Category Archives: From Live Blog

On November 22, 2017 we posted 146 Offshore Banks & Now Financial Advisors Are Turning Over Your Names To The IRS - What Are Your Waiting For? and since then the Government has add NPB Neue Privat Bank AG (effective 7/18/18 ) and Mirelis Holding S.A., formerly known as Mirelis InvestTrust S.A. (effective 7/27/18) to this list bringing the number to 148 Offshore Banks and Foreign Financial Advisors.

The IRS keeps updating its list of foreign 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). This penalty is based on the highest account balance measured over up to eight years. 

 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.

These Banks, Financial Instructions and Foreign Financial Advisors  have made substantial efforts to cooperate with the IRS investigation, including by:

1. facilitating interviews that their Office with employees, including top level executives;
2. voluntarily producing documents in response to the Office’s requests;
3. providing, in response to a treaty request, unredacted client files for the U.S. taxpayer-clients who maintained accounts at their Banks or Financial Instruction; and
4. committing to assist in responding to a treaty request that is expected to result in the production of un-redacted client files for U.S. taxpayer-clients who maintained accounts at these Banks and Financial Instructions and with these Foreign Financial Advisors. 

The complete list of Offshore Banks and Foreign Financial Advisors who 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 January 31, 2017: 

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. Hyposwiss Privatbank AG reorganized as HSZH Verwaltungs AG (effective 1/27/16)
95. Bank Julius Baer & Co., Ltd (effective 2/4/16)
96. Cayman National Securities Ltd. (effective 3/9/16)
97. Cayman National Trust Co. Ltd. (effective 3/9/16)
98. Bradley Birkenfeld (effective 11/15/16)
99. Renzo Gadola (effective 11/15/16)
100. Martin Lack (effective 11/15/16)
101. Christos Bagios (effective 11/15/16)
102. Joshua Vandyk (effective 11/15/16)
103. Eric St-Cyr (effective 11/15/16)
104. Patrick Poulin (effective 11/15/16)
105. Andreas Bachmann (effective 11/15/16)
106. Josef Dörig (effective 11/15/16)
107. David Kalai and Nadav Kalai (effective 11/15/16)
108. David Almog (effective 11/15/16)
109. Hansruedi Schumacher (effective 11/15/16)
110. Matthias Rickenbach (effective 11/15/16)
111. Cem Can (effective 11/15/16)
112. IPC Management Services, LLC (effective 11/15/16)
113. IPC Corporate Services Inc. (effective 11/15/16)
114. IPC Corporate Services LLC (effective 11/15/16)
115. Titan International Securities, Inc. (effective 11/15/16)
116. Legacy Global Markets S.A. (effective 11/15/16)
117. Unicorn International Securities LLC (effective 11/15/16)
118. Andrew Godfrey (effective 11/15/16)
119. Michael Little (effective 11/15/16)
120. Edgar Paltzer (effective 11/15/16)
121. Peter Amrein (effective 11/15/16)
122. Daniela Casadei (effective 11/15/16)
123. Fabio Frazzetto (effective 11/15/16)
124. Michele Bergantino (effective 11/15/16)
125. Mario Staggl (effective 11/15/16)
126. Beda Singenberger (effective 11/15/16)
127. Gian Gisler (effective 11/15/16)
128. Felix M. Mathis (effective 11/15/16)
129. Michael Berlinka (effective 11/15/16)
130. Urs Frei (effective 11/15/16)
131. Roger Keller (effective 11/15/16)
132. Josef Beck (effective 11/15/16)
133. Hans Thomann (effective 11/15/16)
134. Stephan Fellmann (effective 11/15/16)
135. Otto Huppi (effective 11/15/16)
136. Christof Reist (effective 11/15/16)
137. Stefan Buck (effective 11/15/16)
138. Marco Parenti Adami (effective 11/15/16)
139. Emanuel Agustino (effective 11/15/16)
140. Roger Schaerer (effective 11/15/16)
141. Markus Walder (effective 11/15/16)
142. Susanne D. Rüegg Meier (effective 11/15/16)
143. Martin Dunki (effective 11/15/16)
144. Robert Bandfield (effective 11/15/16)
145. Michael A. Behr (effective 1/25/17)
146. Prime Partners SA (effective 8/15/17)
147. NPB Neue Privat Bank AG (effective 7/18/18 )
148. Mirelis Holding S.A., formerly known as Mirelis InvestTrust S.A. (effective 7/27/18)

Outside of these banks and financial advisors, 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 145 Foreign Banks and Financial Advisors listed above 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 roughly 145 Foreign Banks and Financial Advisors cooperating with the DOJ & IRS 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 Offshore Banks or 

Financial Advisors?

