Offshore, Overseas Accounts, FBAR Compliance – Lawyers, Attorneys – Nationwide Affordable Experts

by Fresh Start Tax | Sep 11, 2013 | FBAR

The Internal Revenue Service has dedicated millions of dollars of assets to look into the practices of offshore and overseas bank accounts.
In the last three years, the Internal Revenue Service has made tremendous headway into achieving the dream of full tax compliance for Offshore and Overseas bank accounts.
The public should beware that the IRS means business. There are millions and millions of dollars at stake.  IRS will use the long arm of the law including criminal prosecution to make sure they collect all the money due the United States government.
It is in your best interest to consult a tax lawyer or tax attorney to review your individual case to make sure you achieve the best financial and tax result.
 

Latest News- Tax deal reached between Switzerland and the United States

 
A tax deal reached between Switzerland and the United States on Thursday effectively put an end to the status of the small Alpine country as a tax haven for wealthy Americans.
The agreement  came after more than three years of intense discussions between the two countries, is expected to punish Swiss banks that helped wealthy Americans hide money from United States tax authorities in offshore accounts and require them to disclose information about United States account holders.
Even before the tax agreement many banks in Switzerland had started to turn away American clients, fearing at least additional administrative burdens from the United States authorities.
The deal is expected to accelerate that trend and make it even harder for American expatriates in Switzerland to find banking services.
 

IRS and DOJ involved

 
The Internal Revenue Service and the Department of Justice is very active in the offshore voluntary disclosure program simply because of the huge revenue these programs bring into the coffers of the United States government.
In the first three years of operation the program has yielded an amazing $5.5 billion in additional revenue. Estimates are that there are at least $200 billion of additional revenue that can be brought in because of tax compliance issues.
In the past, the IRS has been very lenient on some taxpayers because the program was new and in the infancy stages of development and programming.
But now that the word is out , the government is taking a much more aggressive approach both financially and criminally on both financial institutions and taxpayers who are failing to comply with tax compliance issues.
If you have questions or need tax representation for FBAR tax compliance feel free to call us today and speak directly to a tax attorney, tax lawyer, CPA or all of our experts in the industry.
You can call us today for a free initial tax consultation.
 

Current FBAR Guidance  –  FBAR final regulations

On February 24, 2011, the Treasury Department published final FBAR regulations. These regulations became effective March 28, 2011, and apply to FBARs required to be filed with respect to foreign financial accounts maintained at any time during calendar year 2010, and for FBARs required to be filed with respect to all subsequent calendar years. The FBAR form and instructions were revised to reflect the amendments made by the final regulations.
 
Filing deferral for certain individuals with signature authority only, effective through June 30, 2014.
 

Open-ended offshore voluntary disclosure program (OVDP)

 
The IRS began an open-ended offshore voluntary disclosure program (OVDP) in January 2012 on the heels of strong interest in the 2011 and 2009 programs. The IRS may end the 2012 program at any time in the future.
The IRS is offering people with undisclosed income from offshore accounts another opportunity to get current with their tax returns.
The 2012 OVDP has a higher penalty rate than the previous program but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk detection by the IRS and possible criminal prosecution.

