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More & More Fallout From the “Panama Papers”!

We previously posted More fallout from the "Panama Papers" - Commercial Bank of Taiwan To Pay a $180 Million Penalty we where we discussed that Financial Services Superintendent Maria T. Vullo announced  on 8/19/16 that Mega International Commercial Bank of Taiwan will pay a $180 million penalty and install an independent monitor for violating New York’s anti-money laundering laws.  

Now the Swiss federal authorities have announced that 450 Swiss individuals and companies listed in the Mossack Fonseca data leak have been found to 'have a link to offshore structures and Switzerland'.

Their records will be passed onto the Swiss Cantons to determine whether tax evasion has been committed, keeping in mind that under Swiss law., the use of an offshore entity is not, in and of itself, illegal.

Do You Have Undeclared Income 

From A Foreign Entity Formed By

?????
 
 

  Do You Have Undeclared Accounts
With Any of the Following Foreign Banks?
 
 
 
Want to Know Witch OVDP Program is Right for You?

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

Sources:

Read more at: Tax Times blog

Good Corporate US Tax Planning Gone Awry?

A new report released this week by Citizens for Tax Justice (CTJ), the Institute of Taxation and Economic Policy (ITEP) and the US Public Interest Research Group (PIRG) posits that Fortune 500 (US-based) companies have stashed away close to $2.5 trillion in offshore accounts in an effort to reduce their tax burdens.

The report titled “Offshore Shell Games 2016: The Use of Offshore Tax Havens by Fortune 500 Companies” ranks Apple at the top of the list of tax avoiders with approximately $214.9 billion kept offshore followed by Pfizer ($193.6 billion), Microsoft ($124 billion), General Electric ($104 billion) and IMB ($68.1 billion).

 
Top 30 companies with the most money held offshore 

According to the report, “multinational corporations use tax havens to avoid an estimated $100 billion in federal income taxes each year” with 367 of the top 500 companies keeping 10,366 tax haven subsidiaries.

Furthermore, the top 30 firms “with the most money officially booked offshore for tax purposes collectively operate 2,509 tax haven subsidiaries,” the most popular destinations being the Netherlands. As a group, these 30 companies “account for 66 percent or $1.65 trillion” of the total figure for Fortune 500 companies.

 

Percent of Fortune 500 companies with 2015 Subsidiaries in 20 top tax havens 

The study also claims that most of America’s largest corporations maintain subsidiaries in offshore tax ha­vens. At least 367 companies, or 73 percent of the Fortune 500, operate one or more subsidiaries in tax haven countries.

  • All told, these 367 companies maintain at least 10,366 tax haven subsidiaries.
  • The 30 companies with the most money officially booked offshore for tax purposes collectively operate 2,509 tax haven subsid­iaries. 
The most popular tax haven among the Fortune 500 is the Netherlands, with more than half of the Fortune 500 reporting at least one subsidiary there.

Approximately 58 percent of companies with tax haven subsidiaries have set up at least one in Bermuda or the Cayman Islands, two particularly notorious tax havens. The profits that all American multinationals, not just Fortune 500 companies, collectively claimed they earned in these two island nations according to the most recent data totaled 1,884 percent and 1,313 percent of each country’s entire yearly economic output, respectively.

Profits reported collectively by American Multinational Corporations in 2012 to 10 notorious tax havens 

This practice, says the report, is unfair: “multinational companies that depend on America’s economic and social infrastructure are shirking their obligation to pay for that infrastructure when they shelter their profits overseas.”

Have a Tax Problem?


 

 

Let Us Help!

 

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

Europe Begins Inquiry into 'Panama Papers' & 'Bahamian Papers' – How Long Before You Are Discovered?

We previously posted:

  1. Your Offshore Confidential Information Is Being Delivered Daily to Tax Authorities - New Leak of Bahamian Offshore Files! and
  2. Mossack Fonseca Affected Taxpayers with Potential Exposure Should Consult with Counsel To Consider Their Legal Options Now!

Now the European Parliament's Committee of Inquiry into Money Laundering, Tax Avoidance, and Tax Evasion has begun its hearings on the 'Panama Papers' affair, in which large numbers of client documents were stolen from the Panama law firm Mossack Fonseca and leaked to the International Consortium of Investigative Journalists and the press.

The inquiry committee will also examine the more recent leak of company registry entries from the Bahamas, including the alleged fact that former European Competition Commissioner Neelie Kroes failed to declare her former directorship of a Bahamian company.

Have Unreported Foreign Income?
 
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
Toll Free at 888-8TaxAid (888) 882-9243

 

 

 
 

 

 

 

Read more at: Tax Times blog

QTIP Election Can Be Ignored Where It Was Not Necessary to Reduce the Estate Tax to Zero

Revenue Procedure 2016-49 provides procedures to disregard and treat as null and void for transfer tax purposes a qualified terminable interest property (QTIP) election in situations where the QTIP election was not necessary to reduce the estate tax liability to zero. 

