IRS Audits & 419 Plans Litigation: FBAR / OVDI LANCE WALLACH: If You Have or Had Money
IRS Audits & 419 Plans Litigation: FBAR/OVDI LANCE WALLACH: If You Have or Had Money ...: FBAR/OVDI LANCE WALLACH: If You Have or Had Money Overseas You Better File ... : Lance Wallach According to various reports the IRS is i...
Subscribe to:
Post Comments (Atom)
information regarding U.S. tax payers with accounts in Liechtenstein. At the time, the treaty explicitly did not allow for “fishing expeditions”, i.e., broad requests from the IRS for information on a class of unknown U.S. taxpayers. Rather, Liechtenstein was only to provide information if asked about a specific, known taxpayer identified by name.
ReplyDeleteTo disclose I suggest that you use a CPA who was with the international division of the IRS.
Share
Posted in Uncategorized | Leave a reply
the inability of foreign governments to withstand U.S. pressure
Posted on February 5, 2014
In light of the ongoing erosion of foreign banking secrecy, the inability of foreign governments to withstand U.S. pressure and the willingness of former tax havens to cooperate with the IRS, U.S. taxpayers with non-compliant accounts, in Liechtenstein,India, Israel, and anywhere else, should meet with qualified tax counsel immediately to discuss tax compliance. Use a CPA who was with the IRS.
Share
Posted in Uncategorized | Leave a reply
Foreign Bank Account Report (FBAR)
Posted on January 9, 2014
A Foreign Bank Account Report (FBAR) is a form that must be filled out by US Taxpayers who have a financial interest in or signature authority over at least one foreign financial account.
The FBAR form is TD F 90-22.1. It is filed once a year by June 30.
The government’s interest in FBAR requirements has grown substantially and has created global attention. The IRS has issued summonses to two global financial institutions, UBS and HSBC, in an attempt to discover U.S. taxpayers who have failed to file FBARs. The recent disclosure to WikiLeaks has also created the potential for other third party disclosures.
The IRS will get you so file ASAP. We suggest that you then properly opt. out to take your case to appeals.
Share
Posted in Uncategorized | Leave a reply
Post navigation← Older posts
PAGES
About
FBAR OVDI
Search
RECENT POSTS
Offshore banking secrecy
the inability of foreign governments to withstand U.S. pressure
Foreign Bank Account Report (FBAR)
Failure to File
Failure to File
Do I have to file IRS Form 8886 with my 2013 Tax Return?
ReplyDeleteAny taxpayer participating in a multiple or single employer 419 plan or a 79 plan using cash value life insurance should consider whether to file IRS Form 8886 with their 2013 tax returns. See IRS Notice 2007-83.
The IRS rules provide that any taxpayer who “participates” in a transaction for a year has an obligation to file IRS Form 8886. If a taxpayer has an obligation to file and fails to file timely, the taxpayer will be subject to a penalty under IRC 6707A that is the greater of 75% of the tax benefit shown on the return and the minimum penalty ($5,000 for individuals and $10,000 for businesses). An owner of an S Corporation would be subject to two penatlies, $10,000 at the S Corporation level and a penalty at the personal level.
Sometimes promoters discourage taxpayers from filing Form 8886 as they fear it will create IRS interest in a promoter audit. Accordingly, taxpayers should seek independent advice as to whether their transaction may be treated as a “listed transaction” and if so, whether they have an obligation to file.
Taxpayers should also consider whether they have an obligation to file Forms 8886 for past years. Although the filing of past-due forms will not eliminate the failure to file penalty, it will start the statute of limitations which otherwise may remain open indefinitely under IRC 6501(c)(10).
it’s been interesting to watch the IRS and Treasury Department crack down on American taxpayers with secret offshore bank accounts. Switzerland and the Caribbean now report American account holders to the IRS. Then the IRS cross correlates that information with FinCEN 114, still called FBAR, Schedule B, Interest and Ordinary Dividends, and Form 8938, Statement of Specified Foreign Assets, to look for taxable interest and income. FinCEN is the Financial Crimes Enforcement Network, setting an ominous tone for their OVDI program (Offshore Voluntary Disclosure Initiative).
ReplyDeleteFinCen 114 (FBAR)
Any American person with signature access to foreign bank accounts with an aggregate balance, at anytime of the calendar year, exceeding $10,000 must e-file FinCen 114 (FBAR) through the Treasury Department’s Bank Secrecy Act system by June 30th of the following year. The penalty is $10,000 if you don’t. In addition you report the same bank account on IRS Schedule B, Interest and Ordinary Dividends, on Part III, line 7a. Many of the Folks who must file aren’t even expats. So FBAR is often a retroactive surprise with significant consequences.
OVDI (Offshore Voluntary Disclosure Initiative)
If you haven’t filed FBARs you’ve stepped in a tax compliance mud hole. OVDI is an application to the criminal arm of the IRS, where you essentially come clean for the seven retro tax years. Here’s a case of mine that finally closed two years after filing. The client was a foreign national who happened to be born in the US. He grew up in the other country and eventually opened up a no interest checking account. Once his wife was expecting, he looked into his US citizenship to ascertain the benefits to his child. The following is a strong statement of America’s allure. I filed seven years of back taxes all showing $0 due. I filed seven years of FBARs. He paid a 5% fine (the best possible outcome at that time) on his highest bank balance. But many OVDI applicants must amend those tax returns to include interest and other income from their foreign assets. And then pay the additional tax and penalties plus a 27%+ fine.
Now the IRS requires pre-screening of OVDI candidates. If they suspect criminal activity you can’t apply. Heated debate about opting out of OVDI and soft disclosures still occur between expatCPA(s).
Form 8938, Statement of Specified Foreign Assets
Here you report foreign bank accounts and other foreign assets if:
Your total foreign assets at the end of the calendar year exceeded $50,000.
Your aggregate foreign assets exceeded $75,ooo at any time of the calendar year