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

call us toll free: 888-8TAXAID

Monthly Archives: September 2018

Attorney Allegedly Conspired to Repatriate More Than $18 Million in Untaxed Money Held in Foreign Accounts

According to the DoJ a federal grand jury sitting in Houston, Texas returned an indictment on September 20, 2018 charging a Houston attorney with one count of conspiracy to defraud the United States and three counts of tax evasion.

According to the indictment, Jack Stephen Pursley, also known as Steve Pursley, conspired with another individual to repatriate more than $18 million in untaxed earnings from the co-conspirator’s business bank account located in the Isle of Man.  Knowing that his co-conspirator had never paid taxes on these funds, Pursley allegedly designed and implemented a scheme whereby the untaxed funds were made to appear to be stock purchases in United States corporations owned and controlled by Pursley and his co-conspirator.

If convicted, Pursley faces a statutory maximum sentence of five years in prison for the conspiracy count, and five years in prison for each count of tax evasion.  He also faces a period of supervised release, monetary penalties, and restitution.

An indictment merely alleges that a crime has been committed. A defendant is presumed innocent until proven guilty beyond a reasonable doubt.

  • The indictment alleges that Pursley received more than $4.8 million and an ownership interest in the co-conspirator’s ongoing business for his role in the fraudulent scheme. 
  • The indictment further alleges that for tax years 2009 and 2010 Pursley evaded the assessment of and failed to pay the incomes taxes due on this money by, amongst other means, withdrawing the funds as purported non-taxable loans or returns of capital.  
  • Pursley allegedly used the money he received to purchase personal assets, including a vacation home in Vail, Colorado and property in Houston.  
 
Do You Have a Criminal Tax Problem?
 

 
Contact the Tax Lawyers of

Marini & Associates, P.A.    
 
for a FREE Tax Consultation contact us at:
www.TaxAid.com or www.OVDPLaw.com or
Toll Free at 888-8TaxAid (888) 882-9243

 

Read more at: Tax Times blog

Treasury Considering Eliminating Obama-Era Debt-Equity Documentation Rules

October 6, 2017 we posted Treasury to Currently Eliminate 8 Tax Regulations Including Discounting Restrictions on Family Business Transfers where we discussed that the U.S. Department of the Treasury  posted on October 4, 2017 that it would amend or completely do away with 8 tax regulations issued under the Obama administration, including rules regarding corporate debt and transfers of estates, as part of an effort to simplify the tax code.

Treasury also announced that it continues to work to identify additional regulations for modification or repeal by evaluating significant regulations issued recently and initiating a comprehensive review of all regulations.

 
Now according to Law360, the U.S. Department of the Treasury on September 21, 2018 proposed scrapping documentation requirements established under Obama-era regulations to discourage corporate inversions by re-characterizing debt as equity.

The regulations, under Section 385 of the Internal Revenue Code, were intended to prevent an accounting maneuver called “earnings stripping” that shifts profits to low-tax jurisdictions, and they established documentation requirements for purported debt obligations among related parties to be treated as debt for federal tax purposes.


Following a review initiated by President Donald Trump, the Section 385 documentation rules were among eight Treasury regulations identified in July 2017 as either imposing an undue financial burden on U.S. taxpayers or adding undue complexity to federal tax laws. After reviewing comments from the public, Treasury has now concluded that the documentation requirements should be repealed but added it may propose streamlined documentation rules in the future.

“The Treasury Department and the IRS will continue to study the issues addressed by the documentation regulations," the regulations said. "When that study is complete, the Treasury Department and the IRS may propose a modified version of the documentation regulations.”

Experience Tax Advice...
 
 
Now Even More Valuable! 

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

 

 

 

Read more at: Tax Times blog

Preview of New Tax Transcript Starting on 9/23!

August 23, 2018 we posted  IRS to Introduce New Tax Transcript as of 9/23/18! where we discussed that in August 22, 2018, the IRS announced in IR-2018-171 that it is moving to better protect taxpayer data, in a new format for individual tax transcripts that will redact personally identifiable information from the Form 1040 series. On September 19, 2018 the IRS  released IRS Fact Sheet 2018-16 (FS-2018-16) describing the changes in the transcript starting onSept. 23, 2018 and that the new transcript format will become the default transcript and describes the data that it will display. 

