Monthly Archives: February 2021

According to the Miami Hearld Magic Johnson is one of a cavalcade of rich and famous, including golfer Tiger Woods, actors Angelina Jolie and Brad Pitt, soccer star Cristiano Ronaldo, among them, listed as the owners of registered businesses in the Grand Duchy of Luxembourg.

There is nothing illegal about owning Luxembourg Companies and there are legitimate reasons for a company to hide the identify of its owners. But the benefits, as well as the secrecy, are being stripped away. Up until recently, it was a way to minimize taxes and maintain a high level of confidentiality.

Now, thanks to a law that took effect in 2019 requiring Luxembourg companies to list their beneficial owners, those who have an actual financial stake in the company, are now public.

The double whammy of the new transparency law and the 2020 expiration of the special tax perks documented in the 2014 Luxembourg Leaks investigation, appear to have made a dent on the country’s popularity as a destination for global wealth: 2020 was the first year in the registry’s history that more existing companies left Luxembourg than new companies entered.

The Miami Herald and its parent McClatchy partnered with 17 media outlets, including Le Monde in France, Süddeutsche Zeitung in Germany and the Organized Crime and Corruption Reporting Project, as well as the nonpartisan Anti-Corruption Data Collective to analyze Luxembourg’s corporate registry, which contains more than 140,000 active companies, as part of a project called OpenLux. 

Need International Tax Advice?

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Read more at: Tax Times blog

According to Law360, a coming criminal tax investigation coordinated among the U.S. and other countries won't necessarily limit its focus to cryptocurrency and the financial technology industry, the chief of the Internal Revenue Service's Criminal Investigation arm said Thursday.

A coming investigation by the five-nation Joint Chiefs of Global Tax Enforcement will concentrate on cryptocurrency and financial technology but will not be confined to those areas, an Internal Revenue Service official said Thursday. 

While the investigation will concentrate on tax evasion related to cryptocurrency and fintech, enforcement officials won't ignore any other findings that emerge, Jim Lee said during a virtual call with reporters. Known as the challenge, the investigation is the third of its kind from a collaborative tax enforcement effort that was formed in 2018 among five nations: the Netherlands, the U.S., the U.K., Canada and Australia.

Lee noted that this latest investigation will bring in experts from the five countries to develop leads for the organization, called the Joint Chiefs of Global Tax Enforcement, or J5. 

Lee noted that he'd seen people dealing with cryptocurrency, both domestically and internationally, who think that using the virtual currency makes them anonymous. But that's not the case, he said, citing results of previous J5 investigations.

"We're Out There," Lee Said. "We're Watching Everybody In This Space Internationally, And Domestically As Well."

The J5's first installment of the challenge focused on enablers of tax evasion, and the second phase focused on cryptocurrency, according to a statement from the IRS. As part of each phase, experts optimize data from the five countries, including offshore account information, to "make connections where current individual efforts would take years to make those same connections," the agency said.

Tax officials from the J5 countries declined Thursday to provide additional details about the organization's ongoing investigations.

The IRS announced in January 2020 what it called "the first major operational activity" by the J5. A series of investigations in multiple countries led to warrants and subpoenas issued to an unnamed financial institution in Central America, which was believed to be "facilitating money laundering and tax evasion for customers across the globe," according to the agency.

Investigators in IRS Criminal Investigation also worked on a case under the J5's umbrella involving the BitClub Network, a scheme that sought investor funds in return for shares of supposed cryptocurrency mining pools and rewarded investors for recruiting new investors, according to a statement in July.

In the years since the J5 was formed, the organization has seen departures by tax enforcement heads in Canada, the Netherlands and the U.S. Don Fort, then the chief of Criminal Investigation, told Law360 in September that despite these changes, the J5 had room to expand.

 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

The Internal Revenue Service reminds taxpayers to avoid “ghost” tax return preparers whose refusal to sign returns can cause a frightening array of problems. It is important to file a valid, accurate tax return because the taxpayer is ultimately responsible for it.

Ghost preparers get their scary name because they don’t sign tax returns they prepare. Like a ghost, they try to be invisible to the fact they’ve prepared the return and will print the return and get the taxpayer to sign and mail it. For e-filed returns, the ghost preparer will prepare but refuse to digitally sign it as the paid preparer.

By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid Preparer Tax Identification Number, or PTIN. Paid preparers must sign and include their PTIN on the return. Not signing a return is a red flag that the paid preparer may be looking to make a fast buck by promising a big refund or charging fees based on the size of the refund.

Unscrupulous tax return preparers may also:

• Require payment in cash only and not provide a receipt.
• Invent income to qualify their clients for tax credits.
• Claim fake deductions to boost the size of the refund.
• Direct refunds into their bank account, not the taxpayer’s account.

The IRS urges taxpayers to choose a tax return preparer wisely. The Choosing a Tax Professional page on IRS.gov has information about tax preparer credentials and qualifications. The IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help identify many preparers by type of credential or qualification.

Taxpayers should verify both their routing and bank account number on the completed tax return for any direct deposit refund. And taxpayers should watch out for preparers putting their bank account information onto the returns.

Taxpayers can report preparer misconduct to the IRS using IRS Form 14157, Complaint: Tax Return Preparer. If a taxpayer suspects a tax preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit.

 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

In a memo LB&I-04-1220-0021 (12/9/2020), the IRS's Large Business & International division (LB&I) has said it is extending the suspension of information document request (IDR) enforcement procedures through June 30, 2021 and all exam activities will continue under normal procedures (with some exceptions) through June 30, 2021.

On March 13, 2020, the President declared a national state of emergency due to the COVID-19 pandemic. (Emergency Declaration)

On March 25, 2020, the IRS announced that, as part of its People First Initiative, it was suspending all in-person contacts and some compliance actions through July 15, 2020. Specifically, the IRS announced that it would not start new field, office and correspondence examinations, unless a new examination was necessary to protect the government's interests. (IR 2020-59, see IRS suspends certain compliance programs due to COVID-19 (03/26/2020))

In March 2020, in response to IR 2020-59, LB&I said that IDR enforcement procedures would be suspended through July 15, 2020. (IRS memo: Approval for Deviation from IDR Process and Enforcement Control Number: LB&I-04-0320-0007 (3/25/2020))

In April 2020, LB&I clarified its compliance priorities for the period ending July 15, 2020. Generally, LB&I would not begin new return examinations before July 15, 2020. However, LB&I managers had the discretion to open an examination into prior year, subsequent year and related returns associated with an existing examination. See IRS Large Business & International division lists pre-July 15, 2020 priorities (04/21/2020).

In a new memo, LB&I says it is extending, in general, the suspension of IDR enforcement procedures through June 30, 2021.

However, for listed transactions (tax avoidance transactions identified by the IRS as listed transactions Reg §1.6011-4(b)(2)), examiners should follow the Servicewide summons procedures detailed in IRM 25.5.

In addition, in general, the LB&I exam activities will continue under normal procedures (with some exceptions) through June 30, 2021 "and thereafter." Exceptions to this rule are:

1. Appointments (whether in person or virtual) can be scheduled depending upon the facts and circumstances of the taxpayer. While in-person contact is allowed, IRS will continue to support performing our work virtually to accommodate our employees or taxpayers who may have concerns with in-person contact, which may require the need for statue extensions. Virtual appointments should continue to be conducted by WebEx or teleconference.

2. The hold on new Discriminate Analysis Score (DAS, a computer model the IRS uses to score examination potential for corporate returns with total assets of $10 million or more) cases will continue. IRS managers have discretion in approving prior, subsequent, and related returns associated with an existing DAS examination. 

Read more at: Tax Times blog