IRS Announces New Investigative Units

- By : P. Patel

In a press call on August 2, 2017, the Chief of the Internal Revenue Service’s (IRS) Criminal Investigation Division (“IRS-CI” or CID), John D. Fort, announced two new enforcement initiatives: a National Coordinated Investigations Unit and an International Tax Enforcement Group. Fort also explained that the Criminal Investigation division is—and will be—increasingly focusing on the

Avoiding and Defining Willfulness

- By : P. Patel

U.S. taxpayers with unreported foreign accounts or assets are in a challenging position. The IRS has repeatedly announced that it is devoting resources to finding and penalizing taxpayers who do not disclose such offshore accounts and assets. In addition, many U.S. taxpayers, both domestic and international, are facing pressure from foreign banks to disclose their U.S. taxpayer

ABA Conference with Government Officials

- By : P. Patel

The ABA recently held a conference titled National Institute on Criminal Tax Fraud and Institute on Tax Controversy.  I attended the conference where many tax attorneys and government officials discussed issues of interest. Also discussed was the effect of streamlined program to channel most taxpayers into streamlined rather than OVDP.  Government official John McDougal said

New IRS IRM with Updated Streamlined Filing Compliance procedures

- By : P. Patel

The Internal Revenue Manual (IRM) is essentially the IRS employee handbook on how to carry out all administrative and procedural matters, such as how to audit specific tax returns, collect taxes, process returns, or assess penalties. The IRM may be the most important tool provided to IRS employees as it contains vital information to help

IRS Collects $10 Billion From Voluntary Disclosures of Foreign Assets

- By : P. Patel

The Internal Revenue Service’s efforts to prod taxpayers to disclose their offshore bank accounts and pay taxes on their holdings have reached the $10 billion mark and prompted over 100,000 taxpayers to come forward, the IRS said last Friday in a public statement. The latest figures indicate 55,800 taxpayers have entered the IRS’s Offshore Voluntary

Delinquent or unfiled IRS Form 5471

- By : P. Patel

IRS Form 5471 is a form required to be filed by US owners of foreign corporations. The form and filing requirements are complicated, and the penalties and consequences for non-filing are extreme. A taxpayer who has not been already contacted by the government should immediately take steps to cure the noncompliance because the IRS has increased

Happy Birthday Streamlined Filing Compliance Procedure!

- By : P. Patel

The Streamlined Filing Compliance Procedure (SFCP) was “born” two years old.  Two years ago the IRS publicly announced the SFCP, which has been used by many non-compliant US taxpayers with the disclosure of foreign assets. SFCP has two sub-programs: one for US residents (Streamlined Domestic Offshore Procedures or “SDOP”) and one for non-US residents (Streamlined

New Leak of Offshore Accountholders Highlights the Need to Clean Up

- By : P. Patel

The U.S. Justice Department is reviewing reports about the offshore financial arrangements of global politicians and public figures based on 11.5 million leaked files from Panamanian law firm Mossack Fonseca, a department spokesman said yesterday. The department is determining whether the findings point to evidence of corruption and other violations of U.S. law. “The U.S.

Streamlined Filing Compliance Procedure’s New Revisions to Streamlined Domestic Offshore Procedures (SDOP)

- By : P. Patel

In the midst of tough tax season, many U.S taxpayers are unfortunately surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their tax and reporting obligation, there are a number of programs through which they can become compliant. One option, if the taxpayers

Streamlined Filing Compliance Procedure’s New Revisions to Streamlined Foreign Offshore Procedures (SFOP)

- By : P. Patel

In the midst of tough tax season, many U.S taxpayers are unfortunately surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their tax and reporting obligation, there are a number of programs through which they can become compliant. One option, if the taxpayers

The Tax Heat is On

- By : P. Patel

At the recent American Bar Association meeting held on January 29, 2016, the acting Attorney General for the tax division disclosed that the IRS and US Department of Justice are now focusing bank investigations in Belize, the British Virgin Islands, Cayman Islands, the Cook Islands, India, Israel, Liechtenstein, Luxemburg, the Marshall Islands and Panama, to

New IRS guidance Announced for IRS Streamlined Offshore Procedures.

- By : P. Patel

In the midst of tough tax season, many U.S taxpayers are unfortunately surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their tax and reporting obligation, there are a number of programs through which they can become compliant. One option, if the taxpayers

ABA COMMENTS ON THE 2014 OFFSHORE VOLUNTARY DISCLOSURE PROGRAM AND THE STREAMLINED PROGRAMS

- By : P. Patel

We are members of the American Bar Association Section of Taxation, which recently submitted comments to the IRS on the IRS Offshore Voluntary Disclosure Program (“OVDP”), the Streamlined Domestic Offshore Program (“SDOP”), and the Streamlined Foreign Offshore Program (“SFOP”). The comments are very constructive and excellent. It is hped that the IRS carefully considers and adopts many

IRS Announces New Statistics Regarding Voluntary Disclosures

- By : P. Patel

Since the initiation of the U.S. Internal Revenue Service’s (IRS) Offshore Voluntary Disclosure Program (OVDP) which originally began in 2009 and the Streamlined Filing Compliance Procedures first offered on September 1, 2012, the IRS recently reported that more than 54,000 taxpayers have come forward  and the result is more than $8 billion in  tax collections. The Streamlined Filing Compliance

Offshore Compliance Programs Generate $8 Billion; IRS Urges People to Take Advantage of Voluntary Disclosure Programs

- By : P. Patel

The IRS issued the below interesting press release last week… IR-2015-116, Oct. 16, 2015 WASHINGTON — With more than 54,000 taxpayers coming in to participate in offshore disclosure programs since 2009, the Internal Revenue Service today reminded U.S. taxpayers with undisclosed offshore accounts that they should strongly consider existing paths established to come into full compliance

