Fluent in English, Spanish & Italian | 888-882-9243

call us toll free: 888-8TAXAID

Blog

US Real Estate Investments & Anonymous Entities Again in Spotlight for US Money Laundering!

February 1, 2016

 
On Thursday, January 14, 2016  we posted U.S FinCEN Will Track Secret Buyers of Luxury Real Estate in Manhattan and Miami where we discussed that the Financial Crimes Enforcement Network (FinCEN) on January 13, 2016 issued a Geographic Targeting Orders (GTO) that will temporarily require certain U.S. title insurance companies to identify the natural persons behind companies used to pay "all cash" for high-end residential real estate in the Borough of Manhattan in New York City, New York, and Miami-Dade County, Florida.
 

The initiative is part of a broader federal effort to increase the focus on money laundering in real estate. Treasury and federal law enforcement officials said they were putting greater resources into investigating luxury real estate sales that involve shell companies like limited liability companies, often known as L.L.C.s; partnerships; and other entities.

The Treasury’s program will affect billions of dollars in real estate transactions. In Manhattan, the initiative requires buyers in sales of more than $3 million to be reported; in Miami-Dade County, it requires reporting on sales of more than $1 million. In Manhattan, 1,045 residential sales cost more than $3 million in the second half of 2015, worth some $6.5 billion in aggregate, according to PropertyShark, a real estate data company.

 
With attention growing on the use of shell companies in high-end real estate, an activist organization released a report Sunday January 31, 2016 that said several New York real estate lawyers had been caught on camera providing advice on how to move suspect money into the United States. This investigation was covered in the New York Times and is the result of an undercover investigation carried out in 2014 by Global Witness, a nonprofit activist organization that has been pushing for stricter money-laundering rules.
 

We all know what it feels like to get ripped off or scammed. But we know less about the tools the criminals use to get away with their illicit activities.  Global Witness has previously looked at a whole range of crimes, and found they all had one thing in common - They were all carried out by anonymous company owners, who are able to skirt U.S. laws and launder money through our financial system. If these sham companies did not exist, those crimes would be far harder to commit.
 
 

The key findings from the investigation are:

  • Lawyers from 12 of the 13 firms we visited suggested using anonymous companies or trusts to hide the minister’s assets. All but one of these firms recommended using American companies.
  • One of the lawyers was the President of the American Bar Association at the time.
  • Several lawyers suggested using their law firms’ own bank accounts to help prevent U.S. banks realizing whose money it really was, or to have the lawyer act as a trustee of an offshore trust and use this position to open a bank account.
  • While most of the lawyers asked for some information about the minister, and his source of funds, only one lawyer refused to provide assistance during the meeting itself.
 
Lawyers who were named in the report, or their representatives, told The Times that they took issue with Global Witness’s undercover methods.
 
This week, a bipartisan group of lawmakers is planning to introduce a bill in the House of Representatives to require more transparency into shell companies nationwide. And later this week, activists in London will hold what they are calling a Kleptocracy Tour, a bus ride past properties that they said had been associated with illicit money. They plan to hold a similar tour in New York in April.
 

 

 
Need Experience Legal Advice for
Your US Real Estate Investments?

 
 
 

 
 
 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

DOJ Swiss Bank Program is Over After Netting $1.36 Billion!

January 28, 2016

The Department of Justice announcedtoday January 27, 2016 that it reached its final non-prosecution agreement under Category 2 of the Swiss Bank Program, with HSZH Verwaltungs AG (HSZH).  

The department has executed agreements with 80 banks, since March 30, 2015, when it announced the first Swiss Bank Program non-prosecution agreement with BSI SA.  By our count it is 94 banks - see our post 93 Swiss Banks Are Turning Over Your Names To The IRS - What Are Your Waiting For?, plus HSZH, but who's counting (See Below)?

The department has imposed a total of more than $1.36 billion in Swiss Bank penalties, including more than $49 million in penalties from HSZH.  Every bank in the program, including HSZH, is required to cooperate in any related criminal or civil proceedings, and that cooperation continues through 2016 and beyond.

"Through this initiative, we have Uncovered Those who Help Facilitate Evasion Schemes and those who Hide Funds in Secret Offshore Accounts" said Attorney General Loretta E.  Lynch. 
 

