Check out some of my blog posts for the month of March! Please click on the links below to read more.
1. How do taxpayers end up with FBAR compliance problems?
FBAR compliance mistakes and failures can be incredibly easy to make, but noncompliance carries harsh and significant financial penalties. In some instances where there is the appearance of fraud or willfulness, your tax matter may be referred to the IRS Criminal Investigation division (CI). Once your matter has been referred to CI, you should seek an experienced tax professional because criminal tax charges are likely to follow.
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2. Filing Taxes Each and Every Year is Essential
If you were to ask people about the things that they should do every single year, they are likely to mention visiting the doctor for a physical, taking their car in for preventative maintenance, and maybe even a tradition that the person spearheads every year. It is unlikely, however, the individual will mention their yearly duty to file and pay taxes. While taxes are due each and every year, they are typically something that we prefer not to dwell on, unless forced to. In fact, many people will not even consider taxes until days before the due date when the media is saturated with messages about tax filing. As tax attorneys we work to provide strategies that mitigate the risk or consequences of civil or criminal tax exposure. The simplest one is to file your tax return on time!
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3. More than 100 International Agreements Mean the Risk of Undisclosed Foreign Account Detection is Higher Than Ever
At one point, banking secrecy laws in traditional tax havens were considered to provide ample protections in concealing the identity of the account holder. Wealthy individuals, companies, partnerships and a variety of other entities utilized these secrecy laws to open accounts where millions of dollars of otherwise taxable income could be surreptitiously funneled away to a foreign jurisdiction. For decades, this was considered business as usual by some individuals and the continued viability of these tax evasion strategies was not seriously questioned.
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4. What are the top signs a criminal tax investigation is forthcoming?
While many people think that a criminal tax situation is something that cannot happen to them unless they had the intent to defraud the government, the truth is that criminal tax charges can be triggered by even a slight misstep. Mistakes on your taxes that are perceived as willful misstatements by an IRS agent, and accountant or tax preparer malpractice are but a couple of the common ways that well-meaning taxpayers find themselves facing serious criminal penalties including a federal prison sentence.
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5. OVDP Can Correct FBAR Disclosure Problems
In the past, having an interest in or signature authority over a foreign financial account did not attract the level of attention and scrutiny that it does today. This is because in the past foreign banking secrecy laws prevented even the disclosure of the identity of the account holder or holders and their links to the United States. Today, this no longer holds true. The IRS and the US government have expended significant resources in promoting and creating international regulatory and reporting regimes. FATCA provides a basis for the mandatory disclosure of certain asset types. Report of Foreign Bank Accounts (FBAR) through the Banking Secrecy Act (BSA) creates a disclosure obligation when the aggregate balance of a foreign financial account or accounts exceed $10,000.
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6. HSBC Data Leaks Show that No Foreign Financial Account is Truly Secret
This data breach resulted in revealing the identity of taxpayers who had failed to comply with their tax filing obligations or who failed to file the Report of Foreign Banking Accounts (FBAR) as required by the Banking Secrecy Act (BSA). Some of these noncompliant taxpayers ended up facing onerous civil tax consequences or criminal tax prosecution. While the first HSBC data leak seems to be in the rearview for most, data leaks and data breaches that reveal the identity of account holders can occur at any financial institution at any time.
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