IRS Announces New Clarifying FAQs for Streamlined Offshore Compliance Program

- By : P. Patel

The IRS updated its streamlined offshore compliance program to provide procedures taxpayers residing both inside and outside the United States should use to participate in the program. The streamlined offshore compliance program is for taxpayers whose failure to comply with requirements to report offshore assets is nonwillful. It is designed to allow U.S. taxpayers with offshore assets to

IRS Releases FAQs for the Delinquent International Information Return Submission Procedures

- By : P. Patel

The IRS recently released frequently asked questions for the Delinquent International Information Return Submission Procedures (available here). The IRS now states that these procedures are available to taxpayers even if they have unreported income. See below quote: The Delinquent International Information Return Submission Procedures clarify how taxpayers may file delinquent international information returns in cases where

New Report: Delinquent Taxpayers Could be Identified at US Border Crossings

- By : P. Patel

The Internal Revenue Service’s collection efforts need to be improved to make sure that delinquent taxpayers residing in foreign countries comply with their U.S. tax obligations, according to a new government report. The report, from the Treasury Inspector General for Tax Administration (TIGTA), comes amid the implementation of many of the requirements of the Foreign Account

Major changes to IRS offshore voluntary compliance programs

- By : P. Patel

Many clients are asking our office about the new compliance solutions to clean up past errors in disclosing foreign assets. In June 2014, the IRS announced major changes to its offshore voluntary compliance programs, providing new options to help taxpayers residing both overseas and in the United States. The changes are intended to give thousands

Watch Out for Letters From Your Foreign Bank Requesting Information On Your U.S. Residency

- By : P. Patel

Numerous foreign banks are sending letters to their customers demanding personal information to ascertain whether the customer is a U.S. citizen or a U.S. resident. The foreign banks typically state they are required to obtain such personal information pursuant to the U.S. Foreign Account Tax Compliance Act (“FATCA”) FATCA requires that foreign banks submit information to the United States government on

Citizenship renunciation fee increases as American expatriates flee FATCA

- By : P. Patel

US government fees charged to Americans for renouncing their citizenship will rocket from $450 to $2,350 on September 12, 2014. The fivefold increase is probably related to the recent dramatic rise in renunciations triggered by the US Foreign Account Tax Compliance Act. FATCA forces foreign banks and other institutions to report their US clients’ financial doings

New IRS internal procedure guidance for Streamline Filing Compliance Procedures

- By : P. Patel

The IRS has published new IRS internal procedure guidance with IRM changes dated 8/13/14.  The guidance is numbered WI-21-0814-1244 and titled “Streamline Filing Compliance Procedures for Accounts Management International IMF”.  The guidance is here. The general legal rule is that IRM provisions are for the IRS’s internal guidance and confer no rights on the taxpayer. There

Streamlined Procedures for U.S. Taxpayers Residing In the United States

- By : P. Patel

Many of our clients are interested in the new Streamlined Filing Compliance Procedures, which were recently announced by the IRS. Therefore, we are providing more general information on the Procedures. General Eligibility: The modified Streamlined Filing Compliance Procedures are designed for only individual taxpayers, including estates of individual taxpayers. The streamlined procedures are available to both U.S.

IRS Official Provides Insights for the new IRS Streamlined Compliance Procedures

- By : P. Patel

Taxpayers who are in the Offshore Voluntary Disclosure Program to report their overseas assets can request the favorable penalty structure under newly expanded streamlined compliance procedures without giving up the audit and criminal liability protection offered by the OVDP, according to Jennifer Best, senior adviser to the IRS deputy commissioner (International). The IRS June 18

How to Demonstrate Non-Willfulness Under The Streamlined Filing Compliance Procedures

- By : P. Patel

The IRS recently announced Streamlined Filing Compliance Procedures in an effort to encourage U.S. taxpayers to come into compliance with their reporting and filing requirements associated with varying interests in foreign financial accounts and assets. The streamlined procedures require the filing of original or amended tax returns reporting whatever foreign source income was generated in

Taxpayer’s Beware: Proving Non-Willful Conduct in the new IRS Streamlined Filing Compliance Procedures

