IRS Warns Taxpayers AGAIN to Avoid Companies Claiming They Can Settle Your Tax Debt "For Pennies on the Dollar" - Call Us to Speak With Real Experienced Tax Attorneys

On  Jun 14, 2022 we posted IRS Warns Taxpayers Again to Avoid Companies Claiming They Can Settle Your Tax Debt "For Pennies on the Dollar" - Call Us  to Speak With Real Experienced Tax Attorneys where we discussed that in its 2022 “Dirty Dozen” tax scams the IRS warned people to watch out for Offer in Compromise mills which contort the IRS program into something it’s not, misleading people with no chance of meeting the requirements while charging excessive fees, often thousands of dollars. 

Taxpayers should be especially wary of promoters who claim they can obtain larger offer settlements than others or who make misleading promises that the IRS will accept an offer for a small percentage. 

Companies Advertising On TV Or Radio
Frequently Can’t Do Anything For Taxpayers ...

Now in IR-2023-63, dated March 30, 2023, the IRS again cautioned taxpayers with pending tax bills to contact the IRS directly and not go to unscrupulous tax companies that use local advertising and falsely claiming they can resolve unpaid taxes for pennies on the dollar.

IR-2023-63 goes on to state that "An Offer in Compromise "mill" will usually make outlandish claims, frequently in radio and TV ads, about how they can settle a person's tax debt for cheap. In reality, the promoter fees are often excessive...This takes unnecessary money out of the taxpayer's wallet."

For more information about Tax Relief Companies see the Federal Trade Commission web site detailing how Tax relief companies use the radio, television and the internet to advertise help for taxpayers in distress. 

In reality, most taxpayers don't qualify for the programs these fraudsters hawk, their companies don't settle the tax debt, and in many cases don't even send the necessary paperwork to the IRS requesting participation in the programs that were mentioned. Adding insult to injury, some of these companies don't provide refunds, and leave people even further in debt.

The majority of tax settlement companies charge their clients an initial fee that can easily run anywhere between $3,000 to $6,000, depending on the size of the tax bill and proposed settlement. In most cases, this fee is completely nonrefundable. This fee quite often mysteriously mirrors the amount of free cash the client has available. This is generally the amount of cash the company says it will save the client in tax payments.

"No one can get a better deal for taxpayers, than they can usually get for themselves by working directly with the IRS to resolve their tax issues," said IRS Commissioner Chuck Rettig. 

While we agree with the Commissioner that taxpayers should avoid tax fraudsters & OIC tax mills, who falsely promise to settle their debts for "Pennies on the Dollar" 

Advising Taxpayers That'll Get The Best Deal By Dealing Directly With The IRS, Is Simply Not Supported By The Facts.

Hiring an Experienced Tax Attorneys, who knows all the different IRS alternatives for settling IRS debt, has always proven to be the best alternative for a taxpayer desiring to SOLVE their IRS debts! 

Have a Tax Problem?    

 

Real Tax Problems Require

Real Tax Attorneys!

 

Contact the Tax Lawyers at 

Marini & Associates, P.A. 

 for a FREE Tax Consultation Contact US at

www.TaxAid.com or www.OVDPLaw.com

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

 

 



A Swiss Executive Plead Guilty To Conspiring to Hide $60M From IRS

According to the DoJ, Daniel Wälchli pled guilty on March 30, 2023 to conspiring to defraud the United States in connection with a scheme to help wealthy American clients conceal more than $60 million in income and assets held in undeclared offshore bank accounts and evade U.S. income taxes.  

Wälchli was a member of the executive board of a Swiss holding company that owned, among other entities, a Zurich-based private bank called Privatbank IHAG Zurich AG (“IHAG”). 

According to the allegations in the Indictment, court filings, and statements made in Court:

From in or about 2009 to in or about 2014, Wälchli and his co-conspirators defrauded the IRS by concealing income and assets of three wealthy U.S. clients with undeclared bank accounts at IHAG.  

In order to assist the U.S. clients, Wälchli and his co-conspirators devised and implemented a scheme dubbed the “Singapore Solution” to fraudulently conceal the bank accounts of the U.S. clients, their assets, and their income from U.S. authorities.  