Offshore Voluntary Disclosure Program – The Submission Requirements

 
As a condition to being accepted into the Offshore Voluntary Disclosure Program (OVDP), applicants/taxpayers must provide the IRS the following for the eight year voluntary disclosure period.
1. Applicants: Copies of previously filed original (and, if applicable, previously filed amended) federal income tax returns for tax years covered by the voluntary disclosure.
2. Applicants: Complete and accurate amended federal income tax returns (for individuals, Form 1040X, or original Form 1040 if delinquent) for all tax years covered by the voluntary disclosure, with applicable schedules detailing the amount and type of previously unreported income from the account or entity (e.g., Schedule B for interest and dividends, Schedule D for capital gains and losses, Schedule E for income from partnerships, S corporations, estates or trusts, and, for years after 2010, Form 8938, Statement of Specified Foreign Financial Assets).
For taxpayers who began filing timely, original, compliant returns that fully reported previously undisclosed offshore accounts or assets before making the voluntary disclosure for certain years of the offshore disclosure period, copies of the previously filed returns for the corresponding years.
3. Applicants: Copy of your completed and signed Offshore Voluntary Disclosures letter and attachment.
4. Applicants: A check made out to the U.S. Treasury. Checks should not be made out to the IRS.
The check must include the amount of tax, interest, and accuracy-related penalty under IRC § 6662(a), and, if applicable, the failure to file and failure to pay penalties under IRC § 6651(a) (the suspension of interest provisions of IRC § 6404(g) do not apply to interest due in this initiative).
If you cannot pay the total amount of tax, interest, and penalties as described above, submit your proposed payment arrangement and a completed Collection Information Statement ( Form 433-A, Collection Information Statement for Wage Earners and Self-employed Individuals, or Form 433-B, Collection Information Statement for Businesses, as appropriate).
You can find these forms on our website. Go to the home page and click on forms.
5. Applicants: Completed Foreign Account or Asset Statement for each previously undisclosed foreign account or asset during the voluntary disclosure period if the information requested in that statement was not already provided in your initial Offshore Voluntary Disclosures Letter.
6. Applicants: Completed penalty computation worksheet showing the applicant’s determination of the aggregate highest account balance of his/her undisclosed offshore accounts, fair market value of foreign assets, and penalty computation signed by the applicant and the applicant’s representative if the applicant is represented.
7. Applicants: Properly completed and signed agreements to extend the period of time to assess tax (including tax penalties) and to assess FBAR penalties.
8. Applicants disclosing offshore financial accounts:
Copies of filed Forms TD F 90-22.1 (FBARs) for foreign accounts maintained during calendar years covered by the voluntary disclosure.
(You should file delinquent FBARs according to the FBAR instructions and include a statement explaining that the FBARs are being filed as part of the OVDP. Through June 30, 2013, you may file electronically or by sending paper forms to:
Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621. After June 30, 2013, you must file electronically.)
If you are unable to file electronically, you may contact FinCEN’s Regulatory Helpline at 1-800-949-2732 or (if calling from outside the United States) 1-703-905-3975 to determine possible alternatives for timely reporting.
NOTE: Taxpayers filing FBARs electronically do not currently have the technological ability to include a statement explaining why the FBARs are filed late.
Until such time that they have the ability, it is sufficient to file the FBARs electronically, retain the statement, and submit the statement to the Service upon request.
9. Applicants disclosing offshore financial accounts:
For those applicants disclosing offshore financial accounts with an aggregate highest account balance in any year of $500,000 or more, copies of offshore financial account statements reflecting all account activity for each of the tax years covered by your voluntary disclosure.
You need to explain any differences between the amounts reported on the account statements and the tax returns.
For those applicants disclosing offshore financial accounts with an aggregate highest account balance of less than $500,000, copies of offshore financial account statements reflecting all account activity for each of the tax years covered by your voluntary disclosure must be available upon request.
10. Applicants disclosing offshore entities:
A statement identifying all offshore entities for the tax years covered by the voluntary disclosure, whether held directly or indirectly, and your ownership or control share of such entities.
11. Applicants disclosing offshore entities: When accounts or assets were held in the name of a foreign entity, complete and accurate amended (or original, if delinquent) information returns required to be filed, including, but not limited to, Forms 3520, 3520-A, 5471, 5472, 926 and 8865 for all tax years covered by the voluntary disclosure.
If the applicant is requesting that the Service waive the information reporting requirement, the applicant should submit a completed and signed Statement on Dissolved Entities.
12. Estates and certain executors or advisors.
If the applicant is a decedent’s estate, or is an individual who participated in the failure to report the foreign account, foreign asset, or foreign entity in a required gift or estate tax return, either as executor or advisor, provide complete and accurate amended estate or gift tax returns (original estate or gift tax returns, if not previously filed) for tax years covered by the voluntary disclosure necessary to correct the under reporting of assets held in or transferred through undisclosed foreign accounts or foreign entities.
13. Returns involving Passive Foreign Investment Company (PFIC) issues. A statement whether the amended returns involve PFIC issues during the tax years covered by the OVDP period, and if so, whether the applicant chooses to elect the alternative to the statutory PFIC computation that resolves PFIC issues on a basis that is consistent with the mark to market (MTM) methodology authorized in IRC § 1296 but does not require complete reconstruction of historical data.

