Billionaires Flee Havens as Trillions Pursued Offshore

Billionaire Dmitry Rybolovlev, Russia’s 14th-richest person, and his wife, Elena Rybolovleva, have been brawling for almost five years in at least seven countries over his $9.5 billion fortune.

More than 30 percent of the world’s 200 richest people, who have a $2.8 trillion collective net worth,Bloomberg Billionaires Index, control part of their personal fortune through an offshore holding company or other domestic entity where the assets are held indirectly. These structures often hide assets from tax authorities or provide legal protection from government seizure and lawsuits.

Rybolovlev, who lives in Monaco, made most of his fortune from the sale of two potash fertilizer companies for a combined $8 billion in 2010 and 2011. He held both companies -- OAO Uralkali and OAO Silvinit -- through Cyprus-based Madura Holding Ltd.

Singapore, the heart of Asia’s banking and offshore industry, will make laundering of profits from tax evasion a crime under a law taking effect on July 1. Luxembourg announced on April 10 that it would end its bank secrecy policy in 2015.

Cyprus was bailed out of its financial troubles in March by the European Union, which required the nation to impose a tax on bank deposits of more than 100,000 euros. That month, the country lost $2.4 billion in deposits, according to data from the European Central Bank.

The shift toward transparency has led many of the world’s wealthiest to reassess how and where they hold their assets, according to Goran Grosskopf, a Lausanne, Switzerland-based economist who has advised several billionaires, as well as the Russian government.

 

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Source:

Bloomberg.com

Multinationals Be Prepared: Costly Tax Audits On The Rise!

              

The current trends in global taxation include a sweeping wave of compliance, regulatory requirements, the implementation of the OECD report on Base Erosion and Profits Sharing alongside a push for harmonisation. The development of FATCA legislation from the US, CFC reform and increases in information exchange agreements are also of major impact to multinationals and their tax departments.

The economic instability witnessed across the globe over the past few years has resulted in a number of shifts in global tax systems, largely driven by the need of governments to drive revenues.

According to TaxAnd.com Governments worldwide are facing severe financial challenges, and as a means of combating further dire financial straits, they are ramping up their auditing processes to recover unidentified revenue sources.

This need has resulted in heightened scrutiny of multinationals’ tax affairs and a more aggressive as well as more sophisticated approach to tax audits by authorities. The burden of compliance is only going to rise.

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for Your Company's Tax Audits?

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TaxAnd.com

IRS Begins Furlough Notice

As the effects of federal government budget cuts due to sequestration become a reality, we want to keep the dialogue open regarding next steps. Next week, we plan to issue official furlough notices. Some IRS employees will receive them via email, while many campus employees will receive hard-copy letters. Those in non-work status will receive letters at their home addresses.

For your planning purposes, the first furlough days will be May 24, June 14, July 5, July 22 and August 30, with another two days possible in August or September.

All public-facing operations will be closed on these dates, including our toll-free operations and Taxpayer Assistance Centers.

Everyone is covered by this furlough, and that means everyone from the Acting Commissioner and executives to managers and employees.

Thanks again for your hard work during these challenging times.

--Steve Miller, Acting Commissioner

Having Trouble Contacting the IRS to Resolve Your Tax Problem?

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Norway signs FATCA Agreement with United States.

The Norwegian Ministry of Finance announced on April 15, 2013 the signing of an agreement with small t and will as he United States for an automatic exchange of financial information between the countries’ tax authorities, pursuant to the U.S. Foreign Account Tax Compliance Act (FATCA).

The agreement makes Norway the second Nordic nation to enact FATCA, after the Danish government signed a similar agreement in November 2012.

A memorandum of understanding states that the United States intends to treat Norwegian financial institutions as being in compliance with the FATCA rules.With the agreement, Norwegian financial institutions will not be subject to withholding tax, and the agreement will also facilitate the reporting obligation for Norwegian financial institutions, so that they report to the Norwegian tax authorities, who in turn will then pass on the information to U.S. authorities.

The agreement will enter into force upon an exchange of notes after the necessary procedures for its entry into force have been completed (in Norway, this requires the consent of the Parliament).

Are you a US Person with a Not So Secret Foreign Bank Account?

Having FATCA Problems?

 

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Source

KPMG

 

The Noose Tightens as Criminal Charges are brought against a Swiss Banker and a Swiss Attorney.

Authorities charged a Swiss banker and a Swiss attorney with helping American clients hide millions of dollars in offshore accounts to evade paying taxes.

The case is the latest in a string of prosecutions from the Justice Department aimed at curtailing offshore tax evasion services sold by Swiss and Swiss-style banks.

Stefan Buck and Edgar Paltzer were each charged with one count of conspiracy, an indictment filed in Manhattan federal court showed. It did not name the defendants' employers.