In furtherance of the fraudulent scheme, Wälchli and his co-conspirators agreed to transfer more than $60 million from undeclared IHAG bank accounts of the U.S. clients through a series of nominee bank accounts in Hong Kong and other locations before returning the funds to newly opened accounts at IHAG in the name of a Singapore-based asset-management firm that Wälchli helped establish.  

The U.S. Clients Paid Large Fees To IHAG And Others To Help

Them Conceal Their Assets And Evade U.S. Income Taxes.

Wälchli, 55, of Switzerland, pled guilty to one count of conspiracy to defraud the United States, which carries a maximum sentence of five (5) years in prison. 

According to Law360 Walchli was one of six executives who along with Zurich-based Allied Finance Trust AG were named in an indictment unsealed in 2021 as aiding the American taxpayers using the Singapore Solution scheme.

Wayne Franklyn Chinn, one of the clients who the DOJ said benefited from the scheme, pled guilty to one count of tax evasion in 2021. According to associated documents also unsealed in 2021, Chinn hid about $5 million from the IRS between 2001 and 2018 and held income in IHAG accounts, according to the DOJ. 

Chinn agreed to turn over $2.2 million in civil forfeitures held in five accounts at two Singapore banks and faced up to five (5) years in prison and possible time under supervised release, restitution and monetary penalties, the DOJ said.

In 2021, Chinn was sentenced to five (5) years probation, including 18 months of house arrest, and restitution of $789,000.

Do You Have Undeclared Offshore Income?

 

Want to Know if the OVDP Program is Right for You? 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 

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

Current US Resident Ordered To Repatriate $17.9M For FBAR Violations - What Next?

On January 9, 2023 we posted An Expatriating Taxpayer, With FBAR Penalties, May Create New Precedent For Collection Outside the US? - Don't Think So! where we discussed a Floridian who moved his assets offshore and sold him house in the wake of an $18 million penalty for failing to report foreign bank accounts, the U.S. should be allowed to seize the overseas funds, the U.S. told a Florida federal court on January 6, 2023. Isac Schwarzbaum has not paid any amount he owes, forcing the U.S. to repatriate the funds he has deposited in several Swiss banks, the U.S. said in a motion to repatriate foreign assets.

Now according to Law360, he has been ordered to transfer enough money from his overseas accounts to cover the debt, a Florida federal judge ruled, rejecting the man's arguments the court lacked authority to order the repatriation.

Isac Schwarzbaum, A Dual U.S.-German Citizen,
Must Transfer The Money Into A U.S. Bank Account
In His Name By April 28,
U.S. District Judge Beth Bloom Ordered.

While Schwarzbaum had argued the court lacked authority to order the money transfer while his appeal of the judgment in the Eleventh Circuit is pending, Judge Bloom said an appeal alone does not automatically pause the enforcement of a judgment. Further, Schwarzbaum never asked the court for a stay, Judge Bloom said.

"Absent The Entry of a Stay, a District Court Retains Jurisdiction — Via Contempt Or Other Means — To Enforce Its Judgment During The Pendency Of An Appeal,"
Bloom Said In The Order.

The government asked the court for the repatriation order in January, alleging Schwarzbaum "has no intention" of paying the court's judgment. Judge Bloom found that he owed over $17.9 million — including interest and late-payment penalties — for willfully failing to file foreign bank and financial account forms.

According to the government, Schwarzbaum sold his home in Florida in June 2020, less than three months after Judge Bloom concluded that he showed reckless conduct that amounted to a willful failure to file FBARs for 2007 through 2009. After "fleeing the country," Schwarzbaum has kept no assets in the U.S., yet reported to the government in 2021 that he had more than $37 million in three Swiss banks, according to the government.

Schwarzbaum argued it was improper for the court to rule on the merits of the government's motion for repatriation while his appeal was pending. Further, he claimed he couldn't repatriate assets that were never originally in the U.S. He also rejected the government's allegations that he fled the country or aimed to render himself judgment-proof, saying he "lives a highly mobile lifestyle, never living in the United States full time."

