting an award can be significantly higher than 13% for a thoroughly vetted submission with good facts and good law that are clearly laid out.  The hurdle of getting the IRS to take action in the first place is certainly a high one but then you have to deliver your information in a way that helps them win their case. 

TIGTA made a total of 10 recommendations to improve the whistleblower program, nine of which IRS management agreed to.


Want a Reward of Between 15- 30% 

of Underpaid IRS Tax Liabilities for
Blowing the Whistle on a Tax Cheat?



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



Read more at: Tax Times blog

IRS Wins Summons Challenge From Virtual Currency Exchanger Coinbase Inc.

According to Law 360 a California federal court Thursday authorized a John Doe summons by the IRS to obtain information from virtual currency exchanger Coinbase Inc. so it can investigate whether the company’s customers avoided paying taxes on transactions made through the company.

San Francisco-based Coinbase itself has not been accused by the IRS of engaging in nefarious activity, but the agency believes records of transactions made via the company’s currency exchange business could reveal the identities of individuals who have failed to pay taxes on transactions made via encrypted digital currencies between 2013 and 2015.

“Transactions in virtual currency are taxable just like those in any other property,” said IRS Commissioner John Koskinen in a statement. “The John Doe summons is a step designed to help the IRS ensure people doing business in the emerging economy are following the tax laws and meeting their responsibilities.”

Unlike traditional cash or banking transactions, exchanges made via cryptocurrencies like bitcoin are anonymous and free of third-party reporting.

According to the IRS’s petition for the John Doe summons, the agency has identified at least one individual and two corporations that held Coinbase accounts and used bitcoin transactions to conceal taxable activities including repatriation of untaxed offshore assets.

The IRS also notes that because exchange rates of virtual currency against traditional currencies are fluid, gains made through the purchase or sale of cryptocurrency are taxable under U.S. law.

The summons will allow the IRS to gain access to Coinbase’s database of customers in order to establish whether those customers have paid their tax liabilities.

In granting the summons U.S. District Judge Jacqueline Scott Corley found there is a reasonable basis for the government to believe virtual currency users may not be in compliance with federal tax laws.

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


Read more at: Tax Times blog

Panama Papers – Global Effects Thus Far & Continuing Impact

On April 4, 2016 we posted Huge Leak From the Panamanian Law Firm Mossack Fonseca! where we discuss that the offshore planning world was set on fire with the news that 11 million documents were leaked from the Panamanian law firm Mossack Fonseca.
They show how Mossack Fonseca has helped clients launder money, dodge sanctions and evade tax. The company says it has operated beyond reproach for 40 years and has never been charged with criminal wrong-doing.

Gerard Ryle, director of the ICIJ, said at the time, that the documents covered the day-to-day business at Mossack Fonseca over the past 40 years.

While no reference was initially made regarding U.S. clients; we correctly speculated that U.S. persons will probably show up, given that Mossack Fonseca apparently maintained a branch in Las Vegas, Nevada, under the name of M.F. Company Services and Mossack Fonseca Company Services was currently attempting to fight a subpoena brought in the U.S. District Court for the District of Nevada seeking information on at least 123 companies that it created.

Fast-forward 8 months later and the investigation has produced an almost daily drumbeat of regulatory moves, follow-up stories and calls by politicians and activists for more action to combat offshore financial secrecy and ICIJ recently posted Panama Papers Have Had Historic Global Effects — and the Impacts Keep Coming where they cover the following repercussions:                 
  • At least 150 inquiries, audits or investigations into Panama Papers revelations have been announced in 79 countries around the world
  • An estimated $135 billion was wiped off the value of nearly 400 companies after the Panama Papers
  • Governments are investigating more than 6,500 taxpayers and companies, and have recouped at least $110 million so far in unpaid taxes or asset seizures
  • Nine Mossack Fonseca offices have shuttered around the world, and the law firm has been fined close to half a million dollars 
Our Blog "The Tax Times" lists the following as fallout from the Mossack Fonseca a/k/a "Panama Papers" leak:
Do You Have Undeclared Income 
From A Foreign Company
Formed By Mossack Fonseca ?

 Want to Know if the OVDP Program is Right for You?

Contact the Tax Lawyers at 
Marini& Associates, P.A.  
for a FREE Tax Consultation

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




Read more at: Tax Times blog