Canadian registered retirement savings plans (RRSP)

 
14. Applicants with Canadian registered retirement savings plans (RRSP) or registered retirement income funds (RRIF) who wish to make late elections to defer U.S. tax on RRSP or RRIF earnings:
A statement requesting an extension of time to make an election,
Forms 8891 for all tax years and type of plan covered under the voluntary disclosure,
A dated statement signed by the taxpayer under penalties of perjury describing:
1. Events that led to the failure to make the election
2. Events that led to the discovery of the failure
If the taxpayer relied on a professional advisor, the nature of the advisor’s engagement and responsibilities.
We are a full service tax firm that specializes in FBAR, Offshore and Overseas tax compliance in all federal and state tax matters.
You can call us for a no cost initial consultation.
If you have sensitive issues and matters you wish to discuss when calling our office you  should ask to speak to a tax lawyer or tax attorney so you can keep attorney-client privilege. You should never give sensitive information that may be of criminal nature to any third party. Keep your attorney client privilege.
As a personal comment and observation,  the government always goes after low hanging fruit because of its effectiveness. In the case of overseas, offshore, and FBAR compliance there is a six to one ratio of collection to manpower. It is no wonder that the federal government absolutely love these programs. Not only that the government can boast of criminal prosecutions that are easy cases because of the paper trail these cases have.
 
 
 

Offshore, Overseas Accounts, FBAR Compliance – Lawyers, Attorneys – Nationwide Affordable Experts

FBAR Tax Compliance – Tax Attorneys, Tax Lawyers CPA's – FBAR Experts

by Fresh Start Tax | Sep 10, 2013 | FBAR

Offshore Voluntary Disclosure Program – FBAR Tax Compliance
The Internal Revenue Service and the Department of Justice is very active in the offshore voluntary disclosure program simply because of the huge revenue these programs bring into the coffers of the United States government.
In the first three years of operation the program has yielded an amazing $5.5 billion in additional revenue. Estimates are that there are at least $200 billion of additional revenue that can be brought in because of tax compliance issues.
In the past, the IRS has been very lenient on some taxpayers because the program was new and in the infancy stages of development and programming.
But now that the word is out , the government is taking  a much more aggressive approach both financially and criminally on both financial institutions and taxpayers who are failing to comply with tax compliance issues.
If you have questions or need tax representation for Fbar tax compliance feel free to call us today and speak directly to a tax attorney, tax lawyer, CPA or all of our experts in the industry. You can call us today for a free initial tax consultation
The IRS began an open-ended offshore voluntary disclosure program (OVDP) in January 2012 on the heels of strong interest in the 2011 and 2009 programs. The IRS may end the 2012 program at any time in the future.
The IRS is offering people with undisclosed income from offshore accounts another opportunity to get current with their tax returns.
The 2012 OVDP has a higher penalty rate than the previous program but offers clear benefits to encourage taxpayers to disclose foreign accounts now rather than risk detection by the IRS and possible criminal prosecution.
 

