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Monthly Archives: October 2018

IRS Issues Prop Regs Reducing Income for US Corps That Own Stock in Foreign Corps

The Internal Revenue Service today issued proposed regulations reducing the amount determined under Internal Revenue Code section 956 for certain domestic corporations that own (or are treated as owning) stock in controlled foreign corporations (CFCs). 

The Tax Cuts and Jobs Act (TCJA), passed in December 2017, made major changes to the tax law, including enacting a participation exemption system for the taxation of certain foreign income. The new proposed regulations are intended to ensure that the application of section 956 is consistent with the new participation exemption system.

Treasury and IRS welcome public comments on these proposed regulations. For details on submitting comments, see the proposed regulations.

Updates on the implementation of the TCJA can be found on the Tax Reform page of IRS.gov.

Want To Know More About The Benefits of the 2017 TCJA?
Contact the Tax Lawyers at
Marini & Associates, P.A.

for a FREE Tax Consultation Contact Us at:
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Read more at: Tax Times blog

2017 TCJA Improved US Tax Competitiveness

 The US has moved up the rankings of the Tax Foundation’s 2018 International Tax Competitiveness Index (ITCI), following significant reform implemented by the Tax Cuts and Jobs Act 2017 (TCJA), implemented at the beginning of the year.

Last year’s ITCI saw the US ranked 28th, Whereas this Year’s Report Places it 24th on the List.

The ITCI measures the relative competitiveness and neutrality of each tax regime in the OECD, and concludes that countries with the lowest marginal tax rates and fewest ‘distortionary’ taxes tend to be those with the most competitive tax systems.

The United States adopted a comprehensive tax reform package that included a reduction of the corporate income tax rate from 35 percent to 21 percent, improvements to expensing of capital investments, and rate changes for the personal income tax. As a result, the U.S. improved its ranking from 28th to 24th.

In the individual rankings, the US was placed 26th for individual taxes and 28th for property taxes, while it came 20th in the corporate tax ranking.

The Tax Foundation described the TCJA as “the most significant tax code overhaul in over three decades,” and said on the release of this year’s ITCI: “Due to reforms made by the Tax Cuts and Jobs Act to lower the corporate income tax rate, improve expensing of capital investments, and adjust personal income tax rates, the US improved four spots.”

Nonetheless, the Foundation pointed to areas which would improve the US’ performance in the ITCI, calling both its income tax and property tax burden “weaknesses”, and describing the international tax system as “onerous.”

Estonia has topped the Index for the fifth successive year, while France came at the bottom of the 2018 ranking.

Want To Invest in the US?
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

Marshall Arts Owner Gets Karate Chopped With Tax Fraud Conviction

According to DoJ Arvada, Colorado, woman pleaded guilty on October 29, 2018 to one count of willfully making and subscribing to a fraudulent corporate income tax return.

According to court documents, Marlene Seo owned and operated a corporation called National Martial Arts Academy Inc., a martial arts instruction business. 
From 2011 through 2013, income from Seo’s martial arts school was deposited into bank accounts that she did not disclose to the corporation’s bookkeeper and accountants, which resulted in her underreporting the business’s gross receipts on corporate tax returns for tax years 2011, 2012, and 2013 by approximately $650,000. 
  • Seo plead guilty to signing and filing a false 2012 U.S. Corporation Income Tax Return, Form 1120, filed on behalf of National Martial Arts Academy.
  • Sentencing is scheduled for February 1, 2019. 
  • Seo faces a maximum sentence of 3 years in prison
  • She also faces a term of supervised release, restitution, and monetary penalties.
Have a Criminal Tax Problem?

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Marini & Associates, P.A.
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Huntington Beach Man Pleads Guilty to Failing to Report Over $2 Million Held in Israeli Bank Account

A Huntington Beach man pleaded guilty on October 29, 2018 to filing a false tax return that failed to report millions of dollars in foreign bank accounts and the resulting income.

According to the DoJ, Elie Waknine, of Huntington Beach, California, held millions of dollars in an offshore account in Israel at Bank Leumi Le-Israel B.M. from approximately 1994 to 2011. 

Despite having this account, Waknine filed a tax return for 2007 that falsely claimed he did not have financial interest in or signature authority over any foreign financial accounts.

In an effort to further hide his money, Waknine instructed Bank Leumi to hold bank mail from delivery to the United States, and obtained access to his offshore funds through the use of “back-to-back” loans, which were designed to enable borrowers to tap their concealed accounts. These lending arrangements permitted Waknine to have funds issued by Leumi’s U.S. branch that were secretly secured by funds in his undeclared accounts in Israel. 

In 2011, Waknine closed his Bank Leumi Israel account, but used the $2.4 million he received from closing the account to open a new undisclosed foreign bank account at another bank in Israel.  Over the period 1994-2015, Waknine held undisclosed foreign bank accounts in four banks in three countries, each with assets of at least $1 million.

In December 2014, Bank Leumi entered into a deferred prosecution agreement, in which the bank admitted to conspiring from at least 2000 until early 2011 to aid and assist U.S. taxpayers to prepare and present false tax returns by hiding income and assets in offshore bank accounts in Israel and other foreign locations.  

Under The Terms Of The Deferred Prosecution Agreement, Bank Leumi Paid the US a Total of $270 Million and "CONTINUES TO COOPERATE"

With Respect To Civil And Criminal Tax Investigations.  

U.S. citizens, resident aliens, and permanent legal residents with a foreign financial interest in or signatory authority over a foreign financial account worth more than $10,000 are required to file an FBAR each year disclosing the account, and are required to report the account and any resulting income on their annual tax returns.

Waknine faces a maximum sentence of 3 years in prison, as well as a period of supervised release, restitution and monetary penalties.

Do You Have a Un-Reported Offshore Income?
Is Your Name Being Handed Over to the IRS?

Want to Know Which Remaining IRS Program is
Right for You? 


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

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