By Megan L. Brackney
NYCLA Committee Connection
The recent federal indictment of the Swiss bank Wegelin & Co. alleging charges of conspiracy to defraud the United States, and the well publicized criminal investigations of eleven other banks in Switzerland and Israel, including Credit Suisse Group, AG, Julius Baer Group LTD., and Bank Leumi Le-Israel BM, have renewed concerns of U.S. taxpayers with unreported foreign financial accounts.
By Juliet L. Fink
NYSSCPA, Tax Stringer
January 2012 Edition, Vol. 3, No. 1
On Sept. 21, 2011, the IRS announced a new voluntary disclosure program, the Voluntary Classification Settlement Program (VCSP), to provide an incentive for taxpayers to comply with their employment tax obligations. The VCSP is part of a larger “fresh start” initiative by the IRS to encourage taxpayers and businesses to become compliant while giving them financial certainty under the VCSP’s penalty framework. As described in IRS Announcement 2011-64, under the VCSP, eligible businesses will pay minimal back taxes and avoid all interest and penalties if they properly reclassify workers from nonemployees or independent contractors to employees for future tax periods. The VCSP currently has no deadline.
Penalties: The IRS Continues to Attack Unreported Foreign Bank Accounts by Criminally Indicting Three Swiss Bankers
By Bryan C. Skarlatos
Journal of Tax Practice & Procedure
December 2011 - January 2012 Edition
There is nothing illegal about owning a foreign bank account, but United States citizens or residents with foreign accounts must be careful to properly report such accounts on tax returns and reports of foreign bank accounts. By now, almost everyone knows the story of UBS and how the Department of Justice (the “DOJ”) and the IRS effectively broke through Swiss bank secrecy and compelled UBS to turn over names of thousands of its U.S. account holders. The important thing about the UBS story is that it is just the fi rst chapter of a longer narrative in which the DOJ, the IRS and Congress are continuing to hack away at bank secrecy laws, not just in Switzerland, but around the world, in an effort to force all U.S. citizens or residents with foreign bank accounts to report the existence of, and income earned in, those accounts. The latest development in this drum-beat of enforcement is the indictment of three Swiss bankers for conspiring with U.S. taxpayers to help them evade U.S. tax.
Robert S. Fink, Author
Kevin M. Flynn, Contributing Author
Sharon L. McCarthy, Contributing Author
Amy Walsh, Contributing Author
Tax Controversies: Audits, Investigations, Trials, 2 Vols. (Lexis/Nexis, 30th Rev. 2011)
As a CPA or tax lawyer, your client relies on your advice. You may believe that by relying on your advice, your client is protected against the assertion of penalties by the IRS. In fact, the Supreme Court, in United States v. Boyle, said that when an accountant or attorney advises a taxpayer on a matter of tax law, it is reasonable for that taxpayer to rely on that advice, without seeking a second opinion or personally monitoring the tax law.
By Sidney Kess
New York Law Journal
November 2010 Edition
Earlier this year, the IRS announced that it was proposing new registration, testing, and continuing education requirements for tax return preparers (IR-2010-1, 1/4/10). The IRS has now begun to implement these requirements. The IRS has also stepped up criminal investigations of tax return preparers believed to have assisted in the filing of fraudulent returns.
By Megan L. Brackney
Criminal Justice Magazine
Fall 2010 Edition
The recent turnover of information by UBS AG in Switzerland regarding United States taxpayers with previously unreported foreign accounts has resulted in a wave of criminal tax prosecutions. This enforcement initiative has ensnared many noncitizen taxpayers who may suffer the double impact of a criminal conviction and automatic and permanent removal from the United States. This article focuses on the immigration consequences of tax c1imes generally and in the specific context of the willful failure to report an offshore account. The article begins with some background on the prosecution of taxpayers with unreported offshore accounts; it then discusses the most commonly charged tax crimes and the current state of the immigration law as to whether federal tax crimes other than tax evasion are indeed removable offenses. It concludes by presenting some ideas for ameliorating the immigration consequences of conviction for a tax crime.
By Michael Sardar
Journal of Taxation
September 2010 Edition
Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), must be filed by U.S. persons to disclose ownership, signatory, or other authority over a foreign bank, security or financial account. Harsh civil and criminal penalties can be imposed for a willful failure to file the FBAR.1 The willfulness element of both of the FBAR penalty provisions will be examined below.
By Bryan C. Skarlatos
Practical Law The Journal
In Textron, Inc. v. United States, the Supreme Court refused to grant certiorari to review the First Circuit’s decision denying Textron’s claim that its tax accrual workpapers were protected from disclosure to the IRS by the work product doctrine. PLC asked Bryan Skarlatos of Kostelanetz & Fink, LLP to explain the work product doctrine and the impact of the Textron decision.
By Bryan C. Skarlatos & Michael Sardar
New York University 68th Institute On Federal Taxation
For nearly four decades, the law has required United States taxpayers to file Reports of Foreign Bank and Financial Accounts ("FBARs") disclosing the existence of foreign bank accounts holding more than a certain amount of money. 1 However, until recently, most taxpayers and many tax professionals had no idea these reporting obligation and they were rarely enforced. That has all changed with the recent investigation of UBS and the subsequent focus on offshore financial assets. The IRS has signaled that it intends to police the FBAR reporting requirements with much more vigilance.2 The evolution of the FBAR reporting requirements from a relatively obscure form that most taxpayers and tax return preparers did not know about into one of the IRS's most significant enforcement priorities in years raises questions about when it is appropriate for the IRS to penalize taxpayers who failed to file past years' FBARs.