Judge Bloom said Tuesday that the court already had struck down Schwarzbaum's argument that the assets needed to have originated in the U.S. to qualify for repatriation. The court also rejected Schwarzbaum's argument that only outstanding tax liabilities are subject to repatriation.

The Question Now Is How Does The IRS
Levy On Assets Outside The US? 

or 

Against a Taxpayer Who Is No Longer AUS Resident,
Where Mr. Schwarzbaum Leaves The US?

Can't Wait To See The Answer To This One!

Do You Have Undeclared Offshore Income?

Contact the Tax Lawyers at 

Marini & Associates, P.A. 
 

for a FREE Tax Consultation contact us at:
www.TaxAid.com or www.OVDPLaw.com 

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

Another Willful Taxpayer Wrongfully Submits a Streamline Filing and Gets Jail Time

According to DoJ, a former CFO of a russian natural gas company was convicted of making false statements to the IRS, failing to disclose offshore accounts and failing to file tax returns.

A federal jury found a Florida man guilty of failing to file a Report of Foreign Bank and Financial Accounts (FBAR), making a false statement to the IRS, and willfully failing to file tax returns. 

According to court documents and evidence presented at trial, from 2005 to 2015, Mark Anthony Gyetvay of Naples, Florida, concealed his ownership and control over substantial offshore assets and failed to file and pay taxes on millions of dollars of income. 

After working as a certified public accountant (CPA) in the United States and Russia, Gyetvay became the chief financial officer of Novatek, a large Russian gas company. 

Beginning in 2005, Gyetvay opened two different accounts at a bank in Switzerland to hold substantial assets, which at one point had an aggregate value of over $93,000,000. 

Over a period of several years, Gyetvay took steps to conceal his ownership and control over these funds, including removing himself from the accounts and making his then-wife, a Russian citizen, the beneficial owner of the accounts. Additionally, despite being a CPA, Gyetvay did not file his 2013 and 2014 U.S. tax returns.

Gyetvay did not file FBARs, as required, to disclose his control over the Swiss bank accounts, at times, rejecting his accountant’s recommendation to do so. 

In An Unsuccessful Attempt To Avoid Significant Financial Penalties, Gyetvay Made A False Filing With The IRS Using
The Streamlined Foreign Offshore Procedures, Available
Only To Taxpayers Whose Failure To Report Offshore
Assets And Income Is Due To Non-Willful Conduct.

He is scheduled to be sentenced on September 21, 2023, and faces a maximum penalty of 

• five (5) years in prison for failing to file an FBAR, 
• five years (5) in prison for making a false statement and 
• one  (1) year in prison for each willful failure to file a tax return. 

Do You Have Undeclared Offshore Income?

 

Want to Know Which OVDP Program is Right for You? 

Contact the Tax Lawyers at 

Marini & Associates, P.A.   

for a FREE Tax Consultation contact us at:

www.TaxAid.com or www.OVDPLaw.com 

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

Technical Advice Concludes That A $1 Nominal Claim Will Not Protect The Statute of Limitations

According to ProcedurallyTaxing, Chief Counsel’s office issued Program Manger Technical Assistance (PMTA) 2023-001 to address the issue of a $1 claim filed in order to try to protect the statute of limitations for filing claims.  The advice concludes that the $1 or any nominal claim will not protect the taxpayer but it also distinguishes nominal claims from protective claims. 

It then goes on to state that "A late-filed claim will not be treated as an amendment or “supplement” to an original claim if it would require the investigation of new matters that would not have been disclosed by the investigation of the original claim."

Essentially, the PMTA takes the position that putting down a nominal amount does not create the type of informal claim a taxpayer can later fix.  

For more regarding exceptions to this rule go to ProcedurallyTaxing.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

IRS Issues Guidance Related To The Treatment Of Certain Nonfungible Tokens (NFT) As Section 408(M) Collectibles

In Notice 2023-27 the Treasury Department and the IRS announced that they intend to issue guidance related to the treatment of certain NFTs as section 408(m) collectibles. 