HSZH, the final bank to reach a non-prosecution agreement under Category 2 of the Swiss Bank Program. Until 2013, HSZH conducted a U.S. cross-border banking business that aided and assisted certain of its U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the U.S. government.  Through its managers, employees and/or others, HSZH knew or had reason to know that some U.S. taxpayers who opened and maintained accounts at HSZH were not complying with their U.S. income tax and reporting obligations.
Meetings between HSZH private bankers and U.S. clients took place in multiple locations within the United States, including in Florida, New York, Pennsylvania, Virginia and Washington, D.C.  Some U.S. clients asked for cash on a regular basis, so at times, the HSZH private banker for such clients would personally deliver cash to the clients in the United States in amounts below $10,000 to avoid the reporting requirements. 
During the period since Aug. 1, 2008, HSZH held a total of 605 U.S.-related accounts, both declared and undeclared, with an aggregate peak of approximately $1.12 billion in assets under management.  HSZH will pay a penalty of $49.757 million.

Under the program, banks are required to:

  • Make a complete disclosure of their cross-border activities;
  • Provide detailed information on an account-by-account basis for accounts in which U.S. taxpayers have a direct or indirect interest;
  • Cooperate in treaty requests for account information;
  • Provide detailed information as to other banks that transferred funds into secret accounts or that accepted funds when secret accounts were closed;
  • Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
  • Pay appropriate penalties.

 















The complete list of Swiss Banks which are turning over the names of their US Account Holders, who are now subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP)is as of 1/25/16: 

  1. UBS AG
  2. Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.
  3. Wegelin & Co.
  4. Liechtensteinische Landesbank AG
  5. Zurcher Kantonalbank
  6. swisspartners Investment Network AG, swisspartners Wealth Management AG, swisspartners Insurance Company SPC Ltd., and swisspartners Versicherung AG
  7. CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates
  8. Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.
  9. The Hong Kong and Shanghai Banking Corporation Limited in India (HSBC India)
  10. The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield), its predecessors, subsidiaries, and affiliates
  11. Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14)
  12. Bank Leumi le-Israel B.M., The Bank Leumi le-Israel Trust Company Ltd, Bank Leumi (Luxembourg) S.A., Leumi Private Bank S.A., and Bank Leumi USA (effective 12/22/14)
  13. BSI SA (effective 3/30/15)
  14. Vadian Bank AG (effective 5/8/15)
  15. Finter Bank Zurich AG (effective 5/15/15)  
  16. Societe Generale Private Banking (Lugano-Svizzera) SA (effective 5/28/15)
  17. MediBank AG (effective 5/28/15)
  18. LBBW (Schweiz) AG (effective 5/28/15)
  19. Scobag Privatbank AG (effective 5/28/15)  
  20. Rothschild Bank AG (effective 6/3/15)
  21. Banca Credinvest SA (effective 6/3/15)
  22. Societe Generale Private Banking (Suisse) SA (effective 6/9/15)
  23. Berner Kantonalbank AG (effective 6/9/15)
  24. Bank Linth LLB AG (effective 6/19/15)
  25. Bank Sparhafen Zurich AG (effective 6/19/15)
  26. Ersparniskasse Schaffhausen AG (effective 6/26/15)
  27. Privatbank Von Graffenried AG (effective 7/2/15)
  28. Banque Pasche SA (effective 7/9/15)
  29. ARVEST Privatbank AG (effective 7/9/15)
  30. Mercantil Bank (Schweiz) AG (effective 7/16/15)
  31. Banque Cantonale Neuchateloise (effective 7/16/15)
  32. Nidwaldner Kantonalbank (effective 7/16/15)
  33. SB Saanen Bank AG (effective 7/23/15)
  34. Privatbank Bellerive AG (effective 7/23/15)
  35. PKB Privatbank AG (effective 7/30/15)
  36. Falcon Private Bank AG (effective 7/30/15)
  37. Credito Privato Commerciale in liquidazione SA (effective 7/30/15)
  38. Bank EKI Genossenschaft (effective 8/3/15)
  39. Privatbank Reichmuth & Co. (effective 8/6/15)
  40. Banque Cantonale du Jura SA (effective 8/6/15)
  41. Banca Intermobiliare di Investimenti e Gestioni (Suisse) SA (effective 8/6/15)  
  42. bank zweiplus ag (effective 8/20/15)
  43. Banca dello Stato del Cantone Ticino (effective 8/20/15)
  44. Hypothekarbank Lenzburg AG (effective 8/27/15)
  45. Schroder & Co. Bank AG (effective 9/3/15)
  46. Valiant Bank AG (effective 9/10/15)
  47. Bank La Roche & Co AG (effective 9/15/15)
  48. Belize Bank International Limited, Belize Bank Limited, Belize Corporate Services Limited, their predecessors, subsidiaries, and affiliates (effective 9/16/15)
  49. St. Galler Kantonalbank AG (effective 9/17/15)
  50. E. Gutzwiller & Cie, Banquiers (effective 9/17/15)
  51. Migros Bank AG (effective 9/25/15)
  52. Graubundner Katonalbank (effective 9/25/15)
  53. BHF-Bank (Schweiz) AG (effective 10/1/15)
  54. Finacor SA (effective 10/6/15)
  55. Schaffhauser Kantonalbank (effective 10/8/15)
  56. BBVA Suiza S.A. (effective 10/16/15)
  57. Piguet Galland & Cie SA (effective 10/23/15)
  58. Luzerner Kantonalbank AG (effective 10/29/15)
  59. Habib Bank AG Zurich (effective 10/29/15)
  60. Banque Heritage SA (effective 10/29/15)
  61. Hyposwiss Private Bank Genève S.A. (effective 10/29/15)
  62. Banque Bonhôte & Cie SA (effective 11/3/15)
  63. Banque Internationale a Luxembourg (Suisse) SA (effective 11/12/15)
  64. Zuger Kantonalbank (effective 11/12/15)
  65. Standard Chartered Bank (Switzerland) SA, en liquidation (effective 11/13/15)
  66. Maerki Baumann & Co. AG (effective 11/17/15)
  67. BNP Paribas (Suisse) SA (effective 11/19/15)
  68. KBL (Switzerland) Ltd. (effective 11/19/15)
  69. Bank CIC (Switzerland) Ltd. (effective 11/19/15)
  70. Privatbank IHAG Zürich AG (effective 11/24/15)
  71. Deutsche Bank (Suisse) SA (effective 11/24/15)
  72. EFG Bank AG (effective 12/3/15)
  73. EFG Bank European Financial Group SA, Geneva (effective 12/3/15)
  74. Aargauische Kantonalbank (effective 12/8/15)
  75. Cornèr Banca SA (effective 12/10/15)
  76. Bank Coop AG (effective 12/10/15)
  77. Crédit Agricole (Suisse) SA (effective 12/15/15)
  78. Dreyfus Sons & Co Ltd, Banquiers (effective 12/15/15)
  79. Baumann & Cie, Banquiers (effective 12/15/15)
  80. Bordier & Cie Switzerland (effective 12/17/15)
  81. PBZ Verwaltungs AG (effective 12/17/15)
  82. PostFinance AG (effective 12/17/15)
  83. Edmond de Rothschild (Suisse) SA (effective 12/18/15)
  84. Edmond de Rothschild (Lugano) SA (effective 12/18/15)
  85. Bank J. Safra Sarasin AG (effective 12/23/15)
  86. Coutts & Co Ltd (effective 12/23/15)
  87. Gonet & Cie (effective 12/23/15)
  88. Banque Cantonal du Valais (effective 12/23/15)
  89. Banque Cantonale Vaudoise (effective 12/23/15)
  90. Bank Lombard Odier & Co Ltd (effective 12/31/15)
  91. DZ Privatbank (Schweiz) AG (effective 12/31/15)
  92. Union Bancaire Privée , USP SA (effective 1/6/16)
  93. PHZ Privat - und Handelsbank Zürich AG reorganized as Leodan Privatbank AG (effective 1/25/16)
  94. HSZH Verwaltungs AG (effective 1/28/16).  

