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Can IRS Be Trusted? A Troubling New Development in the Offshore Voluntary Disclosure Program

By Brian P. Ketcham
WG&L Journal of Taxation
May 2013 Edition

An unexpected new development casts doubt about the future success of the Service's major initiative in the campaign against hidden offshore accounts. Even more distressing are the implications for taxpayers in general about trusting IRS statements.

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New Guidance Provides Limited Relief from Penalties for Failure to Comply with List Maintenance Requests

By Bryan C. Skarlatos and Megan L. Brackney
J
ournal of Tax Practice & Procedure
April - May 2013 Edition

Imagine you are a partner at an accounting fi rm and you discover that, several years ago, one of your partners provided advice to a few clients regarding a type of retirement plan that was a reportable transaction. After auditing the taxpayers, the IRS is now focusing on your fi rm as a possible material advisor and has requested the fi rm to provide a list with respect to all reportable transactions for which it was a material advisor. Failure to provide the requested information within 20 days of the request can result in crushing penalties of as much as $10,000 per day!

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GAO Encourages IRS to Clamp Down on Quiet Disclosures

By Megan L. Brackney
Tax Analysts
April 2013 Edition

The Government Accountability Office in a report released April 26 lauded the success of the IRS's offshore voluntary disclosure programs but encouraged the agency to use the obtained information to identify taxpayers with unreported accounts who might be trying to stay under the radar.

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NYCLA’s Taxation Committee Files Amicus Curiae Brief Urging the United States Supreme Court to Protect the Fifth Amendment Act of Production Privilege

By Megan L. Brackney
The New York County Lawyer
April 2013 Edition

Almost every day, there is a new headline related to United States taxpayers with unreported offshore bank accounts. In one of its latest enforcement efforts, the United States government has been serving grand jury subpoenas on hundreds of taxpayers who are suspected of having foreign bank accounts, ordering them to produce their own account records, in effect to aid their own prosecutions for tax evasion and other offenses. i These subpoenas present a significant constitutional question: is the act of producing foreign account records a testimonial act protected by the Fifth Amendment privilege against self-incrimination?

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Jerald David August Presented at the American Law Institute CLE On-Demand Event, “Complying with IRS Circular 230: What Tax Practitioners Need To Know"

On Thursday, March 28, 2013, Jerald David August presented at the American Law Institute CLE Webcast Event, "Complying with IRS Circular 230:What Tax Practitioners Need To Know"

This up-to-date and authoritative program features Karen L. Hawkins, Director of the Office of Professional Responsibility (OPR) of the Internal Revenue Service, who will be interviewed by Jerald David August, tax partner at Fox Rothschild LLP and frequent speaker and moderator for ALI CLE tax law programs.

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OVDP Disqualifying Previously Cleared Offshore Account Holders

By Robert S. Fink
Tax Analysts
March 2013 Edition

"I've heard a lot of hysteria about this in the last couple of days but to my knowledge, Bank Leumi has not given over names" to the government, said Robert S. Fink of Kostelanetz & Fink LLP, who added that he has been in touch with the bank. "I started seeing [these letters] two years ago, which is why I don't understand what this hoopla [now] is all about," he said.

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"OVDP Disqualifying Previously Cleared Offshore Account Holders" (Tax Analysts)

"OVDP Disqualifying Previously Cleared Offshore Account Holders" (Tax Analysts)

"OVDP Disqualifying Previously Cleared Offshore Account Holders" (Tax Analysts)

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Hit the Road, Jack: Changing the Tax Matters Partner

By Megan L. Brackney
Journal of Passthrough Entities
January - February 2013

There are many situations where a partnership may want to change its Tax Matters Partner (“TMP”). Treasury Regulations and case law describe circumstances such as the death, dissolution, bankruptcy or criminal prosecution of the TMP where the TMP designation is automatically terminated. The partnership also may have other reasons for wanting to change its TMP, including conflicts of interest or lack of faith in the TMP’s ability to discharge his or her duties or in the TMP’s judgment. This column describes the procedures for termination and replacement of the TMP before the IRS and after a partnership matter has been docketed in Tax Court.

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Bryan C. Skarlatos quoted in WSJ, March 7, 2013, "Offshore Tax Probe Picks Up"

Bryan C. Skarlatos quoted in WSJ, March 7, 2013, "Offshore Tax Probe Picks Up"

Bryan C. Skarlatos quoted in WSJ, March 7, 2013, "Offshore Tax Probe Picks Up"

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Bad Facts Make Bad Law: The Tax Court Unnecessarily Used Willful Blindness to Find Fraud in Fiore.

By Bryan C. Skarlatos and Henry Stow Lovejoy
Journal of Tax Practice & Procedure
February - March 2013 Edition

Willful blindness is a judicially created concept that equates intentional avoidance of knowledge of a fact with actual knowledge of the fact for purposes of proving the elements of an offense. To support a finding of civil fraud, the IRS must prove by clear and convincing evidence that the taxpayer willfully underreported tax. Sometimes, courts use the concept of “willful blindness” to tip the balance of evidence in favor of a finding of fraud. However, if “willful blindness” is used when it does not properly apply to the facts at hand, it can lead to confusion between negligence and fraud. This is what happened in the case of O.G. Fiore,1 where the Tax Court unnecessarily used willful blindness to impose a fraud penalty even though it easily could have found that there was clear and convincing evidence of actual fraudulent intent. 

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