 
On Sept. 23, 2018, a new transcript will become the default transcript issued by IRS through all available platforms, including online, toll-free and the Transcript Delivery System (TDS) used by tax professionals. The new transcript format is for individual transcripts only, not business transcripts.
The new transcript format will display the following data:

  • . . . Last 4 digits of any Social Security Number (SSN) listed on the transcript: XXX-XX-1234
  • . . . Last 4 digits of any Employer Identification Number (EIN) listed on the transcript: XX-XXX-1234
  • . . . Last 4 digits of any account or telephone number
  • . . . First 4 characters of the last name for any individual
  • . . . First 4 characters of a business name
  • . . . First 6 characters of the street address, including spaces
  • . . . All money amounts, including balance due, interest and penalties

IRS noted that tax transcripts are used for many non-tax purposes, such as income verification for loans or college financial aid, and the new format will still have enough financial information available to meet these needs.

The fact sheet noted that financial entries on all redacted transcripts continue to be fully visible. Tax practitioners preparing prior-year tax returns for clients have several additional options to obtain the wages, income and taxes paid for non-filing individuals, including:

  • . . . obtaining Form W-2 and income documents from the client;
  • . . . asking the client to access Get Transcript Online to immediately download and print a redacted wage and income transcript;
  • . . . asking the client to request a mailed transcript via Get Transcript by Mail or call toll-free assistance to have a transcript mailed to the address of record (mailed transcripts are delivered within five to 10 business days);
  • . . . accessing e-Services Transcript Delivery Service for tax professionals for immediate access to a redacted transcript if there is proper authorization; and
  • . . . asking toll-free assistance to mail a redacted transcript to the client’s address of record.

If necessary for return preparation, a client may also order a complete (not redacted) wage and income transcript through IRS.


Also starting on Sept. 23, 2018, IRS will introduce a revised Form 4506-T and Form 4506T-EZ, Request for Transcript, to include a new field—line 5b—for a Customer File Number. The Customer File Number is created by the requester, not IRS. This is an optional field for the requester (e.g., a lender or college) to use as an identifier because the SSN will no longer be fully visible. Requesters have the option of creating and entering an identifying number that is displayed on the transcript. The field is unique to the requester and will not be searchable by IRS.

The requester will assign a 10-digit number, for example, a loan account number, enter it on line 5b of the Form 4506T or Form 4506T/EZ. The Customer File Number assigned by the requester will populate on the transcript, enabling the requester to match the transcript to the taxpayer. Requesters may use any 10-digit number except the taxpayer’s SSN.

Tax professionals requesting transcripts through TDS may also assign a Customer File Number to the transcript beginning on Sept. 23, 2018. This is an optional field for the requester to use as an identifier because the SSN will no longer be fully visible. TDS users will have the option of creating and entering an identifying number that is displayed on the transcript. The field is unique to the requester and will not be searchable by IRS.

The requester will enter a 10-digit number (any 10-digit number except the taxpayer's SSN) in the Customer File Number field on TDS. The Customer File Number assigned by the requester will populate on the transcript, enabling the requester to match the transcript to the taxpayer.

Starting in mid January 2019, taxpayers also may assign a 10-digit number to their transcript that they obtain through Get Transcript Online or Get Transcript by Mail. In these instances, the Customer File Number field will assist those taxpayers who require a transcript for income verification purposes, such as a loan application or college financial aid.

Distribution of transcripts to fax numbers or third-party addresses poses a threat to taxpayer data and poses a risk that sensitive information will result in fraudulent tax refunds. The timeframes below have not yet been finalized.

Sometime around January 2019, IRS plans to stop faxing transcripts to both taxpayers and to third parties. This change applies to both individual and business taxpayers. At that time, when taxpayers or third parties call IRS with an individual or business transcript request, the transcript will be mailed to the taxpayer’s address of record.

Starting around May 2019, IRS will stop mailing transcripts to third parties listed on Line 5a of the Form 4506-T and T-EZ. This field will be eliminated from the form. Transcript requests made on the Form 4506-T and T-EZ will be mailed to the taxpayer’s address of record, not to third parties. 
Alternatives for obtaining tax transcript by tax professionals and third parties. Tax professionals have alternatives to obtain a tax transcript. Attorneys, Certified Public Accountants (CPAs) or enrolled agents (EAs) may register for IRS e-Services tools to obtain access to TDS without being an Electronic Return Originator (ERO).

E-Services users must create an account, protected by a two-factor authentication process, to verify their identities. Tax preparers who are neither an attorney, CPA nor EA must either be part of an ERO’s file or become an Authorized IRS e-File Provider and file tax returns to access the TDS.
IRS advised that third parties who routinely use the Form 4506-T or T-EZ to obtain tax transcripts for income verification purposes consider contracting with a participant in the Income Verification Express Service (IVES) or become an IVES participant.

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





 

Read more at: Tax Times blog

First FATCA Violation Conviction With Bank Executive's Plea Deal

The former head business officer and CEO of offshore Loyal Bank Ltd. admitted to setting up multiple opaque bank accounts for a purported stock fraudster in order to evade detection by U.S. authorities in violation of the Foreign Account Tax Compliance Act, the first conviction of its kind. 
 