This guidance provides that such procedures are unavailable where QTIP elections are made in estates in which the executor elected portability of the deceased spousal unused exclusion (DSUE) amount under § 2010(c)(5)(A).  This guidance modifies and supersedes Rev. Proc. 2001-38, 2001-1 C.B. 1335. 

Advantageous 2017 Application Filing Deadline Extended: Complete and accurate certification applications filed before October 1, 2016 will have an effective date of certification of January 1, 2017, even if the date of the CPEO’s notice of certification is after January 1, 2017. The prior guidance had a September 1, 2016 deadline for this special transition rule.

CPA Working Capital Statements Can Be Provided in a Note: Treasury and IRS anticipate revising the requirements of the temporary regulations and Revenue Procedure 2016-33 to allow the audited financial statements covered by the CPA opinion to include a note to the financial statements that states that the financial statements reflect positive working capital. The note must still provide in detail a calculation of the working capital. In the case of a CPEO applicant that is a member of a controlled group of which other members are CPEO applicants or CPEOs, the note to the financial statements of the combined or consolidated annual audited financial statements for the controlled group must state that the individual financial statements of each CPEO applicant or CPEO that is a member of the controlled group reflect positive working capital (as defined by GAAP).

CPA Statements Re: Accrual Accounting Eliminated: Because GAAP requires the use of an accrual method of accounting and the required CPA opinion must state that a CPEO applicant’s or CPEO’s audited annual financial statements are presented fairly in accordance with GAAP, the separate requirement for a CPA opinion stating that such financial statements “reflect that the CPEO . . . computes its taxable income using an accrual method of accounting” is unnecessary. Treasury and IRS anticipate revising the Revenue Procedure 2016-33 to eliminate the requirement of a CPA statement re: accrual accounting.

Working Capital Transition Rule for Years Ending Before September 30, 2016: For fiscal years ending before September 30, 2016, a special transition rule is provided allowing the CPEO applicant to submit a separate statement, signed under penalties of perjury by a responsible individual of the CPEO applicant, that the financial statements reflect positive working capital for the fiscal year. That responsible individual statement could be provided in lieu of the CPA opinion or Note to the Financial Statement, described above. However, the statement by the responsible individual must also provide in detail a calculation of the CPEO applicant’s working capital. In the case of a CPEO applicant that is a member of a controlled group of which other members are also CPEO applicants or CPEOs, the CPEO applicant must submit its own separate statement by a responsible individual re: positive working capital, again setting forth in detail a calculation of the individual CPEO applicant’s working capital.

CPA Declaration Re: Authorization to Represent the CPEO Eliminated: The requirements in the proposed regulation and Revenue Procedure 2016-33 that the CPA file a written declaration with the IRS that he or she is authorized to represent the CPEO applicant or CPEO before the IRS will be eliminated.

Disregarded Entities May Apply for Certification: Treasury and the IRS anticipate that the final regulations under section 7705 will not prohibit a business entity that is disregarded as separate from its owner from becoming a CPEO. In addition, Treasury and the IRS anticipate revising the definition of Responsible Individual, to also include: (1) in the case of a disregarded entity owned by a corporation or partnership, the Responsible Individuals of that corporation or partnership (as defined by the regulations); and (2) in the case of a disregarded entity owned by an individual, the individual owner. Treasury and the IRS also anticipate providing in the final regulations that CPEO applicants and CPEOs that, but for their status as disregarded entities would separately be members of a controlled group, are treated as members of a controlled group.

Sole Proprietorships Can Apply for Certification: Treasury and IRS anticipate that the final regulations will expressly allow sole proprietorships to apply for certification as a CPEO.

Taxpayers Can Rely on Notice 2016-49: Treasury/IRS expressly confirm that the statements in Notice 2016-49 that the final regulations and future updated revenue procedures, when issued, will address the issues identified in Notice 2016-49 in the manner indicated in that Notice (as described above). Pending the issuance of final regulations and the updated revenue procedure, taxpayers may rely on the guidance contained in this notice.
 


Revenue Procedure 2016-49 will be published in IRB 2016-42 on October 17, 2016.

 

Have a US Estate Tax Problem?

 

 
Estate Tax Problems Require
an Experienced Estate Tax Attorney
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).
 
 
Robert S. Blumenfeld  - 
 Estate Tax Counsel
Mr. Blumenfeld concentrates his practice in the areas of International Tax and Estate Planning, Probate Law, and Representation of Resident and Non-Resident Aliens before the IRS.

Prior to joining Marini & Associates, P.A., he spent 32 years as the Senior Attorney with the Internal Revenue Service (IRS), Office of Deputy Commissioner, International.

While with the IRS, he examined approximately 2,000 Estate Tax Returns and litigated various international and tax issues associated with these returns.As a result of his experience, he has extensive knowledge of the issues associated with and the preparation of U.S. Estate Tax Returns for Resident and Non-Resident Aliens, Gift Tax Returns, Form 706QDT and Qualified Domestic Trusts.

 

 
 



Sources:

IRS

NAPEO

Read more at: Tax Times blog

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