Offshore Voluntary Disclosure Program – The Submission Requirements

 
As a condition to being accepted into the Offshore Voluntary Disclosure Program (OVDP), applicants/taxpayers must provide the IRS the following for the eight year voluntary disclosure period.
1.  Applicants: Copies of previously filed original (and, if applicable, previously filed amended) federal income tax returns for tax years covered by the voluntary disclosure.
2.  Applicants: Complete and accurate amended federal income tax returns (for individuals, Form 1040X, or original Form 1040 if delinquent) for all tax years covered by the voluntary disclosure, with applicable schedules detailing the amount and type of previously unreported income from the account or entity (e.g., Schedule B for interest and dividends, Schedule D for capital gains and losses, Schedule E for income from partnerships, S corporations, estates or trusts, and, for years after 2010, Form 8938, Statement of Specified Foreign Financial Assets).
For taxpayers who began filing timely, original, compliant returns that fully reported previously undisclosed offshore accounts or assets before making the voluntary disclosure for certain years of the offshore disclosure period, copies of the previously filed returns for the corresponding years.
3.  Applicants: Copy of your completed and signed Offshore Voluntary Disclosures letter and attachment.
4.   Applicants:  A check made out to the U.S. Treasury. Checks should not be made out to the IRS.
The check must include the amount of tax, interest, and accuracy-related penalty under IRC § 6662(a), and, if applicable, the failure to file and failure to pay penalties under IRC § 6651(a) (the suspension of interest provisions of IRC § 6404(g) do not apply to interest due in this initiative).
If you cannot pay the total amount of tax, interest, and penalties as described above, submit your proposed payment arrangement and a completed Collection Information Statement ( Form 433-A, Collection Information Statement for Wage Earners and Self-employed Individuals, or Form 433-B, Collection Information Statement for Businesses, as appropriate).
You can find these forms on our website. Go to the home page and click on forms.
5.  Applicants:  Completed Foreign Account or Asset Statement for each previously undisclosed foreign account or asset during the voluntary disclosure period if the information requested in that statement was not already provided in your initial Offshore Voluntary Disclosures Letter.
6.   Applicants:  Completed penalty computation worksheet showing the applicant’s determination of the aggregate highest account balance of his/her undisclosed offshore accounts, fair market value of foreign assets, and penalty computation signed by the applicant and the applicant’s representative if the applicant is represented.
7.   Applicants:  Properly completed and signed agreements to extend the period of time to assess tax (including tax penalties) and to assess FBAR penalties.
8.  Applicants disclosing offshore financial accounts:
Copies of filed Forms TD F 90-22.1 (FBARs) for foreign accounts maintained during calendar years covered by the voluntary disclosure.
(You should file delinquent FBARs according to the FBAR instructions and include a statement explaining that the FBARs are being filed as part of the OVDP.  Through June 30, 2013, you may file electronically or by sending paper forms to:
Department of Treasury, Post Office Box 32621, Detroit, MI 48232-0621.  After June 30, 2013, you must file electronically.) 
If you are unable to file electronically, you may contact FinCEN’s Regulatory Helpline at 1-800-949-2732 or (if calling from outside the United States) 1-703-905-3975 to determine possible alternatives for timely reporting.
NOTE:  Taxpayers filing FBARs electronically do not currently have the technological ability to include a statement explaining why the FBARs are filed late.
Until such time that they have the ability, it is sufficient to file the FBARs electronically, retain the statement, and submit the statement to the Service upon request.
9. Applicants disclosing offshore financial accounts:
For those applicants disclosing offshore financial accounts with an aggregate highest account balance in any year of $500,000 or more, copies of offshore financial account statements reflecting all account activity for each of the tax years covered by your voluntary disclosure.
You need to explain any differences between the amounts reported on the account statements and the tax returns.
For those applicants disclosing offshore financial accounts with an aggregate highest account balance of less than $500,000, copies of offshore financial account statements reflecting all account activity for each of the tax years covered by your voluntary disclosure must be available upon request.
10.  Applicants disclosing offshore entities:  A statement identifying all offshore entities for the tax years covered by the voluntary disclosure, whether held directly or indirectly, and your ownership or control share of such entities.
11.     All applicants disclosing offshore entities:  When accounts or assets were held in the name of a foreign entity, complete and accurate amended (or original, if delinquent) information returns required to be filed, including, but not limited to, Forms 3520, 3520-A, 5471, 5472, 926 and 8865 for all tax years covered by the voluntary disclosure.
If the applicant is requesting that the Service waive the information reporting requirement, the applicant should submit a completed and signed Statement on Dissolved Entities.
12.  Estates and certain executors or advisors.
If the applicant is a decedent’s estate, or is an individual who participated in the failure to report the foreign account, foreign asset, or foreign entity in a required gift or estate tax return, either as executor or advisor, provide complete and accurate amended estate or gift tax returns (original estate or gift tax returns, if not previously filed) for tax years covered by the voluntary disclosure necessary to correct the under reporting of assets held in or transferred through undisclosed foreign accounts or foreign entities.
13.  Returns involving Passive Foreign Investment Company (PFIC) issues.  A statement whether the amended returns involve PFIC issues during the tax years covered by the OVDP period, and if so, whether the applicant chooses to elect the alternative to the statutory PFIC computation that resolves PFIC issues on a basis that is consistent with the mark to market (MTM) methodology authorized in IRC § 1296 but does not require complete reconstruction of historical data.
Canadian registered retirement savings plans (RRSP)
14. Applicants with Canadian registered retirement savings plans (RRSP) or registered retirement income funds (RRIF) who wish to make late elections to defer U.S. tax on RRSP or RRIF earnings:
 