Adrian Baron 63, who was extradited from Hungary to face charges in New York, pled to one count of conspiring to defraud the U.S. Dressed in jail fatigues, Baron admitted to directing others at Loyal Bank to set up bank accounts for an individual identified in court papers as an undercover law enforcement agent, who posed as a U.S. fraudster involved in multiple stock manipulation schemes on the hunt for corporate bank accounts he could control but that couldn’t be traced back to him.
 
According to the DoJ, a grand jury in Brooklyn has returned a five-count superseding indictment charging

The Defendants:
PANAYIOTIS KYRIACOU, also known as “Peter Kyriacou” Age: 26, Residence: London, England
ARVINSIGH CANAYE, also known as “Vinesh Canaye” Age: 30, Residence: Mauritius
ADRIAN BARON Age: 63, Residence: Budapest, Hungary
LINDA BULLOCK Age: 57, Residence: St. Vincent/Grenadines

 
with conspiracies to defraud the United States by obstructing the functions of the Internal Revenue Service in its administration of the Foreign Account Tax Compliance Act (“FATCA”).   
 
FATCA is a federal law that requires foreign financial institutions to identify their U.S. customers and report information (“FATCA Information”) about financial accounts held by U.S. taxpayers either directly or through a foreign entity.  FATCA’s primary aim is to prevent U.S. taxpayers from using foreign accounts to facilitate the commission of federal tax offenses.
 

Last month, a grand jury in Brooklyn charged Kyriacou, Canaye, Baron, Bullock, and others with conspiracy to commit securities fraud and money laundering conspiracy.

 "As Alleged in the Superseding Indictment, Kyriacou, Canaye, Baron, and Bullock Agreed to Defraud the United States by Opening Foreign Bank and Brokerage Accounts without Collecting FATCA Information to Report to the IRS,"
 
Stated United States Atty. Donoghue.

 

"The Charges Announced Today Reflect the Commitment of This Office and Our Law Enforcement Partners to Combat Tax Evasion by Identifying Fraudulent Offshore Safe Havens That Facilitate Hiding Financial Assets from the IRS and to Prosecute Those Individuals Who Violate US Tax Laws."

 


The Beaufort Scheme         
As alleged in the superseding indictment, between August 2016 and February 2018, Kyriacou, an investment manager at Beaufort Securities, and Canaye, a general manager at Beaufort Management, together with others, conspired to defraud the United States by failing to comply with FATCA. 

Specifically, in the fall of 2016, an Undercover Agent contacted Kyriacou and stated that he was a U.S. citizen interested in opening brokerage accounts at Beaufort Securities from which he could execute trades in several multi-million dollar stock manipulation deals.  In furtherance of the stock manipulation scheme, Kyriacou and Beaufort Securities opened six brokerage accounts for the Undercover Agent.  Notwithstanding that a U.S. citizen would be the beneficial owner of each of the accounts, at no time did Kyriacou or Beaufort Securities request FATCA Information from the Undercover Agent.

In July 2017, Kyriacou introduced the Undercover Agent to Canaye and advised that Canaye could assist with the Undercover Agent’s schemes.  After meeting with the Undercover Agent and discussing the stock manipulation scheme, in January 2018, Canaye and Beaufort Management opened six global business corporations for the Undercover Agent.  The Undercover Agent’s name did not appear on any of the account opening documents. 

The Loyal Scheme                          
In June 2017, the Undercover Agent met with Baron, Loyal Bank’s Chief Business Officer.  During the meeting, the Undercover Agent explained that he was a U.S. citizen and was involved in stock manipulation schemes.  The Undercover Agent further explained that he was interested in opening multiple corporate bank accounts at Loyal Bank.  In July 2017, the Undercover Agent met with Baron and Bullock, Loyal Bank’s Chief Executive Officer.  During the meeting, the Undercover Agent described how his stock manipulation deals operated, including the need to circumvent the IRS’s reporting requirements under FATCA.  In July and August 2017, Loyal Bank opened multiple bank accounts for the Undercover Agent.  At no time did Loyal Bank request or collect FATCA Information from the Undercover Agent.

The charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty. However for  Adrian Baron who Pled Guilty, he is due to be sentenced on December 10, 2018.

Do You Have a Criminal Tax Problem?
 

 
Contact the Tax Lawyers of

Marini & Associates, P.A.    
 
for a FREE Tax Consultation contact us at:
www.TaxAid.com or www.OVDPLaw.com or
Toll Free at 888-8TaxAid (888) 882-9243

 

 

Read more at: Tax Times blog