Yearly Archives: 2016

So here I am just another 59-year-old tax attorney who is sure that technology has it out for him, sitting in my office trying to get a few more cases moving forward while I wait for the Labor Day weekend, and I'm trying to fax to (267) 941-1115 a preclearance for yet another client who wants to enter the OVDP program.　

Naturally, I'm waiting for my E-Fax confirmation that this request for preclearance has gone through to the IRS and today I received not 1 but 2 messages that my E-Fax, that I rely on for communicating with the IRS, was not able to deliver either of my faxed requests.

So I called the (267) 941-1115 fax number, only to get a busy signal? 

Naturally I pick up the phone to contact the IRS-CI OVDP Hotline at (267) 941-1607 only to find out, from a recording, that I'm not as technologically challenged as I feel that I am, and that IRS CI has changed its phone and fax numbers for voluntary disclosures.

The phone number is now 267-466-1607 and the fax number is now (267) 466–1115.　

I've included these revised numbers in our revised FAQ #23 below: 

23.

How do I request preclearance before I submit my offshore voluntary disclosure?

For the OVDP, the preclearance process is as follows: 1.     Taxpayers or representatives send a facsimile to the IRS – Criminal Investigation Lead Development Center (LDC) with: (a) Applicant identifying information including complete names, dates of birth (if applicable), tax identification numbers, addresses, and telephone numbers. (b) Identifying information of all financial institutions at which undisclosed OVDP assets (see FAQ 35) were held. Identifying information for financial institutions includes complete names (including all DBAs and pseudonyms), addresses, and telephone numbers. (c) Identifying information of all foreign and domestic entities (e.g., corporations, partnerships, limited liability companies, trusts, foundations) through which the undisclosed OVDP assets (see FAQ 35) were held by the taxpayer seeking to participate in the OVDP; this does not include any entities traded on a public stock exchange. Information must be provided for both current and dissolved entities. Identifying information for entities includes complete names (including all DBAs and pseudonyms), employer identification numbers (if applicable), addresses, and the jurisdiction in which the entities were organized. (d) Executed power of attorney forms (if represented). The LDC fax number to request preclearance before making an offshore voluntary disclosure is (267) 466-1115. In the case of jointly filed returns, if each spouse intends to apply for OVDP, each spouse should request preclearance. The LDC fax number to request preclearance before making an offshore voluntary disclosure is (267) 466-1115. In the case of jointly filed returns, if each spouse intends to apply for OVDP, each spouse should request preclearance. 2.     Criminal Investigation will notify taxpayers or their representatives via fax whether or not they are eligible to make an offshore voluntary disclosure. It may take up to 30 days for Criminal Investigation to notify taxpayers or their representatives of the decision. Preclearance does not guarantee a taxpayer acceptance into the OVDP.  Taxpayers pre-cleared for OVDP must follow the steps outlined below (FAQ 24) within 45 days from receipt of the fax notification to make an offshore voluntary disclosure.      Taxpayers must truthfully, timely, and completely comply with all provisions of the OVDP.     Taxpayers or representatives with questions regarding preclearance may call the IRS-CI OVDP Hotline at (267) 466-1607. For all other offshore voluntary disclosure questions call the IRS OVDP Hotline at (267) 941-0020.

 

The Internal Revenue Service today warned tax professionals of a new wave of attacks that allow identity thieves to file fraudulent tax returns by remotely taking over practitioners’ computers.

As part of the Security Summit effort, the IRS urged tax professionals to review their tax preparation software settings and immediately enact all security measures, especially those settings that require usernames and passwords to access the products.  The IRS is aware of approximately two dozen cases where tax professionals have been victimized in recent days.

The IRS, state tax agencies and the tax industry – working as partners in the Security Summit – recently launched the Protect Your Clients; Protect Yourself campaign to increase awareness that criminals increasingly are targeting tax professionals and the taxpayer data they possess. 

"This latest incident reinforces the need for all tax professionals to review their computer settings as soon as possible," said IRS Commissioner John Koskinen‎. "Identity thieves continue to evolve and look for new areas to exploit‎, especially as our fraud filters become more effective. The prompt identification of these attacks is another example of the great benefits that result from the close‎ working relationship the IRS now has with the tax industry and the states through the Security Summit initiative. Information is flowing more rapidly between our groups as we continue‎ our efforts to protect taxpayers."

These attacks come as the Oct. 17 deadline approaches for extension filers. The IRS first warned of a similar remote take-over attack in the spring, just ahead of the April 15 deadline, another peak period for tax professionals.

Thieves are able to access tax professionals’ computers and use remote technology to take control, accessing client data and completing and e-filing tax returns but directing refunds to criminals’ own accounts.

Victims in the tax community learned of these thefts while reconciling e-file acknowledgements.

In addition to activating security measures for tax software products, IRS urges all tax preparers to take the following steps:

• Run a security “deep scan” to search for viruses and malware;
• Strengthen passwords for both computer access and software access; make sure your password is a minimum of eight digits (more is better) with a mix of numbers, letters and special characters and change them often;
• Be alert for phishing scams: do not click on links or open attachments from unknown senders;
• Educate all staff members about the dangers of phishing scams in the form of emails, texts and calls;
• Review any software that your employees use to remotely access your network and/or your IT support vendor uses to remotely troubleshoot technical problems and support your systems. Remote access software is a potential target for bad actors to gain entry and take control of a machine.

In addition, the IRS recently issued instructions to tax professionals on how to monitor their PTIN activity.

Tax professionals should review Publication 4557, Safeguarding Taxpayer Data, a Guide for Your Business, which provides a checklist to help safeguard taxpayer information and enhance office security. Also, practitioners should review Data Breach Information for Tax Professionals for information on what action they should take if they do become victims.

 

 

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)