Would Require Non-U.S. Banks to Comply with U.S. Subpoenas on Pain of Losing Ability to Conduct U.S. Correspondent Banking
The U.S. Senate is advancing legislation that could create substantial challenges for non-U.S. banks operating in the United States. Senate Bill 1241, known as the “Combating Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017,” has strong bipartisan support and could be passed and signed by the President into law in this year.
On December 11, 2017, the New York County Lawyers Association held its 103rd annual dinner, which included the awarding of the 2017 Boris Kostelanetz President’s Medal — named in honor of the 33rd President of NYCLA, Boris Kostelanetz, and conferred upon a member whose record of dedication and service to the Association and to the legal profession comports with the highest standards.
By Claude M. Millman
New York Nonprofit Media
November 2016 Edition
New York City’s Vendor Information Exchange System (VENDEX) is an annoyance for organizations dependent on city funding. While it’s tempting to treat VENDEX compliance as clerical, it warrants attention from top executives. Perfect VENDEX compliance can be difficult, and complacency can lead to the filing of false data.
By Kevin M. Flynn
The CPA Journal
September 2016 Edition
Filing a claim for refund of overpaid tax invoices much more than just submitting an amended return to the IRS with an explanatory statement that more than the correct amount of tax was paid. The refund claim, if denied, will form the basis of any suit for a refund commenced in a federal district court or the U.S. Court of Federal Claims.
Proposed Regulations on Disguised Payments for Services Issued Last Summer by Treasury Still Attracting Attention and Concern From Service Partners, Including Private Equity and Funds Managers
Last Summer the Service issued a set of proposed regulations with respect to Section 707(a)(2)(A). This provision involves an arrangement where: (i) involving a partner who provides services (or transfers property) to a partnership; (ii) there is a related direct or indirect allocation and distribution to that partner; and (iii) the performance of the services (or transfer of property) and the allocation and distribution, when viewed together, are in substance compensation for the performance of services (or payment made in exchange for the property) as if the partner was acting other than in his capacity as a party. In such case the distribution will be treated as compensation income to the partner-service provider. The purpose of the disguised services rule is to prevent partners from converting ordinary income into capital gains. As to the partnership, the compensation payments may be required to be capitalized.
In general Section 707(a), along with Section 707(c), provide limited exceptions to the generally accepted rule that a partner cannot receive compensation from a partnership. The proposed regulations provide additional guidance under Section 707(a)(2)(A) and propose conforming changes to Section 707(c) and changes to the issuance of profits interest to service providers under the established safe harbor guidelines in Rev. Proc. 93-27, 1993-2 C.B. 343, clarified in Rev. Proc. 2001-43, 2001-2 C.B. 191. Partnership allocations that are determined with regard to partnership income and that are made to a partner for services rendered by the partner in its capacity as a partner are generally treated as distributive shares of partnership income, taxable under the general rules of sections 702, 703, and 704. As to profits interests, the Treasury and Service announced in the notice of the proposed regulations their intent to modify the exceptions in the cited revenue procedures to include an additional exception for profits interests where a partner waives his right to a payment of a substantially fixed amount for the performance of services, including a guaranteed payment under Section 707(c) or a payment in a non-partner capacity under Section 707(a).
As of this date, the proposed regulations have received comments, including a fair amount of criticism, but have not been issued in final form.
By Lee A. Sheppard
Bryan C. Skarlatos is quoted in the Tax Notes article, "News Analysis: Be Nice to Whistleblowers" by Lee A. Sheppard. With the whistleblower program celebrating its 10th anniversary, practitioners still complain about an unwillingness to take hard cases, lack of communication, and slowness in the payment of awards. In an excerpt from the article:
"LB&I has its own culture and beliefs about how things should be done. "There's a cultural issue," said Zerbe. Skarlatos said that he got the sense that overworked LB&I revenue agents, who are very expert in their specialties, seem to resent the help and may not recognize the value of the information. Zerbe concurred that it is difficult to sell LB&I on a case involving an insider at a Fortune 500 company. "C'mon, guys, this guy got fired for what he disclosed!" said Skarlatos, who praised the quality of the evidence offered by insiders.
LB&I has an audit plan and may be reluctant to take up a case when its audit of the reported company has been completed. "It's tough changing the audit plan," Skarlatos noted. There is no placeholder in the audit plan for issues raised by whistleblowers. Zerbe wanted the Whistleblower Office to have the power to go to the commissioner to change the audit plan, that is, essentially reopen the audit of the reported company."
Bryan C. Skarlatos Quoted in Tax Analysts Article, "U.S. Taxpayer Revelations From Panama Leak Expected to Be Modest"
By Amanda Athanasiou
The data are unlikely to reveal large-scale noncompliance by U.S. taxpayers that hasn't already been disclosed or cleaned up, said Bryan C. Skarlatos of Kostelanetz & Fink LLP. "The main contribution of this data is that it's lifted back the curtain, enabling us to see evidence of hidden accounts and bearer share company structures that the public hears about, but never really sees," Skarlatos said. The primary impact in the U.S. will be to raise awareness about how bank secrecy works around the world, through the use of those bearer share corporations, he added.
Jerald David August Quoted In Bloomberg Article, "Amid Inversion Crackdown, IRS Blesses Delphi's British Domicile"
Excerpt from the "Unique Obstacles" section of the article:
The Delphi case may have presented unique obstacles, said Jerald David August, a partner at Kostelanetz & Fink LLP, a New York tax firm. The IRS may have worried that a loss in court would force it to revise a round of anti-inversion regulations from 2009, he said -- or that the case would bring unwelcome attention to the administration’s own role in Delphi’s expatriation. The company shifted its tax address as part of the fallout from General Motors Co.’s 2009 bankruptcy and bailout, which were overseen by Obama’s administration.
“The government threw in the towel when it may have had a strong case to present to a court to review,” said August, who wasn’t involved in the case. “The stakes involved in presenting this issue for full review may have had other, non-tax repercussions.”
For their part, Delphi officials had always insisted their case was strong and pledged in securities filings to “vigorously” defend their position. On Wednesday, the company declined to comment beyond saying it’s “satisfied” with the IRS’s decision. The IRS also declined to comment.
By Sharon L. McCarthy
Women Criminal Defense Attorney Blog
Every once in awhile, we meet people who truly inspire us to be better people and better lawyers. Marjorie Peerce is one of those people. As a partner in the New York office of Ballard Spahr she focuses her practice on white collar, regulatory and commercial defense. Yet since 2014, in addition to her busy practice, she has made time to work tirelessly to recruit and train volunteer lawyers to provide free legal assistance to federal inmates who may be eligible to have their sentences commuted or reduced by the President of the United States. Over 3,000 attorneys across the country have volunteered their time to work on this project, including 100 lawyers from Ballard Spahr. Every application submitted by Ballard Spahr is reviewed by Marjorie. She recently saw the first fruits of her labor and that of her colleagues when, on March 29, 2016, Obama granted clemency to 61 federal inmates, 25 of whom came through Clemency Project 2014 and two of whom were represented by Ballard Spahr attorneys.