It wouldn’t surprise me if the IRS were preparing to file a lawsuit against Credit Suisse similar to the one filed against UBS in the hopes of getting the names of U.S. citizens suspected of tax evasion and failure to file FBARs. If the German tax prosecutors have evidence of tax fraud committed by Credit Suisse bankers, this would add fodder to any lawsuit by the IRS.
As I keep explaining to clients with offshore bank accounts, the FBAR problem is not going away, and it’s a mistake to think that the IRS investigation of offshore financial is limited to UBS, or even Switzerland.
If you would like a consultation regarding how to handle your unreported offshore bank account, or any other tax problem contact the tax litigation lawyers at Brager Tax Law Group.
At least two American clients of HSBC, which is based in London, are aiding federal prosecutors by turning over account details, names of bankers and internal memorandums and other confidential documents regarding HSBC’s offshore private bank, according to one person briefed on the matter.
If the UBS criminal tax prosecution is any guide, this means that over the course of the coming months HSBC will be handing over its clients’ names and account records to the IRS ; at which point they will face the prospect of tax evasion charges, and stiff civil penalties which can range to more than 50% of the balance in the offshore bank accounts.
Clients who have foreign bank accounts at HSBC may still be able to avoid criminal tax evasion charges by taking advantage of the IRS voluntary disclosure policy, and coming forward, but it is clear that time is running out.
If you would like to consult with an experienced tax litigation attorney regarding FBARs, voluntary disclosure, or other tax problems contact the tax lawyers at Brager Tax Law Group, A P.C.
Just in case you read that too quickly let me repeat. Over a six year period Zaltsberg, age 76, failed to report $60,000; that’s $10,000 per year! Granted it’s not pocket change, but we’re hardly talking about a big-time tax evader. According to his daughter as reported by David Voreacos, in Bloomberg News Zaltsberg has bladder and prostate cancer.
This case is a stark reminder to tax lawyers, and CPAs that they can not assume that because the amount of unreported tax is relative small their clients do not have criminal tax exposure. Clients need to be informed of the risks, and the way those risks can be minimized through a voluntary disclosure.
If you have a Swiss bank account, a Hong Kong bank account, or a foreign bank account in any country, and would like to discuss your options, contact the tax litigation lawyers at Brager Tax Law Group, A P.C.
So for example, John opens an account in Israel for his father, Sam, who lives in Iraq. John is a U.S. citizen. Sam has never even been to the U.S. for a visit. The funds in the offshore account belong to Sam, but because the Israeli bank wouldn’t open up an account in Sam’s name unless he comes to Israel, John opens it in his own name, and puts Sam’s funds in the offshore bank account.
The assumption that John falls under IRS Notice 2010-23 is incorrect. John has a financial interest in the account. The definition of financial interest is set forth in the instructions to the FBAR, Form TDF 90-22.1 which states:
A United States person has a financial interest in each account
for which such person is the owner of record or has legal title,
whether the account is maintained for his or her own benefit or
for the benefit of others including non–United States persons. It’s
clear that John must file an FBAR on June 30, 2010 since he
holds legal title.
If you have an offshore bank account contact the tax litigation attorneys at Brager Tax Law Group, A P.C. to discuss your options.
For owners of UBS Swiss bank accounts this may be the last chance to make a voluntary disclosure to the IRS, thereby greatly reducing the chances of criminal tax evasion, tax fraud, and willful non-filing of FBARs charges being filed. Making a voluntary disclosure at this point after the tax amnesty deadline has passed will not by itself eliminate harsh civil tax penalties, but is one step in the right direction.
Once the IRS has received an individual’s name from UBS it will be too late to make a voluntary disclosure, and a criminal tax investigation is almost a sure thing.
If you have a foreign bank account at UBS, a Swiss bank account anywhere else, or a foreign bank account anywhere in the world, and would like to learn more about your options contact the tax lawyers at Brager Tax Law Group, A P.C.
• A report by a disgruntled ex-employee of UBS led to the indictment of Bradley Birkenfeld a former UBS Swiss banker. Revelations by Birkenfeld led in turn to the indictment of UBS which paid 750 million dollars to the IRS to settle the criminal case. UBS turned over the names of 250 holders of offshore bank accounts.
• 150 of these UBS Swiss bank account owners are under active investigation by the IRS Criminal Investigation Division (CI), and the tax attorneys at the Department of Justice
• Approximately 10 individuals (including some at banks other than UBS) have already pled guilty to various charges including the filing of false documents, failure to file an FBAR, and tax fraud
• The IRS filed a John Doe summons demanding from UBS the names of all its clients who were U.S. citizens or residents
• In high level diplomatic negotiations the case was settled with UBS agreeing to turnover the names of approximately 4,450 UBS Swiss bank account owners.