 

 

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.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

When the IRS announced that it was ending the program, it noted that taxpayers “who still wish to come forward have time to do so.” It has been widely assumed that this meant that taxpayers had until September 2018 to take full advantage of the program if they so choose.

Now according to Law360 that is no longer true. Until recently, taxpayers could confirm their eligibility for the program before providing the IRS evidence of potential criminal violations and, per the IRS announcement, such taxpayers had until the end of August to do so. Now, due to processing delays of up to three months for requests already made, the deadline for taxpayers to confirm their eligibility has already passed. Without some extension of the September deadline by the IRS, a taxpayer can only attempt to enter the program blind, risking exposing criminal activity to the IRS without receiving immunity in return.

In order to be eligible to participate in OVDP and receive the benefits of immunity and reduced penalties, taxpayers must not be already under IRS investigation, audit or exam, and their undisclosed foreign assets must not have already been disclosed to the IRS by their respective financial institutions. As taxpayers are not always aware if they are under investigation or audit, the IRS has allowed taxpayers to obtain pre-clearance letters that confirm their eligibility for the program. While it is not necessary to participate in OVDP, these letters are an important first step in participating in the program. They are not, however, an application to the OVDP program.

Every participant should try and receive a pre-clearance letter before applying. In an OVDP application, taxpayers must provide the IRS a roadmap of their potentially criminal activity. They must reveal where all the proverbial bodies are buried. The pre-clearance process gives taxpayers the peace of mind that when they give the IRS this roadmap they will not, assuming they are otherwise accepted into the program, face criminal prosecution. If they do not obtain the pre-clearance letter, having submitted the information only to find out they are ineligible, they have not only revealed their potentially criminal activity to a government already investigating them, but just handed over a trove of incriminating materials.

Prior to the announcement of OVDP's termination on September 28, 2018, a taxpayer typically received a pre-clearance letter about 2-3 weeks after requesting it. When the IRS announced it was closing the program, it updated its FAQs to indicate that participants should expect the process to take 30 days.

As one can imagine, news of the program's imminent shutdown has caused a large number of taxpayers to begin the process of obtaining pre-clearance letters, a development that appears to have caught the IRS off guard. Agents handling such requests have been telling potential applicants that the process is so delayed that they should not expect to receive a pre-clearance letter for two to three months.

While not saying it directly, if taxpayers want to proceed with a voluntary disclosure under OVDP, they may do so without the protections afforded by a pre-clearance letter. They must run the risk of providing the government every piece of information necessary to prove criminal charges against them only to find out that the government is already investigating them.

This issue is entirely fixable by the IRS. They could, for example, extend the deadline for applicants in light of these delays. They could allow taxpayers to file their OVDP applications within a certain period of time after receiving the pre-clearance letter so long as the request for a pre-clearance letter was filed before the Sept. 28, 2018, deadline.

It is unlikely the IRS will extend these deadlines or take any other measures to fix these delays. The IRS’ rationale for ending the program was that by this point, taxpayers “have had several years to come into compliance with U.S. tax laws under the OVDP Program.  In other words, the IRS is unlikely to sympathize with taxpayers who have waited until now to proceed with a disclosure.

Every OVDP applicant is different and each must decide for himself or herself whether to take the risk of filing an application without a pre-clearance letter. At its core, the OVDP program provides certainty. Participants know that they will not face criminal liability for their past actions. They pay reduced penalties, taxes and interest and are able to move forward with their lives unencumbered by their IRS tax issues. Now, however, in hopes of obtaining that certainty, taxpayers must assume some additional risk.

