United States v. Paul Manafort and Robert Gates: An Offshore Tax Evasion Case
On October 27, 2017, the Government filed criminal charges against former Trump aides, Paul J. Manafort and Richard W. Gates, III. While these are only allegations and all defendants should be considered innocent until otherwise proven, the case provides some important lessons in offshore compliance cases. I expect that many with undisclosed offshore assets will be unnerved by this case, but hopefully by understanding the particular facts in this case, such individuals won’t jump to conclusions about the best way to proceed in their situation.
There are a number of federal charges in the case, so I will try to discuss only the facts as they relate to offshore tax non-compliance.
IRS Audits of Streamlined Applications
A question that’s asked by every client in a streamlined compliance filing is: “will I get audited?” This article will hopefully shed some light.
Here’s what the IRS says:
Returns submitted under either the Streamlined Foreign Offshore Procedures or the Streamlined Domestic Offshore Procedures will not be subject to IRS audit automatically, but they may be selected for audit under the existing audit selection processes applicable to any U. S. tax return and may also be subject to verification procedures in that the accuracy and completeness of submissions may be checked against information received from banks, financial advisors, and other sources.
Foreign Life Insurance Taxation
Life insurance can be good way to ensure that loved ones are taken care of in the event of an unfortunate situation. However, owning a foreign life insurance policy with cash value can prove to be more of a headache than it’s worth. We’ve come across such types of investments regularly in our offshore compliance cases; the reporting and tax obligations can be burdensome. Hopefully, this article will help foreign insurance policy owners understand their U.S. tax obligations.
Willfulness vs. Non-willfulness: Offshore Compliance Cases Involving Immigrants
Nearly on a daily basis I get a call or email from a potential client with this almost exact same scenario:
Client from Country A moves to the U.S. and leaves behind some accounts and assets in Country A. Client finds out about FBAR filing requirements and learns that foreign income must be reported on the U.S. return.