Buck is the head of private banking and a member of the executive board at "Swiss Bank No. 1," while Paltzer is a partner at a "Swiss Law Firm" and was admitted to the New York bar in 1988, according to the indictment.

Zurich-based Bank Frey lists Stefan Buck as its head of private banking and a member of its
executive board on its website.

The Swiss law firm Niederer Kraft & Frey lists Edgar Paltzer as a partner on its website, and New York state records show he was admitted to the New York bar in 1988.

According to the Manhattan U.S. Attorney's office, which brought the charges, Buck's bank saw an increase of 300 percent in U.S. taxpayers as clients between the time of UBS's settlement and Wegelin's indictment in February 2012.

Around $938 million, or 44 percent, of the bank's $2.1 billion in managed assets as of September 2012 was held by U.S. taxpayers, prosecutors said.

Buck and Paltzer opened and managed undeclared accounts for U.S. clients who had been informed by other Swiss banks that they had to close their accounts there.

Both men reside in Switzerland, and neither has been arrested, prosecutors said.

Paltzer, a dual U.S.-Swiss citizen, is admitted to practice law in New York, authorities said.

The defendants each face fines and a maximum prison sentence of five years.

The case is U.S.A. v Paltzer and Buck, U.S. District Court for the Southern District of New York, No. 13-282.

Are you a US Person with a Not So Secret Foreign Bank Account?

Having FATCA Problems?Contact the Tax Lawyers at Marini & Associates, P.A.

for a FREE Tax Consultation at:

www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888 882-9243).

Source:

Reuters

Obama Budget Would Bring Parody To FATCA Information Exchange

The Obama fiscal year 2014 budget contains language that would require the United States to collect and exchange the same kinds of information under the Foreign Account Tax Compliance Act (FATCA) that the United States is seeking from other countries.

The Obama administration may soon ask Congress for the power to require more disclosure by U.S. banks of information about foreign clients' accounts to those clients' home governments, as part of a crackdown on tax evasion.

 

In a move facing resistance from some in the U.S. banking industry, two tax industry sources said the administration was considering asking Congress in an upcoming White House budget proposal for the authority to require more disclosure from U.S. banks.

As Treasury has implemented FATCA, some countries - possibly including France, Germany and China - were said to be driving a hard bargain. They have been saying that if their banks have to tell the IRS about Americans' secret accounts, then U.S. banks should have to reciprocate by disclosing more information about the U.S. accounts of French, German and Chinese nationals.

China has been publicly dismissive of FATCA, but it is talking with U.S. officials behind the scenes, sources said. "The People's Republic of China may be particularly interested in a reciprocal exchange of FATCA information," said Karl Egbert, a lawyer with law firm Dechert LLP in Hong Kong.

France and Germany "have been asking for something more like full reciprocity," said Jonathan Jackel, a lawyer with the law firm of Burt Staples & Maner LLP in Washington, D.C.

The United States already shares some taxpayer information with foreign countries with which it has a tax treaty or a formal information-sharing agreement.

The Treasury Department has acknowledged that more information sharing would be appropriate. The completed FATCA pacts include commitments "to pursue equivalent levels of reciprocal automatic exchange in the future," according to an October 2012 letter from Treasury Assistant Secretary for Tax Policy Mark Mazur to members of Congress.

The IRS this year started disclosing to some foreign governments information about bank interest payments earned by their citizens with U.S. bank accounts. This has raised privacy concerns, particularly for Mexican nationals.

"The United States should be moving toward full reciprocity," said Georgetown Law School Professor Itai Grinberg, a former Treasury official, adding it would be "deeply hypocritical" of the United States to ask for U.S. taxpayer information "without offering some kind of reciprocity."

Are you a Non-US Person with a Secret US Bank Account? 

 

Are you a US Person with a Secret Foreign Bank Account?

 

Having FATCA Problems?
Contact the Tax Lawyers at Marini & Associates, P.A.

 

 

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Toll Free at 888-8TaxAid (888 882-9243).

Source

Reuters

The IRS Can Read Your Emails If It Wants.

If you've been swapping emails with your accountant about the best way to avoid paying taxes, be aware: The IRS says it has the right to go into your account and read them.


A report from the American Civil Liberties Union, which filed a Freedom of Information Act request to find out whether the IRS is reading your emails without a warrant.

A bit of background is necessary here. When it comes to getting a warrant to read your email, the relevant law is the Electronic Communications Privacy Act, which was enacted way back in 1986. As you might expect, the law is a bit dated: According to the law, a government agency can read your email without a warrant as long as the email has been opened, or if it's been sitting in your inbox for more than 180 days. Only unopened email that's been on the server for less than 180 days requires a warrant.
aware: The IRS says it has the right to go into your account and read them.

It's exactly the kind of arbitrary distinction you might expect from a law written before email was widely used and understood. And accordingly, a Sixth Circuit appeals court ruled in 2010 that in fact, agencies needed to get a warrant before reading any emails, not just those that were new and unopened.