• A decision by a Swiss Court earlier this year ruled that certain accounts could not be turned over under Swiss law despite the agreement with the IRS
• On June 3rd the upper house of the Swiss Parliament ratified a Treaty amendment which would overturn the Swiss Court decision
Although the Swiss lower house refused to ratify the Treaty amendment things are not over yet. The Swiss lawmakers are expected to go back to the bargaining table to see if the issue can be resolved. Further developments are expected by June 18th—the end of the Swiss parliamentary session.
If you have an offshore financial account, whether it is a Swiss bank account, or an offshore account in another country call the tax litigation lawyers at Brager Tax Law Group, a P.C. to find out about your options.
The part that was surprising was that she stated the government would issue a grand jury subpoena even to a Kovel accountant, i.e. one that was retained by a tax attorney for the purpose of assisting the tax attorney in advising the client.
In an ominous note Johnson stated , “Whether or not that accountant comes to testify can be very serious for the accountant. The grand jury may decide he is part of the problem.”
If you have a tax problem, or are a CPA who has a client with a tax problem feel free to contact the tax lawyers at Brager Tax Law Group, A P.C. for a consultation.
According to Reuters, Downing made the announcement in a lecture in Singapore last week. Along with a DOJ team, he is currently touring a number of Asian cities including Singapore, Hong Kong, Beijing and Shanghai, meeting with financial and tax regulatory bodies and bankers to discuss cross-border criminal tax prosecutions.
He stated that since the start of the U.S. crackdown on tax evasion, money has moved from Switzerland to the Caribbean and Asia. In addition, some clients with offshore financial accounts are choosing to take cash from Swiss Bank accounts and carry it by hand back to the United States, in an attempt to avoid an electronic trail, only to be caught by U.S. law enforcement officers . Of course if your bring back more than $10,000 in cash into the U.S. it must be declared on Treasury Form 4790. Civil and criminal tax penalties for failure to make the declaration can run to $500,000 not to mention imprisonment for ten years.
“When they go in and close their accounts, they are picking up brand new $100 bills…that are coming in $100,000 shrink-wrapped bundles. Guess what? We can trace that money,” Downing said, adding such cash would be forfeited.
According to published reports, German and French authorities are getting in on the action as well. Germany is offering to pay for data from whistleblowers on clients of Swiss banks who may be committing tax fraud. France has said it has sensitive data belonging to potential tax evaders as well. While Downing declined to say whether the Justice Department was investigating any other foreign banks, U.S. tax attorneys are sure it’s only a matter of time before banks in other countries come under the type of scrutiny exercised in the UBS FBAR cases.
If you would like information about your options regarding disclosing a foreign bank account, contact the tax controversy lawyers at Brager Tax Law Group, A P.C.
• 225 revenue agents have been assigned to conduct civil tax audits in voluntary disclosure of offshore bank account cases
• IDRs (Information Document Requests) can be expected in most offshore bank account cases within the next few weeks
• The goal of IRS management is to close a “substantial portion” of the tax audits by the end of 2010
• IRS has started to identify taxpayers who made quiet voluntary disclosures of their offshore bank accounts, and these cases will be worked as “full blown” civil tax audits—meaning these taxpayers are potentially subject to multiple 50% FBAR penalties
• It is too soon to tell how post Oct. 15th voluntary disclosures will be treated for civil tax purposes—speculation continues to center on 25 to 35 per cent
• IRS has rolled out a “third generation” IDR which the IRS believes is more streamlined
• Basis issues will be negotiable, i.e. if basis information is unavailable revenue agents will likely accept reasonable alternatives, e.g. value security as of 1/1/2003
• Even if a timely 2008 FBAR was filed, if the highest offshore bank account value was in 2008, the 20% penalty will be calculated based upon 2008 value
• Revenue Agents do not “currently” have the authority to waive de minimus violations – there is no such thing as being half pregnant.
If you have a foreign financial account call the tax litigation lawyers at Brager Tax Law Group, A P.C. to get more information on voluntary disclosures and FBARs.
]]>This illustrates a vital point that as a tax controversy lawyer I remind clients about all the time. In a criminal tax case many times the first witness is the client’s tax preparer. There is no accountant client privilege in a criminal tax fraud case! Had these communications been between Heller and his tax attorney it is likely that the attorney-client privilege would have shielded them from IRS . While the IRS might have been able to bring a tax evasion case without the tax preparer the statements by the tax preparer will no doubt be extremely damaging.
If you have a tax problem including unreported offshore financial accounts contact the tax controversy lawyers at Brager Tax Law Group, A P.C.
