By Michael Sardar
Journal of Taxation
September 2009 Edition, Vol. 111 No. 3
Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), must be filed by U.S. persons and certain non-U.S. persons to report an interest in, or authority over, a foreign financial account. The FBAR must be received by Treasury by June 30 1 to report foreign accounts held at any time (and for any length of time) during the previous year. A willful failure to file the FBAR is a felony. 2 Michael Sardar, an associate with the law firm of Kostelanetz & Fink, LLP, in New York City, analyzes one aspect of the FBAR filing requirement that tax practitioners may have overlooked—self-incrimination.
By Megan L. Brackney and Arnold Y. Kapiloff
Journal of Taxation
September 2009 Edition
Federal law imposes personal liability on fiduciaries who make distributions to beneficiaries and certain creditors, knowing that tax liabilities are owing to the government. What does this mean for an executor who discovers that the decedent had a previously unreported foreign bank account?
Amy Walsh Appears on WVOX talk show "The Issue", discussing legal issues arrising from Pnzi schemes.
This article outlines the elements of the most commonly-charged tax crimes, as well as many potential defenses and statutes of limitations issues.
Willfulness: ignorance of the law is an excuse. Tax crimes are unique in that ignorance of the law can be a complete defense. This is because “willfulness” is defined as an intentional violation of known legal duty. United States v. Abboud, 438 F.3d 554, 581 (6th Cir. 2006) (“[b]ecause of the complexity of the tax system, tax law is one of the few areas where the Supreme Court has held that ignorance of the law is a defense.”) (citing Cheek v. United States, 498 U.S. 192, 199-200 (1991)). Attorneys representing a client accused of a Title 26 crime should consider whether the conduct at issue was the result of negligence, mistake of fact, or ignorance of the contents of the tax return.
On May 25, 2007, Congress amended §6694 to raise the penalty standards for tax return preparers (the "2007 Amendment"). 2 The 2007 Amendment was met by criticism in the practitioner community, primarily because the amendment - which required preparers to have a reasonable belief that a position is more likely than not correct - created a higher standard for preparers than for taxpayers under §6662, which generally requires taxpayers to have substantial authority to avoid a penalty with respect to non-tax shelter transactions. 3 After the 2007 Amendment, Treasury issued a series of notices and proposed regulations interpreting and clarifying the operation of §6694, 4 but this guidance could not correct the inconsistency between the tax practitioner and the taxpayer penalty standards. Congress stepped in, and on October 3, 2008, a new amendment to §6694 (the "2008 Amendment") was enacted. s The 2008 Amendment reduced the general return preparer penalty standard to substantial authority, although it retained a reasonable belief/more likely than not standard for tax shelter transactions, and re-established the parity between the penalty standards for return preparers under §6694 and for taxpayers under §6662. This article discusses the facets of the new preparer penalty, including who it affects, the standards governing conduct, and the preparer's ability to rely on information and advice from others in preparing returns.
Jerald David August Presented at the American Law Institute CLE Video Webcast Event, “New Tax Return Preparer Standards: December 2008 Final RegulationsIncluding Impact on Circular 230 Standards"
On Wednesday, February 18, 2009, Jerald David August presented at the American Law Institute CLE Webcast Event, "New Tax Return Preparer Standards: December 2008 Final RegulationsIncluding Impact on Circular 230 Standards"
In December 2008, the Treasury Department issued final regulations adopting the proposed regulations in part. It also issued Notice 2009-05 providing interim guidance concerning the application of Section 6694(a) as revised by the 2008 Act so as to give immediate guidance for signing and non-signing tax preparers.