Before that decision, the IRS was certainly opening emails without warrants -- in fact, the ACLU got hold of an internal handbook claiming that the "the Fourth Amendment does not protect communications held in electronic storage."

The question, then, is whether those practices changed after the Sixth Circuit decision.

The ACLU is calling on the IRS to amend its procedures to bring them in line with the Fourth Amendment. In the meantime, just be aware that the taxman might sift through your inbox if he thinks you're holding something back.
 

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Source: 

 

Daily Finance

CCA Finds That Information Reporting Penalties Are Divisable Taxes For The "Full Payment Rule" for a Refund Suit.

In Chief Counsel Advice 201315017, the IRS has determined that the penalties under Code Sec. 6721 for failure to file an information return and Code Sec. 6722 for failure to furnish a correct payee statement are divisible taxes for purposes of establishing refund suit jurisdiction.

 

The penalties are calculated on a per-transaction basis, and the penalties are waived on an individual basis if the failure at issue is due to reasonable cause and not willful neglect.

 

To meet the jurisdictional requirements of a refund suit, a taxpayer must generally make full payment of assessed taxes due before the matter may be adjudicated. See Flora, 362 U.S. at 177. In general, the partial payment of assessed taxes or a proposed deficiency is insufficient to support refund suit jurisdiction. Id. 

 

The majority opinion in Flora, however, noted that one possible exception to the full payment rule might exist where certain “tax assessments may be divisible into a tax on each transaction or event, so that the full-payment rule would probably require no more than payment of a small amount.” Flora, 362 U.S. at 175-78, n.38. The Court was referring at that time to excise taxes. The Court’s analysis, however, hinged divisibility on a tax being levied on each transaction or event.

 

The CCA found that the Code Sec. 6721 and Code Sec. 6722 penalties are divisible penalties. Therefore, Taxpayer was only required to pay the divisible amount of the penalty attributable to a single failure before filing a refund claim and instituting a refund suit under Code Sec. 7422.

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More Unbelievable FBAR Penalties Cases!

A 1500% penalty rate on the taxes avoided/FBAR penalty, is imposed in a California case.

• Is a 1500% penalty constitutionally permissible?
• Of course the Defendant knowingly and voluntarily plead guilty, but should the IRS CID even be able to have the leverage to force someone to this type of penalty?

 



FBAR: Isreal & Luxemborg a warning for unreported foreign accounts

In a recent California IRS FBAR prosecution, defendants agreed to effective FBAR penalty rates of over 1500% of taxes evaded. Get the hidden story for bank accounts in Israel and Luxembourg.\

 

 

Still have unreported income from a Isreali Bank?

Felling a Bit Faclept?

Contact the Tax Lawyers of Marini & Associates, P.A.

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The US Tax System Is Stacked Against The 99%.

The Great Divide: A Tax System Stacked Against the 99 Percentopinionator.blogs.nytimes.com

The glaring unfairness of the United States tax system, with its myriad loopholes and special provisions for the wealthy, undermines not only economic growth, but the sense of shared purpose that is vital for democracy.

Cayman and BVI to Agree to FATCA with US & Bahamas will Decide on FATCA by June.

We originally posted UK mini-FATCA Agreements Spells The End for UK Tax Haven Territories! on Monday, November 26, 2012. The UK and some other European countries have negotiating FATCA agreements with the US.

 

The British Virgin Islands plan to sign a Model 1 FATCA agreement with the US, in the BVI's case a non-reciprocal one. On 4 April 2013 the BVI Government announced that it would pursue a Model I B FATCA agreement.

This closely followed the announcement on 15 March 2012 by Cayman Islands Ministry for Financial Services that the Cayman Islands would pursue a Model I Agreement.

Both announcements had been widely anticipated and both jurisdictions also intend to sign a similar arrangement for automatic provision of bank information to the UK.

Bahamas to decide on FATCA by June

The Bahamas government will decide by 1 June whether to negotiate an agreement with the US over implementation of the US Foreign Accounts Tax Compliance Act (FATCA).

 

 

Are you a US Taxpayer 

with Un-Reported Income?

With Accounts in :  Antigua and Barbuda,  Bahamas,  Barbados,  Bermuda,  Guyana,  Belize, Cayman Islands, Cook Islands,  Jersey,  Guernsey,  Isle of Man,  Grenada,  Jamaica,  Malaysia,  Malta, Mauritius,  Nauru,  Saint Kitts and Nevis,  Saint Lucia,  Saint Vincent and the Grenadines,  Sierra Leone, Singapore or  Trinidad and Tobago?

Do you Value your Personal Freedom?

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for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or

Toll Free at 888-8TaxAid (888 882-9243).

Sources:

Harney Westwood & Riegels

Nassau Guardian

Cayman Finance

Hedgeweek