• A statement requesting an extension of time to make an election,

• Forms 8891 for all tax years and type of plan covered under the voluntary disclosure,
• A dated statement signed by the taxpayer under penalties of perjury describing:

• Events that led to the failure to make the election

• Events that led to the discovery of the failure

• If the taxpayer relied on a professional advisor, the nature of the advisor’s engagement and responsibilities.

 
We are a full service tax firm that specializes in Fbar tax compliance in all federal and state tax matters.
You can call us for a no cost initial consultation.
 

FBAR Tax Compliance – Tax Attorneys Lawyer CPA’s – FBAR Experts

FBAR – Overseas Banking – You Better File & Report – Tax Attorneys, CPA – Experts Can Help

by Fresh Start Tax | Sep 9, 2013 | FBAR

The Internal Revenue Service is very serious  in making sure that all taxpayers pay their fair share. The long arm of the law has collected over $5.5 billion in the first three offshore programs and increase pressure is now being felt in Switzerland as a result of the tax deal made with the United States government.
 

Tax deal reached between Switzerland and the United States

 
A tax deal reached between Switzerland and the United States on Thursday effectively put an end to the status of the small Alpine country as a tax haven for wealthy Americans.
The agreement  came after more than three years of intense discussions between the two countries, is expected to punish Swiss banks that helped wealthy Americans hide money from United States tax authorities in offshore accounts and require them to disclose information about United States account holders.
Even before the tax agreement many banks in Switzerland had started to turn away American clients, fearing at least additional administrative burdens from the United States authorities.
The deal is expected to accelerate that trend and make it even harder for American expatriates in Switzerland to find banking services.
 

“It’s pretty close to the end for Swiss banking for wealthy Americans.

If you are thinking of an expatriate in to Switzerland for tax reasons that could be in an enormous mistake.
“It’s pretty close to the end for Swiss banking for wealthy Americans,” Ben Jones, principal associate at law firm Eversheds in London, said. “But then again you had to be a pretty naïve U.S. taxpayer if you were thinking you could still hide funds in Swiss banks.” With so much money at stake the Internal Revenue Service is no longer go ignore the international taxpayer not paying their taxes.
 

The formal agreement reached

 
The formal agreement was reached by the Justice Department (DOJ) in Washington and which was presented by Swiss which calls for stiff measures that lift the veil of Swiss banking secrecy.
As part of the deal banks will be required to provide the details on accounts in which American taxpayers have an interest through treaty channels, disclose all cross-border activities and close the accounts of Americans who are evading taxes. Taxpayers who failed to report will come under stiff fines and criminal prosecution. .
The Internal Revenue Service and the Department of Justice actively keep all current prosecutions on their website for all to see.
The Swiss government said the deal allows Switzerland to draw a line under past tax disputes with the United States and create some certainty for the Swiss banking industry.
“It’s a solution we can live with,” Eveline Widmer-Schlumpf, the Swiss finance minister and president of the Federal Council, said at a news conference in Switzerland on Friday morning. “It provides the possibility for us to move forward and not have to continue fighting with the past.”
Without an agreement, the reputation of Switzerland as a financial center would have continued to suffer for years to come, she said. But she also said it was still possible that a bank could collapse under the heavy financial burden of fines imposed by American authorities.
 