IRS Announces Key Milestone in FATCA Implementation; U.S. Begins Reciprocal Automatic Exchange of Tax Information under Intergovernmental Agreements

- By : P. Patel

IR-2015-111, Oct. 2, 2015 WASHINGTON — The Internal Revenue Service today 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

IRS delinquent FBAR submission procedure

- By : P. Patel

Last spring, the IRS revised its program for delinquent FBAR returns. The IRS offers a new “delinquent FBAR submission procedure”.  See below excerpt from the IRS website.The program is available if you properly reported on your U.S. tax returns, and paid all tax on, the income from the foreign financial accounts reported on the delinquent

Correcting Common FBAR Errors

- By : P. Patel

The IRS offers four options to fix FBAR mistakes. Participation in the two formal disclosure programs is permitted only if the funds held in the foreign financial account(s) are from a legal source (and not the proceeds of an illegal activity) and if the IRS is not already in a position to know of the

How Will the IRS Find Out By Your Foreign Account? Let’s Count the Dozens of Ways

- By : P. Patel

1.      FATCA (Foreign Account Tax Compliance Act of 2009) requires disclosure of your account information. A.     July 1, 2014 FATCA withholding began. B.     FATCA requires a 30 percent withholding tax on any “withholdable payment” made either to an FFI (foreign financial institution, e.g. an offshore bank) or certain other entities if it fails to comply

Vatican Signs FATCA Agreement

- By : P. Patel

Praying may not be enough for non-compliant taxpayers (or evaders) under the Foreign Account Tax Compliance Act (FATCA).  The Vatican has become the latest FATCA signatory to share bank information with the US. The Vatican has signed an agreement with US authorities to report information about overseas accounts under the Foreign Account Tax Compliance Act

Received a FATCA Letter from Your Foreign Bank?

- By : P. Patel

If you have any US connections and have a non-U.S. bank account, you may have recently received a letter from your bank asking for your tax information. This may seem odd or new to you but lately banks everywhere want to know if you are compliant with the IRS. Basically, the entire world is helping

Educational Panel Discussion: The U.S. Government’s Global Crackdown on Tax Evasion: Where It Has Been and Where It Is Going

- By : P. Patel

Last we spoke at a SABANA tax section bar association educational panel “The U.S. Government’s Global Crackdown on Tax Evasion: Where It Has Been and Where It Is Going” for attorneys in Orlando FL. Fellow panelists included Nanette Davis (US Department of Justice Tax senior litigation counsel), Forrest Knorr (IRS Director, International Field Operations, West

Another Taxpayer Found Guilty of Failure to File FBARs and Report Foreign Income

- By : P. Patel

Raju Mukhi of St. Louis MO was indicted last year for his alleged failure to file a report to the IRS on his foreign financial accounts and for filing false tax returns. United States citizens are required to report income from foreign countries, such as bank account, securities and any other financial accounts on their

Helpful Non-willful FBAR penalty case decided by court

- By : P. Patel

For the first time, in the case of James Moore, Plaintiff v. United States of America, Defendant (James Moore v. U.S. Case 2:13-cv-02063-RAJ filed 4/1/15), we finally get a look at some non-willful FBAR penalty litigation. The US district court has essentially dismissed a taxpayer’s challenges to his penalty for failing to file FBARs (Report

A solution in a tough tax season: the IRS Streamlined Offshore Procedures

- By : P. Patel

In the midst of tough tax season, many U.S taxpayers are unfortunately surprised to discover that they have a U.S. tax reporting obligation on financial accounts or assets held overseas. Once they discover their tax and reporting obligation, there are a number of programs through which they can become compliant. One option, if the taxpayers

Hiding Money or Income Offshore Among the “Dirty Dozen” List of Tax Scams for the 2015 Filing Season

- By : P. Patel

IR-2015-09, Jan. 28, 2015 WASHINGTON — The Internal Revenue Service today said avoiding taxes by hiding money or assets in unreported offshore accounts remains on its annual list of tax scams known as the “Dirty Dozen” for the 2015 filing season. “The recent string of successful enforcement actions against offshore tax cheats and the financial

Another Customer with Unreported Offshore Bank Accounts Pleads Guilty

- By : P. Patel

George Landegger, CEO of pulp and paper company, pleaded guilty last week in New York to a federal charge of failing to file a required report to the IRS about the account. He admitted that he maintained the undeclared account worth $8.4 million at the Swiss Bank in Zurich from the early part of the

New IRS Subpoenae and IRS Data Mining Expected

- By : P. Patel

Last week a federal judge approved the IRS issuing “John Doe” summonses requiring FedEx, DHL, UPS, and numerous other intermediaries to produce information about U.S. taxpayers who used Sovereign Management & Legal Ltd. for offshore accounts and assets. They include Western Union Financial Services Inc., the Federal Reserve Bank of New York, Clearing House Payments

News from the 2014 Criminal Fraud and Tax Controversy Conference

- By : P. Patel

We just returned last week from attending the Criminal Fraud and Tax Controversy Conference in Las Vegas, sponsored by the American Bar Association Section of Taxation where many government officials were in attendance. Below are some interesting observations: On the new IRS Streamlined program (including the SDOP and SFOP programs), David Horton LB&I director for

IRS Releases Training Documents on Offshore Voluntary Disclosure Program

- By : P. Patel

last month the IRS released more than 6,500 pages from the Internal Revenue Service on the agency’s Offshore Voluntary Disclosure Program and how it trains its agents. The documents included material used in training IRS personnel in the Offshore Voluntary Disclosure Program, determining program penalties and instructing IRS employees about the program. The purpose of the OVDP