November 2011 Archives

Tax Problem Attorney Blog Named to Top 20 Tax Law Blogs List

November 22, 2011,

Brager Tax Law Group appreciates all the votes that came in for our Tax Problem Attorney Blog and is proud to announce that Tax Problem Attorney Blog has been named one of the top 20 Tax Law Blogs by LexisNexis.

The voting isn't over, though. Brager Tax Law Group is asking for your vote once again in the selection of the Top Tax Law Blog of the year. You will need to be registered in order to vote. If you haven't previously registered, follow this link to create a new registration or use your sign in credentials from your favorite social media site. Registration is free and does not result in sales contacts.

Then follow this link to VOTE and check the box Tax Problem Attorney Blog. tax-law-topblog-220x180.jpg

Voting ends on November 28, 2011 so be sure to Vote!!!

We appreciate your support.

Swiss Bank Account Holders of Exposure for Tax Fraud and Failure to File FBARs Is Greater Than Ever

November 18, 2011,

Until recently even some well-informed tax attorneys assumed that short of disclosure under the Foreign Account Tax Compliance Act (FATCA) in 2013, the IRS would have a difficult time getting information from Swiss banks without litigation. As a result some owners of Swiss financial accounts assumed that they could avoid disclosure to the IRS by closing their offshore account prior to 2013. While there are various treaties which require Swiss banks to turn over account information with regard to individuals who have committed tax fraud or tax evasion, in the past this has been interpreted as requiring the IRS to provide among other things the name of the taxpayer it was investigating. Apparently not any more!
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In what appears to be the final nail in the coffin of alleged Swiss Bank secrecy, a committee of the upper house of the Swiss Parliament recommended that the upper house approve a proposed addendum to the June 2010 ratification resolution on the 2009 protocol to "clarify" that so called nameless, behavioral-pattern based requests are allowed under the 1996 double taxation treaty with the U.S.

In a related development on November 16th the Swiss Federal Council approved an amendment to the ordinance implementing the Swiss-U.S. double taxation treaty to provide notice to U.S. clients of Swiss banks who are the subject of so-called behavioral-pattern based administrative assistance requests from the U.S. Notice will be provided by publishing the U.S. administrative request in the Federal Gazette. Unfortunately the Federal Gazette is not published in English, and the Swiss Federal Tax Authority (SFTA) has been tasked with the job of alerting the U.S. media.

So what are the requirements of a nameless behavioral-pattern based request?

1. It must indicate why the requested information is necessary and relevant;
2. It must give a detailed description of the alleged behavioral pattern;
3. It must explain why it can be assumed that the person fitting the alleged behavioral pattern has not fulfilled his legal obligation; and
4. It must show a credible act of active, fraudulent behavior by the bank, or its employees.

It is not difficult to see the IRS putting together a number of these requests to find the names of previously unknown taxpayers, and it may well explain the recent announcement by Credit Suisse (we wrote about this tax problem here) that it has been required by the SFTA to turn over the names of some of its clients to the IRS.

Continue reading "Swiss Bank Account Holders of Exposure for Tax Fraud and Failure to File FBARs Is Greater Than Ever " »

Swiss Bank Account Information To Be Turned Over by Credit Suisse

November 11, 2011,

The Swiss Federal Tax Authority (SFTA) has ordered Credit Suisse to submit offshore bank account information in response to an IRS request for assistance, according to a New York Times article. Credit Suisse has notified some of its offshore account holders by letter about the order. Apparently the order is not directly related to the IRS negotiations going on with approximately 11 Swiss banks to turnover the names of all of their U.S. clients. Instead, it appears from the New York Times article that these requests relate to individuals who the IRS already has reason to believe have foreign bank accounts. If that is the case then it may be too late for these individuals to file a voluntary disclosure with the IRS to attempt to escape criminal penalties. Still in some cases a late voluntary disclosure is better than no disclosure. Without a detailed examination of all of the facts and circumstances there is no way of advising someone as to the best path to take.

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Although account holders may appeal the SFTA decision, the act of doing so requires that they notify the U.S. government that an appeal has been filed. Failure to do so could result in separate penalties. Sort of a catch twenty two.

The SFTA order to Credit Suisse highlights the noose that the IRS is attempting to tighten around the neck of offshore account holders who failed to file their Foreign Bank Account Reports (FBAR) on TDF 90-22.1. The civil penalty for willfully failing to file the FBAR can be up to 50% of the account balance so even if no jail time ensues it is still a very expensive proposition.

Continue reading "Swiss Bank Account Information To Be Turned Over by Credit Suisse " »

Tax Problem Attorney Blog Nominated for Top 20 Tax Law Blogs of 2011

November 10, 2011,

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Each year, LexisNexis honors a select group of blogs that set the online standard for a given industry. I'm honored that my blog is one of the nominated candidates for the Top 20 Tax Law Blogs of 2011, featured on the LexisNexis Tax law Community.

Each comment is counted as a vote toward my blog, so I invite your comments to support my nomination. To submit a comment, visitors need to log on to their free LexisNexis Communities account. If you haven't previously registered, you can do so for free by following this link.

Click here and you will be led to the announcement post on LexisNexis Tax Law Blog Nominees. The comment box is at the very bottom of the blog nomination page. You will only need to fill in your name and type in Tax Problem Attorney Blog with your comments in the comment box.The comment period for nominations ends on November 18, 2011.

Thank you for your support!

California Man Convicted of Tax Evasion Based in Part on a False Offer in Compromise (OIC)

November 10, 2011,

William H. Nurick, age 76, was convicted of tax evasion based on evidence he evaded a tax liability for one year of $157,000. In 2000 Nurick filed an amended 1995 income tax return admitting a $106,542 tax liability. He then attempted to conceal his offshore financial assets from the IRS by transferring $133,000 from an offshore bank account to a third party's offshore bank account, and then "borrowing" the funds back from the same party, and having that person file a trust deed against his real estate with the apparent purpose of making it appear that it had no equity. He then proceeded to file a false Form 433 with the IRS in support of an offer in compromise (OIC) which among other things failed to list his vehicle, or his offshore Costa Rican bank account with a balance of $200,000. 952313_gavel.jpg

The IRS financial statement also underreported his income. The case is interesting for several reasons. One there is a perception that the IRS does not prosecute seniors. It does. There is also a belief that if you file an accurate tax return that's the end of it. Not necessarily. There is a separate tax crime known as the evasion of payment. It too is a felony. Nurick faces up to 5 years in prison and a $250,000 fine.

Continue reading "California Man Convicted of Tax Evasion Based in Part on a False Offer in Compromise (OIC) " »