This treatment is also relevant for other purposes of the Code, including the long-term capital gains tax rate under section 1(h). The notice also describes how the IRS intends to determine whether an NFT constitutes a section 408(m) collectible, pending the issuance of that guidance, and requests comments generally on the treatment of NFTs as a section 408(m) collectible, as well as comments on specific questions listed in the notice.

A Nonfungible Token (NFT) Is A Unique Digital
Identifier That Is Recorded Using Distributed Ledger
Technology And May Be Used To Certify Authenticity
And Ownership Of An Associated Right Or Asset.

Distributed ledger technology, such as blockchain technology, uses independent digital systems to record, share and synchronize transactions, the details of which are recorded simultaneously on multiple nodes in a network. A token is an entry of data encoded on a distributed ledger. A distributed ledger can be used to identify ownership of both NFTs and fungible tokens, such as cryptocurrency, as described in Rev. Rul. 2019-24.

Section 408(m)(2) of the tax code provides for a specific list of items that constitute collectibles for certain purposes. Acquisition of a collectible by an individual retirement account (IRA) or individually-directed account of a qualified plan is treated as a distribution from the account equal to the cost to the account of the collectible. Generally, collectibles also do not have as advantageous capital-gains tax treatment as other capital assets.

Until additional guidance is issued, the IRS intends to determine when an NFT is treated as a collectible by using a “look-through analysis.” Under the look-through analysis, an NFT is treated as a collectible if the NFT’s associated right or asset falls under the definition of collectible in the tax code. For example, a gem is a collectible under section 408(m); therefore, an NFT that certifies ownership of a gem is a collectible.

In Notice 2023-27, the Treasury Department and the IRS are requesting comments on any aspect of NFTs that might affect the treatment of an NFT as a collectible as well as certain comments specifically set out in the notice.

Have an IRS Tax Problem?

     Contact the Tax Lawyers at

Marini & Associates, P.A. 

for a FREE Tax HELP Contact us at:
www.TaxAid.com or www.OVDPLaw.com
or Toll Free at 888 8TAXAID (888-882-9243)

Willful Taxpayer Tries To Stretch Bittner, But Bittner Was a Nonwillful Case - Lots of Luck!

On February 20, 2023, we posted SCOTUS Ruled That Non-willful Failure To File A FBAR Report Warrants a $10,000 Penalty Per Form Not Per Account!, where we discussed that the U.S. Supreme Court ruled on February 28, 2023, in Alexandru Bittner v. U.S., case number 21-1195, that the Bank Secrecy Act's $10,000 maximum penalty for the nonwillful failure to report foreign bank accounts applies on a per-form basis and not per account. 

Now According to Law360, in U.S. v. Katholos, case number 1:17-cv-00531, in the U.S. District Court for the Western District of New York, a woman given a $4.5 million penalty for willfully failing to report a foreign bank account told a New York federal court that a recent ruling by the U.S. Supreme Court should reduce that amount.

In Bittner v. U.S., the court found the $10,000 maximum penalty for nonwillful failure to report foreign bank accounts applies annually and not per account, should apply to Marika Katholos, according to her attorneys. The decision should mean Katholos' penalty is capped at $100,000 instead of 50% of the balance in the account, the lawyers told the U.S. District Court for the Western District of New York.

The U.S. Department of Justice, however, said that Bittner is irrelevant to Katholos' case. Bittner applies to nonwillful violations, whereas the U.S. said Katholos deliberately failed to identify her accounts. The Bittner case also involved multiple bank accounts, whereas there is only a single account at issue in Katholos' case, the government added. 

Katholos' attorneys argued the majority in Bittner noted that many tax professionals were unaware of the reporting requirement until the government began aggressive enforcement around 2008 or 2009. That may have included the tax professionals advising Katholos, who took their misguided advice. The attorneys sought permission for an expert witness to testify in a proceeding to reconsider whether she made an honest mistake.

The court requested letters March 1 from each party explaining how the Bittner decision could affect the case.

Have an FBAR Penalty Problem?  

 

 Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax Consultation at: 

www.TaxAid.com or www.OVDPLaw.com 
or Toll Free at 888-8TaxAid (888) 882-9243