Articles Posted in Tax Litigation and Tax Controversy

The hearing on the tax fraud through the use of tax fraud. Generally, under the terms of the existing treaty with Switzerland, the IRS must have evidence of tax evasion before the Swiss will turn over Swiss bank accounts at UBS. According to offshore financial account must report that TD F 90-22.1 Foreign Bank Account Report (FBAR) form.

The key question that remains is whether the announcement suggests that individuals with tax amnesty, or continue to hope that UBS will not be forced to turn over the names.

Given the potential for tax fraud; not to mention an offshore bank account, this question can only be answered after consultation with a knowledgeable tax litigation attorney at the Brager Tax Law Group, please give us a call.

The Swiss government has threatened to seize UBS summons lawsuit pending in District Court in Miami, Florida.

Does this mean that U.S. taxpayers who have tax fraud or John Doe summons case there are numerous other ways it can come to the attention of the IRS. For example, most offshore bank account records, which the Germans in turn handed over to the IRS.

U.S. citizens and residents who have Foreign Bank Account Report (FBAR) penalties equal to 50% of the balance in their account.

The U.S. Treasury has announced an agreement with Switzerland to amend the Swiss U.S tax treaty to allow the U.S. to more easily locate those engaged in tax fraud and tax evasion. The Swiss – U.S. treaty would be amended to comply with Article 26 of the Organization for Economic Co-operation and Development (OECD) Model Income Tax Convention. Treasury Secretary Tim Geithner stated “This Administration is committed to reducing offshore tax evasion to help ensure that all U.S. taxpayers are playing by the same rules. “This treaty will increase our ability to enforce our tax laws and will help bring an end to an era of offshore accounts and investments being used for tax evasion.”

The treaty must still be approved by the Swiss Parliament. At this point it is not known what effect this will have on the UBS summons enforcement action in Florida in which the Internal Revenue Service is attempting to obtain the names of over 50,000 UBS customers with offshore accounts who may have committed tax fraud or tax evasion.

If you have a Swiss financial account or other offshore bank account, the deadline is June 30th for filing an FBAR with the IRS. If you need to make a voluntary disclosure under the IRS Tax Amnesty, contact the tax controversy attorneys at Brager Tax Law Group, A P.C.

In an address to the Organization for Economic Co-Operation and Development (OECD) on June 2, 2009, IRS Commissioner Douglas Shulman announced renewed IRS efforts to combat international tax fraud and tax evasion.

Shulman promised to create an inhospitable climate for tax evasion and offshore secrecy by continuing and expanding cooperation with G-20 heads of state, who pledged in unity this April to act against tax havens that impede legitimate tax enforcement. He hopes to enhance information reporting on offshore account holders, increase tax withholding on U.S. citizens with foreign bank accounts in countries deemed “tax havens,” double tax penalties for failure to file FBARs, and allow the IRS more time for investigation by increasing the statute of limitations from three years to six years.

The IRS’ effort to eliminate tax fraud and tax evasion is supported by the expansion of President Obama’s 2010 budget. The budget provides funds for increased reporting on cross-border wire transfers, which would allow the IRS to gather information and target individuals who transfer money to and from offshore accounts. Also included is funding for 800 new employees who will deal specifically with international tax enforcement.

The Internal Revenue Service (IRS) has issued FAQs related to its offshore tax amnesty. As I have previously documented on March 23rd, the IRS announced a “tax amnesty” for owners of Swiss and other offshore accounts who failed to file TDF 90-22.1 (Report of Foreign Bank and Financial Account) a/k/a an FBAR. Under the offshore voluntary disclosure program a taxpayer who makes a voluntary disclosure in a timely manner can limit his penalties to 20 per cent of the highest balance in his offshore accounts during the 6 year lookback period, and avoid criminal tax penalties, along with the 75 per cent civil tax fraud penalty. In addition he must pay the income tax due for the last 6 years, plus a 20 per cent accuracy penalty under IRC Section 6662, along with interest.

The terms of the offshore voluntary compliance program as announced left many questions unanswered. Although the FAQs fills in some holes in the offshore tax amnesty program it still leaves gaps. For me the FAQ answers several key questions:

1. How is the 6 year lookback period calculated?

According to a report on Reuters, UK, Manhattan District Attorney Robert Morgenthau said New York State investigators are looking for more cases like the one in which London-headquartered Llyods agreed in January to forfeit $350 million to the United States and New York in connection with faking records related to clients from Iran.

Morgenthau said he was going to Washington to work on expediting the investigations. Although it appears that the New York investigations are centered on money laundering violations by banks and financial institutions, it is probable that evidence will be uncovered relating to individuals with offshore accounts; and such information will be turned over to the IRS, triggering tax fraud and FBAR violation investigations.

Morgenthau’s biography highlights that as a U.S. Attorney, he prosecuted tax fraud cases.