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Offshore Compliance Programs Generate $8 Billion and IRS Urges People to Take Advantage of Voluntary Disclosure Programs… You Think?

October 16, 2015

The IRS released IR-2015-116 on Oct. 16, 2015, to remind U.S. taxpayers with undisclosed offshore accounts, that with more than 54,000 taxpayers coming in to participate in offshore disclosure programs since 2009, they should strongly consider existing paths established to come into full compliance with their federal tax obligations.

Both the Offshore Voluntary Disclosure Program (OVDP) and the streamlined procedures enable taxpayers to correct prior omissions and meet their federal tax obligations while mitigating the potential penalties of continued non-compliance. There are also separate procedures for those who have paid their income taxes but omitted certain other information returns.

“The groundbreaking effort around Automatic Reporting of Foreign Accounts has given us a Much Stronger Hand in Fighting Tax Evasion,” said IRS Commissioner John Koskinen.
“People with Undisclosed Foreign Accounts should carefully consider their Options and use Available Avenues, including the Offshore Program and Streamlined Procedures, to come back into full compliance with their tax obligations.”

Under the Foreign Account Tax Compliance Act (FATCA) and the network of intergovernmental agreements (IGAs) between the U.S. and partner jurisdictions, automatic third-party account reporting began this year, making it less likely that offshore financial accounts will go unnoticed by the IRS. We previously posted FATCA - U.S. Began Reciprocal Automatic Exchange of Tax Information On Sept. 30, 2015!, where we discussed that the Internal Revenue Service announced the exchange of financial account information with certain foreign tax administrations, meeting a key Sept. 30 milestone related to FATCA, the Foreign Account Tax Compliance Act.

 
To achieve this, the IRS successfully and timely developed the information system infrastructure, procedures, and data use and confidentiality safeguards to protect taxpayer data while facilitating reciprocal automatic exchange of tax information with certain foreign jurisdiction tax administrators as specified under the intergovernmental agreements (IGAs) implementing FATCA.

"Meeting the Sept. 30 deadline is a Major Milestone
in IRS Efforts to Combat Offshore Tax Evasion through FATCA and the Intergovernmental Agreements," 
said IRS Commissioner John Koskinen. 

In addition to FATCA and reporting through IGAs, the Department of Justice’s Swiss Bank Program

continues to reach non-prosecutionagreements with Swiss financial institutions that facilitated past non-compliance. As part of these agreements, banks provide information on potential non-compliance by U.S. taxpayers. Potential civil penalties increase substantially if U.S. taxpayers associated with participating banks wait to apply to OVDP to resolve their tax obligations.  

OVDP offers taxpayers with undisclosed income from offshore accounts an opportunity to get current with their tax returns and information reporting obligations. The program encourages taxpayers to voluntarily disclose foreign accounts now rather than risk detection by the IRS at a later date and face more severe penalties and possible criminal prosecution. 

Since OVDP began in 2009, 
there have been more than 54,000 disclosures. 


The IRS has collected more than
$8 billion from this initiative.  
 

The streamlined procedures, initiated in 2012, were developed to accommodate a wider group of U.S. taxpayers who have unreported foreign financial accounts but whose circumstances substantially differed from those taxpayers for whom the OVDP requirements were designed. More than 30,000 taxpayers have used streamlined procedures to come back into compliance with U.S. tax laws. Two-thirds of these have used the procedures since the IRS expanded the eligibility criteria in June 2014.
 
Separately, based on information obtained from investigations and under the terms of settlements with foreign financial institutions, the IRS has conducted thousands of offshore-related civil audits that have produced tens of millions of dollars. The IRS has also pursued criminal charges leading to billions of dollars in criminal fines and restitution.
 
The IRS remains committed to stopping offshore tax evasion wherever it occurs.  Even though the IRS has faced several years of budget reductions, the agency continues to pursue cases in all parts of the world.

Do You Have Undeclared Income from A Foreign Banks 
Which is Delivering Names to the IRS?

Do You Value Your Freedom?

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

Bank Leumi Executives to Repay Bonuses as a Result of U.S. Tax Deal.

October 13, 2015

We previously posted "Bank Leumi to Face $300 Million Settlement Option to Close an Investigation Regarding Their Aiding Americans to Evade Taxes:" now we know that Bank Leumi's non-prosecution deal with the US Department of Justice requires it to also disclose the identities of 1,500 American account holders to the Internal Revenue Service. US citizens with undisclosed accounts at the Israeli bank may now be at risk of civil penalties, prosecution and disqualification from the US' offshore voluntary disclosure program.  
 
Leumi reported that it is the first Israeli bank to reach a settlement with U.S. authorities. The agreement with the DoJ requires the Bank Leumi Group to pay a fine of $270 million. The agreement with the DFS requires the Bank Leumi Group to pay a fine of $130 million. As part of the DoJ agreement, the Bank Leumi Group has provided to the Internal Revenue Service (IRS) the names of more than 1,500 U.S. account holders.

 
Now three former senior executives at Bank Leumi will return part of the bonuses they received after Israel's second largest bank agreed a $400 million settlement with U.S. tax authorities. An independent committee set up to examine the conduct of the bank's board and senior management recommended the three executives return 11 percent of the bonuses they received for the 2002-2010 period, a total of 5.1 million shekels ($1.3 million).
In addition, the committee recommended that the bank recoup $92 million from insurance policies covering board actions. Leumi said its board has decided to accept all of the committee's recommendations and have submitted them to Tel Aviv District Court for approval.
 
“The insurance settlement payment will reduce the damage to Leumi from the fines paid and will positively impact its financial results,” Meir Slater, head of research at Bank of Jerusalem Ltd. in Tel Aviv, said by phone. “The panel’s message is that just that as executives get compensated for their good work, they have to take responsibility for the negative results of their actions.”
 
