International Tax Law Archives

IRS Reminds Those with Foreign Assets of U.S. Tax Obligations

Remember that FBAR reports are due for clients on June 28th, since there are no filing extensions on FBARs and the due date of June 30th falls on a Sunday this year. The filing deadline of June 15th for U.S. citizens and resident aliens living overseas or serving in the military outside the U.S. on the regular due date of their tax return, also falls on a weekend this year, however unlike the FBAR, the filing deadline is extended to Monday, Jun 17th for those tax payers. 

Luxembourg Agrees to Share Information with the U.S.

Luxembourg has recently agreed to enter into the Model I FATCA Agreement, which provides for an automatic exchange of information between the Luxembourg and American fiscal authorities on bank accounts held in Luxembourg by citizens and residents of the United States.

IRS, Australia and United Kingdom Engaged in Cooperative Effort to Combat Offshore Tax Evasion

The tax administrations from the United States, Australia and the United Kingdom announced today a plan to share tax information involving a multitude of trusts and companies holding assets on behalf of residents in jurisdictions throughout the world.

Federal Court in San Francisco Authorizes Service of John Doe Summons on Wells Fargo Seeking the Identities of U.S. Taxpayers with Offshore Accounts

A federal court in San Francisco authorized the Internal Revenue Service (IRS) to serve a John Doe Summons seeking information about U.S. taxpayers who hold correspondent accounts at Wells Fargo for Canadian Imperial Bank of Commerce's FirstCaribbean International Bank (FCIB) and may be using such accounts to evade U.S. tax.

No IRS Form 8938 (Statement of Specified Foreign Financial Assets) is Required to File with Forms 1120, 1120S, 1065 and 1041 for 2012

Domestic Entity filers for tax year 2012 are not required to file Form 8938. The IRS anticipates issuing regulations in the future that will require a domestic entity to file Form 8938; but, until such regulations are issued, only individuals must file Form 8938.  (Source: IRS QuickAlert for Tax Professionals)

Seven Tips for Taxpayers with Foreign Income

The IRS reminds U.S. citizens and residents who lived or worked abroad in 2012 that they may need to file a federal income tax return. If you are living or working outside the United States, you generally must file and pay your tax in the same way as people living in the U.S. This includes people with dual citizenship.

IRS Revokes Voluntary Disclosure Status

In a move that could result in an end to IRS voluntary disclosure participants with offshore accounts, the IRS rescinded approval to participants who were previously granted inclusion in the voluntary disclosure program. Tens of thousands of taxpayers have participated in one of the three recent IRS voluntary disclosure programs of 2009, 2011 and 2012, providing details of banks in more than 100 foreign countries and jurisdictions, raising more than $4.4 billion in taxes. Suddenly, however, dozens of those participants, notably with accounts in Israeli banks, are receiving a curt letters from the IRS indicating the taxpayer has been disqualified. It is not clear whether it is because the taxpayers did not provide complete and full disclosures, or if this has to do with investigations of accounts prior to the application of the voluntary disclosure. Thus far, only taxpayers with accounts at Israel's Bank Leumi and Mizrahi Tefahot Bank have been affected. Stay tuned for more details.

FinCEN

The Financial Crimes Enforcement Network (FinCEN) has proposed changes to the FBAR to standardize it with other BSA electronically filed reports, add the capability for a third party preparer to file the report and record taxpayer identification numbers. To review the notice, click here.

Swiss Bank Wegelin Sentenced to Pay almost $58 Million to the U.S for Conspiracy to Evade Tax

Yesterday, a U.S. court sentenced Swiss Wegelin & Co. to pay almost $58 million (on top of almost $16 million in forfeitures) for helping Americans evade taxes on $1.2 billion in Swiss accounts. In this historic first, the U.S. indicted a foreign bank and obtained a guilty plea and sentence for facilitating tax evasion. Other banks and financial advisors who have engaged in the same conduct may be subsequent targets of U.S. investigation as the U.S. seeks to stop tax evasion through the use of offshore accounts.

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