- By : P. Patel

Taxpayers should think carefully before entering a new Internal Revenue Service program titled Streamlined Filing Compliance Procedures for offshore-account holders whose conduct was not “willful”. On June 18th, the IRS announced significant changes to its limited-amnesty programs for U.S. taxpayers holding undeclared offshore accounts abroad. These offshore-account holders now can opt for a new “streamlined

IRS announces new Streamlined Filing Compliance Procedures

- By : P. Patel

The IRS announced substantial changes to both the Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer Taxpayers and the Offshore Voluntary Disclosure Program (OVDP) on June 18, 2014.  Effective July 1, 2014, the IRS is making it easier for individuals to qualify for the new Streamlined Procedures. Taxpayers may now qualify under two scenarios: 1. U.S.

50% Penalty for Taxpayers Who Hold Accounts at a Bank Under Investigation

- By : P. Patel

The Internal Revenue Service announced last week changes to its programs for taxpayers with undeclared offshore accounts, the latest step in a five-year campaign against such accounts held by U.S. taxpayers. The modifications greatly eased penalties for people who were unaware of tax and disclosure requirements. At the same time, the IRS sharply increased the penalty

New IRS Disclosure Program Announced for Non-Resident Taxpayers: Streamlined Foreign Offshore Procedures

- By : P. Patel

The United States’ IRS is moving to entice more taxpayers to disclose their unreported assets and income just weeks before implementation of the U.S. Foreign Account Tax Compliance Act (FATCA).  The IRS has announced a Streamlined Foreign Offshore Procedures (SFOP), which will significantly alter all future voluntary disclosures. The SFOP is a game changer for

IRS Announces Major New changes to the Offshore Voluntary Disclosure Program

- By : P. Patel

The IRS today made significant changes to its offshore voluntary compliance programs, with the intent of providing new options to help both taxpayers residing overseas and those residing in the United States. The agency says the changes are anticipated to provide thousands of people a new avenue to come into compliance with their U.S. tax obligations.

New Streamlined Domestic Offshore Procedures (SDOP) is a Game Changer

- By : P. Patel

The IRS has announced a Streamlined Domestic Offshore Procedures (SDOP), which will significantly alter all future voluntary disclosures. The SDOP is a game changer for residents and non-resident (who would use the Streamlined Foreign Offshore Procedures (SFOP)) taxpayers alike. The SDOP liberalizes the old rules and rewards non-willful taxpayers to disclose offshore assets with minimal

Swiss Banks’ Deadline to Disclose Information is Extended

- By : P. Patel

The U.S. Department of Justice last Thursday issued a release stating that it extended for one month the deadline for so-called category two Swiss banks suspected of helping wealthy Americans evade taxes to turn over information by one month. We have previously posted on the U.S. Justice Department’s program offered to Swiss banks and targeted to identifying

Most Swiss banks participating in the US Department of Justice (DOJ) amnesty program seek extension to disclose

- By : P. Patel

By April 30, 2014, unless granted a 60-day extension, all Swiss banks participating in the US Department of Justice (DOJ) amnesty program will be required to provide substantial client information on its US account holders.  We have previously posted on the U.S. Justice Department’s program offered to Swiss banks and targeted to identifying U.S. taxpayers

Cayman Islands Advisors Arrest Suggest U.S. Government Receiving More Information About Offshore Accounts

- By : P. Patel

According to a DOJ Tax Press Release, here, the IRS has arrested a U.S. Citizen and two Canadian citizens who offered enabler services to U.S. taxpayers.  They were caught in a classic IRS sting operation.  Here is a summary of the facts: Joshua Vandyk, a U.S. citizen, and Eric St-Cyr and Patrick Poulin, Canadian citizens, were

US DOJ Tax Asst Attorney General Keneally Reports that One third of Swiss Banks Joining US DOJ Swiss Bank Program

- By : P. Patel

We have previously posted on the U.S. Justice Department’s program offered to Swiss banks and targeted to identifying U.S. taxpayers that have not disclosed foreign accounts to the IRS.  It has now been stated that that one-third of all Swiss banks offered amnesty actually applied to the program. Kathryn Keneally, Assistant Attorney General for the

