Monthly Archives: July 2020

On February 19, 2020 we posted J5 Tax Chiefs Closing The Net On Global Tax Evasion!, Where we discussed that leaders from five international tax organizations came together in Sydney, Australia, during the week of February 17, 2020 to review the J5’s progress in their fight against transnational tax crime and set priorities for the year ahead.

Now the J5 reflects on two-years pursuing global tax cheats. The J5 includes the Australian Taxation Office (ATO, the Canadian Revenue Agency (CRA), the Dutch Fiscal Information and Investigation Service (FIOD), Her Majesty’s Revenue and Customs (HMRC) from the UK and the Internal Revenue Service Criminal Investigation Division (IRS-CI) from the US.

During The Two Years Since The J5’s Inception, Hundreds Of Data Exchanges Between J5 Partner Agencies Have Occurred

With More Data Being Exchanged In The Past Year Than The Previous 10 Years Combined.

Since the inception of the organization, two J5 countries have hosted events known as “Challenges” aimed at developing operational collaboration. 

1. FIOD hosted the first J5 “Challenge” in Utrecht in 2018 and brought together leading data scientists, technology experts and investigators from all J5 countries in a coordinated push to track down those who make a living out of facilitating and enabling international tax crime.  
• The event identified, developed, and tested tools, platforms, techniques, and methods that contribute to the mission of the J5 focusing onidentifying professional enablers facilitating offshore tax fraud. 
2. The following year, the U.S. hosted a second “Challenge” in Los Angeles and brought together investigators, cryptocurrency experts and data scientists in a coordinated push to track down individuals perpetrating tax crimes around the world.

Last week, a Romanian man was arrested in Germany and admitted to conspiring to engage in wire fraud and offering and selling unregistered securities in connection with his role in the BitClub Network, a cryptocurrency mining scheme worth at least $722 million. This plea was the first for a case under the J5 umbrella and stemmed from collaboration with the Netherlands during the “Challenge” in Los Angeles in 2019.

In addition to the group’s work with enablers and virtual currency, the J5 also focused on platforms that enable each country to share information in a more organized manner.  

• FCInet is one such platform that each country has invested in to further that goal.  
• FCInet is a decentralized virtual computer network that enables agencies to compare, analyse and exchange data anonymously. 
• It helps users to obtain the right information in real-time and enables agencies from different jurisdictions to work together while respecting each other’s local autonomy.  
• Organizations can jointly connect information, without needing to surrender data or control to a central database. FCInet doesn’t collect data, rather it connects data.

The Introduction Of Automatic Exchange of 
Financial Information Between Countries, 
Registers of Beneficial Ownership, Information 

 

From Worldwide Data Leaks And Improved Tax Enforcement Had Made Hiding Wealth Offshore Increasingly Difficult.

Experts from the J5 countries have seen indications that tax offenders are embracing ever more complex methods to conceal their wrongdoings, creating multiple mechanisms and structures that are split across jurisdictions, taking advantage of those areas that offer secrecy and regulatory benefits. With this information, the J5 finds itself continuously adapting to the latest criminal methods and changing behaviors to prioritize the collective operational activity to tackle this dynamic threat picture. 

 

Have Unreported Income?

Read more at: Tax Times blog

On July 9, 2020 the Internal Revenue Service announced in IR-2020-147 that it issued final regulations that provide guidance on deductions for foreign-derived intangible income (FDII) and global intangible low-taxed income allowed to domestic corporations under the Internal Revenue Code.

These final regulations provide guidance on both the computation of the deductions available and the determination of FDII.

In addition, the guidance provides rules for the computation of FDII in the consolidated return context.

The guidance published today also finalizes the reporting rules requiring the filing of Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income and Global Intangible Low-Taxed Income.

• This document contains final regulations that provide guidance regarding the deduction for foreign-derived intangible income (FDII) and global intangible lowtaxed income (GILTI). 
• This document also contains final regulations coordinating the deduction for FDII and GILTI with other provisions in the Internal Revenue Code. 
• These regulations generally affect domestic corporations and individuals who elect to be subject to tax at corporate rates for purposes of inclusions under subpart F and GILTI.

Have an International Tax Problem?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP 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

On May 30, 2018 we posted TheUs Is Now The 2nd Largest Tax Haven And Is Scheduled To Be Blacklisted By TheEu!, where we discussed that the U.S. is the world’s second-largest tax haven, behind Switzerland and just ahead of the Cayman Islands, according to a report released May 15, 2018. 

On May 21, 2019 we posted Another IRS Summons on Behalf of a Foreign Government, where we discussed that France, Norway and now Finland have successfully petitioned the U.S. District Court to authorize IRS summonses to uncover the identities of Finnish residents using U.S.-issued payment cards in Finland. The DOJ and IRS are these mutual legal assistance treaty (MLAT) requests under various U.S. Tax Treaties at the request of foreign governments.

Now according to Times.KY, it is the US' turn to be on the defensive. Other countries are using similar tools to those America once employed to reveal un-taxed money stashed by their own citizens in the world’s largest economy. 

After the US passed FATCA 2010 that required foreign financial firms to spill the beans on American clients, more than 100 other countries signed up to the “Common Reporting Standard” (CRS), and now swap tax-relevant financial information with each other.

America, however, did not join the CRS. Instead it shares information on the foreign clients of American banks under FATCA’s reciprocal provisions. But sharing is patchy; a lot of countries get nothing. Combine that with the high level of anonymity offered by American shell companies, and it is hardly surprising that America has become the destination of choice for many tax evaders. One tax expert reckons that “over 90% of assets avoiding the CRS have been herded into the USA”.

Other countries are now finding that there are legal tools at their disposal to information on their citizens who have assets in the US.

One Is The So-Called John Doe Summons

  

This American provision assists tax authorities going after “a particular person or ascertainable group or class of persons” whom they suspect of financial wrongdoing, but whose identities are unknown. If approved by a court, the summons forces banks to hand over names

Until now the biggest user of such summonses in tax cases has been America, which, for instance, used the procedure in 2008 to prise open Swiss bank secrecy. 

Other countries suffering tax leakage will be looking more closely at this procedure. Any of the 90 countries with a ratified bilateral tax treaty with America can use it, though some seem unaware of the option. By contrast, America has agreed to exchange information with only 47 countries under FATCA. 

There could still be obstacles, for instance if an account is owned by an entity rather than an individual. But banks issued with a summons are required to investigate who stands behind account-holding shell companies. Due-diligence rules designed to curb money-laundering and the financing of terrorism, issued by FinCEN, a federal agency, already require banks to know the identity of such “beneficial” owners (though not all seem to do so). A shell-cracking bill picking up momentum as it passes through Congress would also help improve corporate transparency. 

So don't be surprised if more countries take the John Doe route to discover their tax resident's assets which are located in the US. 

Have an International Tax Problem?

 Contact the Tax Lawyers at
Marini & Associates, P.A. 

for a FREE Tax HELP 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

Read more at: Tax Times blog