The difference is, these two were not clients of UBS, but instead had offshore financial accounts with HSBC, Europe's largest bank, according to a source with knowledge of the case. This could signal the shift that many tax attorneys have suspected was coming. Up until now all the FBAR indictments had been of UBS clients, but there are U.S. citizens with unreported offshore accounts all over the world. I fully expect the IRS to go after other Swiss banks, and then expand to other countries. The IRS is currently sifting through all of the information they received as part of last year’s tax amnesty program for offshore account holders, looking for patterns that implicate other offshore banks and financial institutions. It's only a matter of time before there are more tax evasion prosecutions of offshore bank account owners at a variety of financial institutions.
If you would like information about whether or not making a voluntary disclosure of your offshore bank account is a wise choice, contact the tax attorneys at Brager Tax Law Group, A P.C.
The defendants are variously charged with conspiracy, tax fraud, criminal tax offenses, and/or willful failure to file a Foreign Bank Account Report, Form TDF 90-22.1 (FBAR). Those defendants charged with willful failure to file FBARs may be subject to a civil penalty of up to 50 percent of the value of the accounts for each year the accounts were not disclosed.
Two defendants, Jules Robbins and Federico Hernandez, pleaded guilty to separate criminal charges and agreed to pay civil penalties of $20.8 million and $4.4 million, respectively.
Two additional defendants surrendered on the 15th, one is expected to surrender on the 19th, and two others remain at large.
It’s apparent the IRS purposely chose today to announce these new indictments. IRS Criminal Investigation Chief Victor S.O. Song stated, “Today is the deadline to file a U.S. tax return, and those Americans who file accurate, honest and timely returns can be assured that the government will hold accountable those who don’t. For those still hiding in this shadowy world of secret offshore accounts, it is time to come in and get right with your government or face stiff criminal and financial penalties.”
If you’d like information about making a voluntary disclosure of your offshore bank accounts, contact the tax lawyers at Brager Tax Law Group, A P.C.
Abrahamsen faces as long as five years in prison when he returns to court for sentencing on July 27th, along with a fine of $250,000. He also agreed to pay taxes and interest, as well as a 50 percent FBAR civil penalty on the highest balance of his accounts. It is not clear whether he will also have to pay a 75% civil tax fraud penalty. Based upon the amounts disclosed in public documents the taxes and penalties will probably exceed 100% of the amount in his Swiss bank account.
UBS turned over data to the U.S. on Abrahamsen as part of its deferred-prosecution agreement. Had Abrahamsen made a voluntary disclosure to the IRS, it is possible he could have avoided his criminal tax problems.
If you have a Swiss bank account or other foreign financial account call the tax litigation lawyers at Brager Tax Law Group, A PC for a consultation.
The worker performed services at the payor’s place of business as well as her own home
The payer provided all office supplies including telephone, fax machine etc., although the worker provided her own computer, and accounting software.
The bookkeeper was paid hourly
The worker did not receive any benefits
The worker provided services for a period of about 2 years.
The payer’s had obtained a state ruling that the worker was an independent contractor.
The payer and the worker had an oral agreement whereby the worker agreed to independent contractor status
The worker was trained by the payer on some of its proprietary software.
The worker did not hold herself out as being in an independent business.
As a tax attorney who has been through many payroll tax audits I know it can be difficult to prove that a worker is an independent contractor to the satisfaction of the Internal Revenue Service or the California Employment Development Department (EDD).
Nevertheless payers who are subject to a payroll tax audit have a variety of defenses including the so-called safe harbor provisions of Section 530 of the Revenue Act of 1978. This underused provision of the law allows for workers who fail the 20 factor common law test be treated as independent contractors provided the following requirements are met:
1. For federal employment tax purposes the payer never treated the
individual as an employee for any period, nor did it ever treat workers holding
substantially similar positions as employees;
2. All federal tax returns (including Form 1099) are filed on a basis
consistent with the taxpayer's treatment of the individual as not being an
employee; and
3. A reasonable basis existed for classifying the individual as an independent
contractor. Reasonable basis includes:
a. Reliance on judicial precedent or revenue ruling;
b. Previous IRS tax audit;
c. Long-standing recognized practice of a significant segment of the
industry; or
d. Any other reasonable basis.
If your company is contacted by the EDD or the IRS for a payroll tax audit or any other tax problem call the former IRS tax attorneys at Brager Tax Law Group, A PC.
In a separate announcement on Monday, April 5th, IRS Commissioner Doug Shulman said the IRS is still sifting through 15,000 records on foreign bank accounts that it received from individuals who took part in the IRS tax amnesty program. The IRS is looking for patterns in the records to identify other offshore banks and advisors that helped individuals hide funds in foreign financial accounts, and may have committed tax fraud. That area will be “the next wave” of the investigation, according to Shulman. Some tax attorneys have speculated that HSBC and Credit Suisse are the next ones on the IRS hit list.
Although the IRS tax amnesty program for unreported offshore income ended in October, it is not too late to make a voluntary disclosure of your offshore bank accounts, and possibly avoid criminal tax fraud charges. For more information contact the tax attorneys at Brager Tax Law Group, A P.C.