Some potential OVDP participants will choose to proceed with the disclosure because to them the potential benefit of future certainty outweighs the risk of potential ineligibility. To others, the fear of showing the government all the skeletons in their closest without assurances they will receive the benefits of immunity will prove too much for them.

Each taxpayer should consult with an Experience Tax Attorney, to advise them regarding their choices for addressing their previously undisclosed foreign income, who can inform them of the risks and benefits of each path forward.

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.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

According to Law360, Swiss bank Zürcher Kantonalbank has agreed to pay $98.5 million after admitting to helping U.S. clients dodge taxes by letting them stash money in undeclared accounts that used code names and shell companies, Manhattan federal prosecutors announced on August 13, 2018.

ZKB will hand over the amount as part of a deferred prosecution agreement, which the bank reached after admitting to helping U.S. clients collectively avoid paying more than $39 million in U.S. taxes between 2002 and 2013, according to prosecutors. The bank would have been given more credit for cooperating with the government if it hadn’t dissuaded two indicted employees from reaching out to the U.S. Attorney’s Office, prosecutors said.

Those two bankers, Stephan Fellmann and Christof Reist, were originally indicted on felony charges and pled guilty to misdemeanor charges on August 13, 2018.

“The Substantial Financial Penalties Imposed on the Bank, and the Two Bankers’ Pleas, Should Make Clear That Helping US Taxpayers to Be Tax Evaders Will Not Be Tolerated,” Manhattan U.S. Attorney Geoffrey S. Berman said in a statement. 

If ZKB abides by the agreement, which includes a requirement to turn over information about the U.S. client accounts, the government said it will defer prosecution on the information for three years and then seek to dismiss the charges.

According to the prosecutors’ statement, ZKB helped U.S. clients dodge taxes by opening and maintaining undeclared accounts, including by allowing the clients to be identified by a code word instead of by name. The bank also allowed U.S. clients to maintain accounts held in the names of non-U.S. entities, some of which were sham structures existing solely to hide offshore assets, prosecutors said.

At ZKB’s “high-water mark” in 2008, the bank held approximately $794 million in assets relating to undeclared accounts held by U.S. clients, according to the statement.

ZKB’s external asset manager desk “treated UBS’ decision to stop accepting U.S. taxpayer-clients as a business opportunity, and actively sought to increase its U.S. taxpayer-client base,” according to the prosecutors’ statement.

In December 2012, three ZKB bankers: Fellmann, Reist and Otto Hüppi, were charged in a New York federal court with conspiracy to defraud the U.S. and the IRS for their role in ZKB’s conduct, according to prosecutors.

Fellmann, whose name is spelled “Fellman” in the case name and Reist are scheduled to be sentenced Nov. 30 and face up to one year in prison. Hüppi remains at large.

The case is USA v. Fellman et al., case number 1:12-cr-00962, in the U.S. District Court for the Southern District of New York.

Have Undeclared Income from an Offshore Account?
 

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.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

 



 

The new deduction, referred to as the Section 199A deduction or the deduction for qualified business income, was created by the Tax Cuts and Jobs Act. The deduction is available for tax years beginning after Dec. 31, 2017. Eligible taxpayers can claim it for the first time on the 2018 federal income tax return they file next year.

The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers. It’s generally equal to the lesser of 20 percent of their qualified business income plus 20 percent of their qualified real estate investment trust dividends and qualified publicly traded partnership income or 20 percent of taxable income minus net capital gains.

Deductions for taxpayers above the $157,500/$315,000 taxable income thresholds may be limited. Those limitations are fully described in the proposed regulations.

Qualified business income includes domestic income from a trade or business. Employee wages, capital gain, interest and dividend income are excluded.

In addition, Notice 2018-64, also issued on August 8, 2018, provides methods for calculating Form W-2 wages for purposes of the limitations on this deduction.

Taxpayers may rely on the rules in these proposed regulations until final regulations are published in the Federal Register.

 

 

We Can Advise on How These Tax Cuts Can Benefit You!

 

Contact the Tax Lawyers at 

Marini & Associates, P.A.  

 

 

for a FREE Tax Consultation Contact us at:

www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243