The three people are:
 
  1. Former chief executive Galia Maor,
  2. Former chairman Eitan Raff and
  3. Former head of its international private banking division Zvi Itskovich.
 
Maor will pay back the largest amount, 2.6 million shekels. The three former executives have informed the committee they agree to repay the amount requested in order to bring the matter to a close.
 
U.S. persons with undisclosed accounts at Bank Leumi (and others) face potentially stiff financial consequences and, in some cases, the risk of prison. 

There are many unknowns in this new environment (e.g., which individuals are among the 1,500 disclosed accounts, who will be exposed to criminal prosecution, what the civil penalties will be in the civil examinations, will the streamlined programs be available, etc.). However, one thing is apparent: The U.S. government will likely be relentless in its pursuit of U.S. persons with undisclosed accounts, and those who defer disclosure may face ever-increasing adverse consequences. 

Have Un-Reported Income From
a Bank Leumi Offshore Bank Account?
 
Protect Yourself from 325% Fines and Possible Jail Time. 

Contact Our Experienced Tax Attorneys to Find out
if the OVDP Program or Streamline Program is Right for You?


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

Source:
 
 
 
 
 
 




 

Read more at: Tax Times blog

DoJ is Following The Money Trail Disclosed By Swiss Bank's to Singapore and Israel!

October 10, 2015

On October 9, 2015 we posted OVDP Penalty Increased To 50% For 55 Foreign Banks Asset Management Firms! which  supplements our earlier post OVDP Penalty Increased To 50% For 50 Foreign Banks! , where we discuss that in accordance with the terms of the Swiss Bank Program, each bank mitigated its penalty by encouraging U.S. account holders to come into compliance with their U.S. tax and disclosure obligations.  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 (a/k/a Levers List);
  • Agree to close accounts of account holders who fail to come into compliance with U.S. reporting obligations; and
  • Pay appropriate penalties.

Banks meeting all of the above requirements are eligible for a non-prosecution agreement.

“With each Additional Agreement, 
the World where Criminals can Hide Their Money 
is Becoming Smaller and Smaller. 
 
Those Who Circumvent Offshore Disclosure Laws
Have Little Room to Hide.”
said Chief Richard Weber of IRS-Criminal Investigation.  


Now Bloomberg reports that the flood of information is now giving U.S. investigators intelligence to try to build new cases against individuals and institutions in other countries, said Caroline Ciraolo, the Justice Department’s top tax prosecutor. Financial institutions in Singapore and Israel are possible targets, according to lawyers and prosecutors.

“The money is moving out of Switzerland to a variety of jurisdictions,” said Ciraolo, an acting assistant attorney general.
 
“We’re following leads and following the money, wherever that leads us.”




U.S. agents interviewed taxpayers who used a Singapore money management firm to hide assets from the IRS, said Bryan Skarlatos and Scott Michel, lawyers who separately represent some of those Americans. They wouldn’t identify the firm, and Ciraolo wouldn’t discuss it.

 
“Certainly, Singapore would be one of the jurisdictions that we’re looking at,” Ciraolo said.
 

Societe Generale SA’s Swiss private banking unit admitted in its settlement that it transferred assets of U.S. customers to “corporate and individual accounts at other banks in Switzerland, Hong Kong, Israel, Lebanon, Liechtenstein and Cyprus,” according to its statement of facts. The unit paid a $17.8 million fine.  A bank spokesman declined to comment.

In its settlement document, Banque Pasche SA said that client money was transferred to banks located in Israel and Hong Kong “in an attempt to further escape detection.”  An e-mail and phone call to the bank weren't returned.
 
 
 

We previously posted the various IRS problems with Israeli Banks:

The data coming directly from Swiss banks are supplementing a separate trove the IRS gathered from 50,000 U.S. taxpayers who disclosed their offshore accounts and paid $7 billion in back taxes, fines and penalties since 2009.
 
Many US taxpayers disguised their money in entities set up in tax havens outside of Switzerland. Of 54 banks that settled:
 
  • 18 held assets in corporations, foundations or trusts in Liechtenstein;
  • 15 in Panama;
  • 11 in the British Virgin Islands, and
  • 4 in Hong Kong.

The DOJ is getting some very valuable information served up on a silver platter as a result of the OVDP program and its non-prosecution agreements with Swiss banks. 
 
With roughly 96 Swiss banks taking the DOJ deal and FATCA requiring the entire world to report to the IRS resulting in increasing disclosures, everyone American is eventually going to be 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 the Foreign Bank?
 
 
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

OVDP Penalty Increased To 50% For 55 Foreign Banks Asset Management Firms!

October 9, 2015

On September 21, 2015  we posted "OVDP Penalty Increased To 50% For 50 Foreign Banks!" well now make 55 (54 Banks +1 Asset Management Firm) including "The 1st Swiss Asset Management Firm To Turn Over Names of US Clients Over to the IRS!" 

The DoJ announced on October 8, 2015 that Schaffhauser Kantonalbank (SHKB) has reached a resolution and is turning over names of its US depositors! 
 
The IRS keeps updating its list of foreign banks where the holders of these offshore accounts are subject to a 50% (rather than 27.5%) penalty in the IRS’s Offshore Voluntary Disclosure Program (OVDP). This penalty is based on the highest account balance measured over up to eight years. 

 
The complete list is as follows, as of 10/8/15: 
  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. Schaffhauser Kantonalbank (effective 10/8/15
  55. Finacor SA (effective 10/1/15) 
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 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.
 
With roughly 96 Swiss banks taking the DOJ deal and FATCA requiring the entire world to report to the IRS resulting in increasing disclosures, everyone American is eventually going to be 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

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