U.S. Pressure

The Swiss government has been resisting cooperation until now because the secrecy of its banking system has long made the country an offshore money haven for wealthy foreigners.
But scrutiny in Europe of tax havens has been widening and pressure from the United States, including a number of arrests of Swiss bankers who traveled to the United States, started to increase pressure on Switzerland to come to an agreement.
For Swiss banks, the agreement ends uncertainty about possible prosecution, but the final size of the penalties remains to be decided. Even banks that will not have to pay large penalties that could hurt their finances and operations are bracing for spiraling costs because of the additional data they will be required to dig up and provide to authorities.
Sindy Schmiegel Werner, a spokeswoman for the Swiss Bankers Association, said the deal was “the least bad solution.” “There’s no doubt that this will be very, very painful for the banks,” she said.
Despite greater tax scrutiny, money continued to flow into Swiss banks from abroad over the past years.
Amid the chaos of the European debt crisis and growing fears about the safety of deposits in some European banks, Switzerland continued to be considered a safe haven for investments.
Switzerland was the top destination in 2012 for offshore wealth, defined as assets booked in a country where the investor has no legal residence or tax domicile, registering $2.2 trillion, followed by Hong Kong and Singapore, according to the Boston Consulting Group 2013 Global Wealth report.
 

UBS, the largest Swiss bank Agreed

 
It was in 2009 that UBS, the largest Swiss bank, agreed to enter into a deferred-prosecution agreement with the United States, turning over thousands of client names and paying a million dollar fine.
But soon after UBS admitted criminal wrongdoing in selling tax-evasion services to wealthy Americans, the Justice Department authorities were incensed that other Swiss banks offered shelter to American clients fleeing UBS.
In 2012, the United States Justice Department indicted Wegelin & Company, Switzerland’s oldest bank, for misconduct from the early 2000s until 2011. The once prestigious Swiss bank pleaded guilty in January, putting it out of business after 272 years. The Swiss government feared that more indictments could follow, seriously threatening the existence of some banks.
This report should send out a loud boom to all those persons involved in overseas banking. Both the Department of Justice in the Internal Revenue Service will be on a mission to hunt all  financial activity down.
With this much money at stake and the federal government not wanting to raise taxes these international clients are easy targets for the federal government and the criminal courts.
 

The IRS Offshore Voluntary Disclosure Program

 
The Internal Revenue Service stated that its offshore voluntary disclosure programs have exceeded the $5 billion mark and released new details regarding the voluntary disclosure program announced in January, including tightening the eligibility requirements.
 
Shulman said the IRS offshore voluntary disclosure programs have so far resulted in the collection of more than $5 billion in back taxes, interest and penalties from 33,000 voluntary disclosures made under the first two programs.
In addition, another 1,500 disclosures have been made under the new program announced in January.
The voluntary disclosure programs are part of a wider effort by the IRS to stop offshore tax evasion and ensure tax compliance.
This includes beefed up enforcement, criminal prosecution and implementation of third-party reporting through the Foreign Account Tax Compliance Act ( FATCA).
The IRS also closed a loophole that’s been used by some taxpayers with offshore accounts. Under existing law, if a taxpayer challenges in a foreign court the disclosure of tax information by that government, the taxpayer is required to notify the U.S. Justice Department of the appeal.
The IRS said that if the taxpayer fails to comply with this law and does not notify the U.S. Justice Department of the foreign appeal, the taxpayer will no longer be eligible for the Offshore Voluntary Disclosure Program ( OVDP).
The IRS also put taxpayers on notice that their eligibility for OVDP could be terminated once the U.S. government has taken action in connection with their specific financial institution.
Additional details of these eligibility issues are available in a new set of questions and answers released today on the current OVDP, which was announced in January ( see IR-2012-5).
The IRS reopened the OVDP following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs.
This program – which helps bring people back into the tax system — will be open for an indefinite period until otherwise announced. The program is similar to the 2011 program in many ways, but with a few key differences.
Unlike last year, there is no set deadline for people to apply. However, the terms of the program could change at any time going forward.
Under the current OVDP, the offshore penalty has been raised to 27.5 percent from 25 percent in the 2011 program. The reduced penalty categories of 5 percent and 12.5 percent are still available.
The IRS also announced a plan to help U.S. citizens residing overseas to catch up with tax filing obligations and assistance for people with foreign retirement plan issues