Yearly Archives: 2018

At least 150 investigations were opened in 79 countries to examine possible tax evasion and money laundering, according to the US-based Center for Public Integrity.

Founded in 1977 by the German lawyer Jürgen Mossack, it was the world’s fourth-biggest provider of offshore services at the time the scandal erupted. Mossack was joined by the Panamanian lawyer Ramón Fonseca and a third director, the Swiss lawyer Christoph Zollinger, was later added.

Until the publication of the Panama Papers, it had been mostly obscure despite sitting at the heart of the global offshore industry and acting for about 300,000 companies. More than half were registered in British tax havens, as well as, in the UK.

Last month, Panamanian prosecutors raided the offices of Mossack Fonseca, seeking possible links to Odebrecht, Latin America’s largest engineering company. The Brazilian construction firm has admitted to bribing officials in Panama and other countries to obtain contracts in the region between 2010 and 2014.

Ramón Fonseca denied last month that his firm had a connection to Odebrecht, while accusing the Panamanian president, Juan Carlos Varela, of directly receiving money from Odebrecht. Varela has denied that he took any money from Odebrecht.
A few staff will continue to be employed to comply with requests from authorities and others.

(Program Ends September 28th)

 

Contact the Tax Lawyers at 

Marini& Associates, P.A.    

 

 

for a FREE Tax Consultation at:

www.TaxAid.com or www.OVDPLaw.com or

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

 

 

 

 

 

 

Sources:

The Guardian

On March 13, 2018, the IRS added Questions and Answers about Reporting Related to Section 965 on 2017 Tax Returns on its website. This document provides answers to questions regarding return filing and tax payment obligations arising under section 14103 of “An Act to provide for reconciliation pursuant to titles II and V of the concurrent resolution on the budget for fiscal year 2018,” P.L 115-97 (“the Act”), which was enacted on December 22, 2017.

The new provision enacted by section 14103 of the Act, set forth at section 965 of the Internal Revenue Code (the “Code”), applies with respect to the last taxable year of certain specified foreign corporations (as defined under

In general, section 965 of the Code requires United States shareholders, as defined under section 951(b) of the Code, to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.

section 965(e) of the Code) beginning before January 1, 2018, and the amount included in income under section 965 of the Code is includible in the United States shareholder’s year in which or with which such a specified foreign corporation’s year ends.  Taxpayers may have to pay tax resulting from section 965 of the Code when filing their 2017 tax returns.  For example, section 965 of the Code may give rise to a 2017 tax liability for a calendar year United States shareholder holding an interest in a calendar year specified foreign corporation.

Very generally, section 965 of the Code allows taxpayers to reduce the amount of such inclusion based on deficits in earnings and profits with respect to other specified foreign corporations. The effective tax rates applicable to such income inclusions are adjusted by way of a participation deduction set out in section 965(c) of the Code.

A reduced foreign tax credit applies to the inclusion under section 965(g) of the Code. Taxpayers, pursuant to section 965(h) of the Code, may elect to pay the transition tax in installments over an eight-year period. Generally, a specified foreign corporation means either a controlled foreign corporation, as defined under section 957 of the Code (“CFC”), or a foreign corporation (other than a passive foreign investment company, as defined under section 1297 of the Code, that is not also a CFC) that has a United States shareholder that is a domestic corporation.

The instructions in these FAQs are for filing 2017 tax returns with an amount under section 965 of the Code.

WASHINGTON – The Internal Revenue Service today announced (IR-2018-52) tha it will begin to ramp down the 2014 Offshore Voluntary Disclosure Program (OVDP) and close the program on Sept. 28, 2018. By alerting taxpayers now, the IRS intends that any U.S. taxpayers with undisclosed foreign financial assets have time to use the OVDP before the program closes.

Since the OVDP’s initial launch in 2009, more than 56,000 taxpayers have used one of the programs to comply voluntarily. All told, those taxpayers paid a total of $11.1 billion in back taxes, interest and penalties. The planned end of the current OVDP also reflects advances in third-party reporting and increased awareness of U.S. taxpayers of their offshore tax and reporting obligations.

The number of taxpayer disclosures under the OVDP peaked in 2011, when about 18,000 people came forward. The number steadily declined through the years, falling to only 600 disclosures in 2017.

The current OVDP began in 2014 and is a modified version of the OVDP launched in 2012, which followed voluntary programs offered in 2011 and 2009. The programs have enabled U.S. taxpayers to voluntarily resolve past non-compliance related to unreported foreign financial assets and failure to file foreign information returns.

Tax Enforcement

The IRS notes that it will continue to use tools besides voluntary disclosure to combat offshore tax avoidance, including taxpayer education, Whistleblower leads, civil examination and criminal prosecution. Since 2009, IRS Criminal Investigation has indicted 1,545 taxpayers on criminal violations related to international activities, of which 671 taxpayers were indicted on international criminal tax violations.

“The IRS remains actively engaged in ferreting out the identities of those with undisclosed foreign accounts with the use of information resources and increased data analytics,” said Don Fort, Chief, IRS Criminal Investigation. “Stopping offshore tax noncompliance remains a top priority of the IRS.”

Streamlined Procedures and Other Options

A separate program, the Streamlined Filing Compliance Procedures, for taxpayers who might not have been aware of their filing obligations, has helped about 65,000 additional taxpayers come into compliance. The Streamlined Filing Compliance Procedures will remain in place and available to eligible taxpayers. As with OVDP, the IRS has said it may end the Streamlined Filing Compliance Procedures at some point.

The implementation of the Foreign Account Tax Compliance Act (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 undisclosed foreign financial assets.  Because the circumstances of taxpayers with foreign financial assets vary widely, the IRS will continue offering the following options for addressing previous failures to comply with U.S. tax and information return obligations with respect to those assets:

• IRS-Criminal Investigation Voluntary Disclosure Program;
• Streamlined Filing Compliance Procedures;
• Delinquent FBAR submission procedures; and
• Delinquent international information return submission procedures.  

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

at: www.TaxAid.com or www.OVDPLaw.com or

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