Outside of these banks, the norm within the OVDP remains 27.5%. That is far better than prosecution or much bigger civil penalties. Some taxpayers, including taxpayers with accounts at one of the 93 Swiss Banks listed abover can opt for the easier and less costly Streamlined program. This list does not impact the Streamlined programs because you must be non-willful to qualify. All of this is part of the June 2014 improvements to the OVDP, which sparked new interest in cleaning up offshore accounts.
 
  1. With 94 Swiss banks taking the DOJ deal and 

  2. FATCA requiring the entire world to report to the IRS
it is inevitable that this increased disclosure, will result in Every American eventually being discovered. Banks worldwide want to know if there US clients are compliant with the IRS.
 

Within the OVDP, people who pre-cleared before the various effective dates are generally safe from the higher 50% penalty. As additional banks are added to the list, only those American taxpayers that request pre-clearance before their bank is listed, will get the 27 1/2% OVDP penalty. The 50% penalty now applies to all taxpayers with accounts at financial institutions or with facilitators which are named, are cooperating or are identified in a court filing such as a John Doe summons.
 
Although the 50% penalty is high, willful civil violations can result in tax, penalties and interest totaling 325% of the highest balance in the account for the  most recent six years period. Recent guidance suggests that the IRS could be more lenient in the future, but the IRS’s definition of leniency can still make the OVDP a very good deal that provides certainty.  
 
Do You Have Undeclared Income from one of 

These Swiss Banks or

Swiss Asset Management Company?

 
 
Is Your Name Being Handed Over to the IRS?
 
