Whatcha Gonna Do When They Come for You? IRS CID Stepping Up its Act

WASHINGTON –The Internal Revenue Service’s (IRS) Criminal Investigation (CI) division surpassed its goals for Fiscal Year (FY) 2010, according to a new report publicly released by the Treasury Inspector General for Tax Administration (TIGTA).

CI is primarily dedicated to developing and investigating legal source tax cases, which are crimes involving legal industries and occupations and legally earned income. The prosecution of these cases is key to supporting the IRS’s overall compliance goals, enhancing voluntary compliance with the tax laws, and promoting fairness and equity in the tax system. The overall objective of TIGTA’s review was to provide a statistical portrayal with trend analyses of CI’s enforcement activities for Fiscal Years 2006 through 2010.

For more information go to http://www.forbes.com/sites/peterjreilly/2011/08/29/whatcha-gonna-do-when-they-come-for-you-irs-cid-stepping-up-its-act/

IRS Extends Deadline for Offshore - What Must Be Filed?

The IRS stated on August 26 and further clarified on August 29 that due to the potential impact of Hurricane Irene it has extended the due date for its 2011 Offshore Voluntary Disclosure Initiative (OVDI) requests and several other required informational returns from August 31, 2011 until September 9, 2011.

For those taxpayers who have not yet submitted their request and any documents, the IRS has indicated that the following actions are necessary by September 9, 2011:

• Identifying information must be submitted to the Criminal Investigation office. This includes name, address, date of birth, and social security number and as much of the other information requested in the Offshore Voluntary Disclosures Letter as possible. This information must be sent to:
  
  Offshore Voluntary Disclosure Coordinator
  600 Arch Street, Room 6404
  Philadelphia, PA 19106
• Send a request for a 90-day extension for submitting the complete voluntary disclosure package of information to the Austin campus. This request must be sent to:
  
  Internal Revenue Service
  3651 S. I H 35 Stop 4301 AUSC
  Austin, TX 78741
  ATTN: 2011 Offshore Voluntary Disclosure Initiative

The IRS's 2011 OVDI established a framework of penalties for taxpayers who become fully tax compliant for unreported offshore income, accounts, civil law foundations, trusts or entities for years between 2003 and 2010.

The IRS also extended the deadline for filing delinquent Reports on Foreign Bank and Financial Accounts (FBAR) that were due for calendar years prior to 2010 until September 9, 2011.

In addition, the IRS will not impose a penalty for the failure to file the information returns Form 5471 for controlled foreign corporations or Form 3520 for foreign trusts if there are no underreported tax liabilities and the information returns are filed by September 9, 2011.

Swiss ‘Clarification' on U.S. Treaty Could Ease Handover of Bank Account Details

The Swiss government has put forward a clarification of the new U.S.-Swiss double taxation tax treaty, which may help resolve a dispute between the two countries over allegations that Switzerland’s second largest bank helped its U.S. clients evade taxes.

A spokesman for the Swiss Federal Tax Administration, Mario Tuor, confirmed Aug. 29 that the Federal Council, the government’s executive arm, sent a memorandum dated Aug. 8 outlining an interpretation of administrative assistance under the treaty. That interpretation may make it easier for the U.S. Internal Revenue Service to seek out information on undeclared accounts of U.S. clients with the Swiss bank, Credit Suisse. The memorandum, forwarded to the foreign affairs committee of the Swiss parliament’s upper house, contains a clarification of the tax agreement by the Federal Council.

 It was understood the memorandum makes reference to the draft of an undertaking by the Swiss government to hand over a list of U.S. clients with Credit Suisse accounts to U.S. tax authorities – just as the Swiss government agreed to do in 2009 in regards to U.S. demands for information on undeclared accounts of U.S. clients with UBS, Switzerland’s largest bank.

IRS Includes FBARs, Other Foreign Returns In Extension for Offshore Asset Disclosure

The Internal Revenue Service Aug. 29 said it would include foreign bank account and other foreign information reports in the nine-day extension it granted to taxpayers seeking to participate in the agency's Offshore Voluntary Disclosure Initiative (OVDI), in what one stakeholder said was a welcome decision.

The move is the latest news for the initiative, which allows taxpayers to voluntarily disclose their offshore assets in exchange for a set penalty structures and the chance to avoid criminal prosecution. Taxpayers also can catch up if they have missed filing the Report of Foreign Bank Account (FBAR), or other information returns such as the Form 5471 for controlled foreign corporations and Form 3520 for foreign trusts, as long as they have reported all their income and paid all their taxes.

On Aug. 26, IRS gave taxpayers an extra nine days to participate in the broader OVDI because of the potential impact of Hurricane Irene, moving the deadline from Aug. 31, 2011 to Sept. 9, 2011.

On Aug. 29, the agency updated its frequently asked questions and answers on the program with a similar extension for delinquent FBARs or other foreign information returns. For questions 17 and 18, IRS said as long as taxpayers have reported and paid tax on all their taxable income, it will accept the FBARs and such forms as the 5471 and 3520 through Sept. 9, 2011.
http://www.irs.gov/businesses/international/article/0,,id=235699,00.html.

9th Circuit Finds Fifth Amendment Privilege Does Not Apply to Swiss Banking Records

Ninth Circuit Finds Fifth Amendment Privilege Does Not Apply to Swiss Banking Records - The Fifth Amendment privilege does not apply to records that fall under the Required Records Doctrine                     

http://www.ca9.uscourts.gov/datastore/opinions/2011/08/19/11-55712.pdf