U.S. Signs FATCA Pacts with Malta, Netherlands, Bermuda, Jersey, Guernsey and Isle of Man

- By : P. Patel

Last week, the U.S. signed six more intergovernmental agreements with a half dozen jurisdictions, including several traditional offshore tax havens, to implement the Foreign Account Tax Compliance Act, or FATCA. Over the past week, the U.S. Treasury Department has signed intergovernmental agreements to implement FATCA with Malta, the Netherlands, the Islands of Bermuda, and three United Kingdom Crown

Argue for No Penalty and a Warning Letter for FBAR Violations

- By : P. Patel

The IRS may send a warning letter in lieu of asserting penalties for failure to file a Form TD F 90-22.1, “Report of Foreign Bank and Financial Accounts,” if it would be sufficient to bring the individual into compliance, an IRS official recently said. Jason Kuratnick, IRS associate area counsel (Philadelphia), Small Business/Self-Employed Division, explained

Method to Cure Delinquent or Incomplete Foreign Information Returns Without Penalties

- By : P. Patel

Last year, the IRS announced its third offshore voluntary disclosure initiative. Like the earlier initiatives, the 2012 OVDP is designed to encourage taxpayers with unreported offshore accounts and assets to voluntarily disclose them to the IRS. The 2012 OVDP is available to individuals and entities, including corporations, partnerships and trusts. Unlike the previous initiatives, this

IRS Announces New Rules for FBAR Penalties

- By : P. Patel

There are two types of penalties applicable to FinCEN  Form 114 (Report of Foreign Bank and Financial Accounts) (FBARs):  (1) Non-Willful and (2) Willful.  The penalties are theoretically assessed per account and not per FBAR; however, in practice, our firm has seen application on a per FBAR filing.  Additionally, the penalties are assessed for each

New FinCEN Form 114 (FBAR) Filing Rules Announced

- By : P. Patel

Responding to the needs of many filers who submit Reports of Foreign Bank and Financial Accounts (FBARs) jointly with spouses, or wish to submit them via third-party preparers, the Financial Crimes Enforcement Network (FinCEN) today introduced FinCEN Form 114(a), Record of Authorization to Electronically File FBARs. A copy of this form would be maintained by

Foreign Account Tax Compliance Act (FATCA) online registration program is launched

- By : P. Patel

The Internal Revenue Service on Monday launched an online registration program for the hundreds of thousands of financial firms around the world that must comply with a U.S. anti-tax evasion law or risk being shut out of financial markets. Starting the registration process, which is accessible on the IRS website, was one of the last

IRS Offshore Voluntary Disclosure Programs Continue to Burden “Benign Actors” and Damage IRS Credibility

- By : P. Patel

The Taxpayer advocate has issued a new mid-year 2013 report. The portion that relates to the IRS’s OVDI/P initiatives is posted below (footnotes and tables omitted). The IRS offered a series of offshore voluntary disclosure (OVD) programs to settle with taxpayers who had failed to report offshore income and file one or more related information

Reasons to Opt Out of the 2011 OVDI Program

- By : P. Patel

Top 4 Reasons to Opt Out of the 2011 OVDI Program 1. The IRS Taxpayer Advocate’s Report: Although the IRS has not closed very many opt-out cases, the average civil FBAR penalty assessed against those opting out of the 2009 OVDP is only $15,737.19 on average. This average is according to the IRS’ response to TAS information

Opt Out of OVDI Program Penalties to Get a Lower Penalty

- By : P. Patel

Under the 2011 Offshore Voluntary Disclosure Initiative (OVDI) or 2012 Offshore Voluntary Disclosure Program (OVDP), the 2012 program gives no discretion to the IRS agents to reduce penalties. If a participant does not believe that he or she should have to pay the 27½% penalty, their only choice is to “opt out” of the program,

HSBC Bank Expects Significant Penalties from US Government for Violations

- By : P. Patel

Global bank HSBC has said it may face “significant” penalties from the US authorities with regard to an ongoing probe into suspected tax evasion by the US-based clients of its Indian unit, among other cases. The US tax department is investigating possible evasion of federal income taxes by the American residents of Indian origin through