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IRS Seizures Did Not Always Comply with Law

July 17, 2012

The Internal Revenue Service did not always comply with statutory requirements when conducting seizures of taxpayer property, according to a new report that found a handful of instances of such violations.

The report, released Monday by the Treasury Inspector General for Tax Administration, did not identify any instances in which taxpayers were adversely affected by the violations TIGTA inspectors found, but it noted that noncompliance with the legal requirements could result in abuses of taxpayers’ rights.
TIGTA said it reviewed a random sample of 50 of the 747 seizures conducted from July 1, 2010, through June 30, 2011, to determine whether the IRS is complying with legal and internal guidelines when conducting each seizure.

In the majority of seizures, the IRS followed all the legal guidelines, and TIGTA did not identify any instances in which the taxpayers were adversely affected. However, in 11 seizures, TIGTA identified 14 instances in which the IRS did not comply with a particular requirement of the Tax Code. .More specifically they found :
· Five instances in which the sale of the seized property was not properly advertised. (I.R.C. § 6335(b))
· Four instances in which the amount of the liability for which the seizure was made was not correct on the notice of seizure provided to the taxpayer. (I.R.C. § 6335(a))
· Three instances in which proceeds resulting from the seizure were not properly applied to the taxpayer’s account. (I.R.C. § 6342(a))
· Two instances in which the required information relating to the sale of the seized property was either incorrect or not provided to the taxpayer. (I.R.C. § 6340(c)).

Read more at: Tax Times blog

Netherlands – changes in legal framework on Dutch BVs

July 17, 2012

Introduction of the “Flex BV”

With effect from October 1, 2012 new rules will come into force in the Netherlands regarding the incorporation and daily management of Dutch BVs. The new rules are aimed at providing greater flexibility in the set up and day to day management of BVs. This flash email provides you with a brief overview of the most significant changes of the so-called “Flex BV”.

Simplified incorporation procedure

· No minimum capital (of Euro 18,000) required;

· No bank declaration required;

· An auditor declaration on contributions in kind is no longer required;

· Nominal value of shares can be denominated in currencies other than Euros.

Distributions to shareholders

· Distributions to shareholders are to be approved by the management board;

· It will be the management board’s responsibility to assess if it is “reasonably foreseeable” that the Flex BV can fulfil its obligations following the distribution. If the assessment is negative, the management board can withhold their approval;

· The introduction of joint and several liability for management board members for the approval of distributions, in the event such a distribution will cause a deficit;

· Liability of the shareholders for any deficit caused by a dividend distribution resulting in a deficit up to the full amount of the distribution.

Governance

· General meeting of shareholders may be held outside the Netherlands;

· Written resolutions of the shareholders may be adopted by a simple majority;

· Annual general meetings may be replaced by written resolutions.

Shares

· Shares with no or limited entitlement to distributions are allowed;

· Shares with no voting rights are allowed;

· Lock up period in articles is allowed;

· Share transfer restriction is no longer mandatory.


All existing BVs will be governed by the new law. However, their existing articles of association may hold more stringent stipulations that will still have to be adhered to. In case of a conflict between the existing articles of association and the new law, the new law will prevail. There is no need for an existing BV to make any changes to its articles of association, but to benefit fully from the flexibility of the new legislation, an amendment may be considered.

Should you require more information on any of these topics,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

Authorities Bought Coutts Bank's Depositor's List

July 16, 2012

The German state of North Rhine-Westphalia has bought another stolen CD containing confidential details of Swiss bank accounts, it is reported.

The state is already notorious for having bought a CD containing bank client data stolen from Credit Suisse in Zurich, which led to the prosecution of hundreds of German taxpayers with undeclared Swiss accounts. Earlier this year the Swiss government issued warrants for the arrest of the three Westphalian tax officials responsible, but the state prime minister defended them as ‘only doing their duty’.
This time the victim is said to be the Zurich branch of Coutts, the long-established private bank now owned by the Royal Bank of Scotland. The Financial Times' German edition reported at the weekend that the North Rhine-Westphalia tax authorities had offered EUR3.5 million for the CD, which is said to have been on the market since last November at least. It is touted by its current possessors to contain details of 1,000 German clients.
So far, though, Coutts is denying knowledge of the theft. ‘We have no evidence to suggest any such breach has taken place’, a spokesperson told the Associated Press newswire.
This may spell problems for US depositors as well, since there is an information sharing agreement between United States and Germany and the last time the German government purchased a disc of depositors was from Credit Suisse, which later caused the US to investigate and issue a John Doe summon to Credit Suisse.
The IRS OVDPremains in effect and offers a limited form of amnesty with manageable penalties and no prosecution.
The IRS resently released helpful FAQs. In general, these FAQs say the IRS will not penalize taxpayers who don’t owe additional taxes (even if they didn’t properly declare their foreign accounts). Just file your past due FBARs, the IRS says.
The IRS also showed some relief to dual nationals living outside the U.S., noting that a new relief program’s details would be out by September 1, 2012. But on a more threatening note, the IRS says it can rule taxpayers ineligible for the IRS amnesty program.

If you have UNREPORT FOREIGN INCOME, 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

Tax amnesty offered to Americans in Mexico

July 16, 2012

The U.S. Internal Revenue Service said it will waive potentially massive penalties for certain “low compliance risk” tax payers who opt to come clean.

The IRS is aware that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs). Some of these taxpayers have recently become aware of their filing requirements and want to comply with the law.

To help these taxpayers, the IRS offered the new procedures that will allow taxpayers who are low compliance risks to get current with their tax requirements without facing penalties or additional enforcement action. These people generally will have simple tax returns and owe $1,500 or less in tax for any of the covered years. The new procedure will go into effect on Sept. 1, 2012.

To qualify, individuals must submit three years of back taxes, six years of bank reporting forms – so-called Report of Foreign Bank and Financial Accounts, or FBARs – and a signed letter explaining why they haven’t filed.

The IRS defines low risk as people who have “simple” returns and owe less than $1,500 a year in taxes, based on the past three tax years. To owe less than $1,500 in US Tax, assuming a Single Filing Status and 1 Personal Exemption, your combined income would have to be less than $22,650.

This helps Certain “Low Risk” Americans who live in Mexico.  It also applies to Americans who live in Mexico and who pay Mexican Taxes on their World Wide Income and who use a US "Foreign Tax Credit" to reduce their US Tax to $1500.


Example: A US Citizen can earn interest of between 1% – 3%, on principle of between $755,000 – $2,265,000 and still qualify for this US amnesty (see chart below); even where this income may not have be subject to Canadian taxation.

Rate of Interest
Principle
Income
0.01
$2,265,000
$22,650
0.015
$1,510,000
$22,650
0.02
$1,132,500
$22,650
0.025
$906,000
$22,650
0.03
$755,000
$22,650


The United States is unique among developed countries in requiring all citizens, including dual Mexican-Americans, to file taxes with the IRS every year, regardless of where they live.

Without the amnesty, Americans who haven’t filed their taxes and other IRS forms face penalties totalling tens of thousands of dollars per year and risk criminal prosecution. See IR-2012-64for more details.

If you would like to avail yourself of this new Amnesty, 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

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