 
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.us or www.TaxLaw.ms or
Toll Free at 888-8TaxAid (888) 882-9243

 

Read more at: Tax Times blog

Streamlined Disclosure Program Will Not Continue Indefinitely

January 27, 2016

According to a statement made Commissioner Koskinen on  December 17, 2015 at the George Washington University Law conference on international taxation, the streamlined version of the Offshore Voluntary Disclosure Program, designed to bring taxpayers with unreported assets overseas into tax compliance, will end after the IRS determines there is no way a taxpayer who wanted to participate couldn't have heard about the process. 


“At some point, we will have assumed that people have
had enough notice that they should have become
 voluntarily compliant.”

This statement that the streamlined program will not continue indefinitely, has been reiterated by senior IRS officials at subsequent international tax conferences!
 

The Foreign Account Tax Compliance Act (FATCA) has helped bring visibility to the compliance issue. With the FATCA reporting mechanics in place, the IRS is now working to determine what data is the most useful and how to analyze the data for irregularities that could indicate an issue to examine. While no one will be immediately receiving tax-due notices; the IRS is collecting a lot of information through FATCA. 
We previously posted, FATCA - U.S. Began Reciprocal Automatic Exchange of Tax Information On Sept. 30, 2015! where we discussed that the IRS announced the on September 30, 2015 foreign banks and countries actually began exchanging financial account information pursuant to FATCA.

The Information NOW available provides
the United States and Partner Jurisdictions
an improved means of verifying the
Tax Compliance of Taxpayers using
Offshore Banking and Investment Facilities
 
 
& Improves Detection of those who 
Attempt to Evade Reporting
the existence of Offshore Accounts &
the Income Attributable to those Accounts.

The capacity for reciprocal automatic exchange builds on numerous accomplishments including the following:

  • Development of a consistent data reporting format, or schema, and the agreement to use this format by all jurisdictions;
  • Establishment of the details and procedures required to assure data confidentiality;
  • Creation of a data transmission system to meet high standards for encryption and security; and
  • Cooperation with foreign jurisdiction tax administrations to achieve the timely implementation of this exchange.
The Risks of Hiding Money Offshore are Growing!

Do You Have Undeclared Income from Offshore Banks 
Who Are Handing Over Names to the IRS?
 
 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.us or www.TaxLaw.ms or
Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

2016 Form 1099's are FATCA Compliant

January 27, 2016

IRS has issued the final version of 2016 Form 1099's which contain a checkbox to be used if the form is being used to meet requirements of the Foreign Account Tax Compliance Act (FATCA).
 

The 2016 Forms Form 1099-B (Proceeds from Broker and Barter Exchange Transactions), 1099-DIV (Dividends and Distributions), 1099-INT (Interest Income), 1099-OID (Original Issue Discount) and 1099-MISC (Miscellaneous Income) each contain a checkbox entitled "FATCA filing requirement" that the form instructions instruct taxpayers to complete if they are using the form to meet the requirements of either of those regs. 


A new checkbox was added to 2016 Form 1099-B to identify an FFI or U.S. payor filing this form to satisfy its chapter 4 reporting requirement. If the FATCA filing requirement box is checked, the payer is reporting on this Form 1099 to satisfy its chapter 4 account reporting requirement. A taxpayer who receives a Form 1099-B with the FATCA box checked, may also have a Form 8938 filing requirement.

For 2016's Form 1099-B, there is a third box which is labeled "Ordinary" Brokers, etc. are now required to determine whether the gain or loss is short-term or long-term and whether any portion of the gain or loss is ordinary. They are permitted to check up to 2 boxes if a portion of the gain or loss is ordinary and the remaining portion is short-term or long-term. They may not report both short-term and long-term gain or loss on the same Form 1099-B.

Towards the bottom of Form 1099-B is an unnumbered box for "Account number". Historically, an account number was required if the broker, etc. had multiple accounts for a recipient for whom it was filing more than one Form 1099-B.

For 2016, the instructions to Box 9 note that brokers, etc. should not include in that box amounts related to contracts that were open on Dec. 31, 2015 and were transferred to another broker during 2016. Any person that transfers custody of a "specified security" to a broker, after one of several statutorily specified dates, must give the broker a written transfer statement within 15 days after the date of settlement for the transfer.

The 2016 Form 1099-B instructions provide that the transfer statement information required in the case of a debt instrument has been expanded and that a transfer statement is required for the transfer of a section 1256 option occurring on or after Jan. 1, 2016.

Do You Have Undeclared Income from a Foreign Bank or Foreign Securities or Asset Management Company?
 
 
Is Your Name Being Handed Over to the IRS?
 
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.us or www.TaxLaw.ms or
Toll Free at 888-8TaxAid (888) 882-9243

Read more at: Tax Times blog

Live Help