The streamlined foreign offshore procedures (SFOP) are part of the streamlined filing compliance procedures. Unlike the streamlined domestic offshore procedures, there is no 5% misc. offshore penalty assessed on a streamlined foreign offshore procedures filing. U.S. taxpayers eligible to use these procedures will file delinquent or amended returns, together with all required international information returns (Forms … Read more
IRC § 6038D, enacted on Mar. 18, 2010, and effective for taxable years beginning after the date of enactment, imposes reporting requirements with respect to certain “specified foreign financial assets”. The requirements are satisfied by an accurately filed Form 8938. Form 8938, Statement of Foreign Financial Assets, is required to be filed by specified individuals who … Read more
Individuals with foreign assets or interests may have one or more of the following reporting requirements: FinCEN Form 114, also known as FBAR Foreign Bank and Financial Accounts Reporting (FBAR). All US persons (which include US Citizens and resident aliens) who have a financial interest or signatory authority over foreign accounts which have an aggregate value of … Read more
Since the 2014 OVDP changes some taxpayers with unreported income from unreported foreign assets have filed under the Delinquent International Information Return Submission Procedures. Contents1 What are the Delinquent International Information Return Submission Procedures?1.1 Can I use this program if I also have unreported income from foreign assets?1.2 What are the requirements to file under … Read more
Contents1 Streamlined Domestic Offshore Procedures – Overview2 Eligibility for the streamlined domestic offshore procedures2.1 Non-willfulness3 Disqualification from the streamlined domestic offshore procedures4 Title 26 miscellaneous offshore penalty4.1 Determine the penalty base4.2 Financial interest: beneficial interest and legal interest4.3 Co-owners4.4 Are previously reported accounts included in the penalty base?4.5 Determine the penalty amount5 General treatment under … Read more
If you have undisclosed foreign accounts, perhaps the only thing worse than not coming forward voluntarily is submitting an incomplete disclosure. In United States v. Vinci, No. 8:19-cv-02441 (D. Md. 2019) the government alleges that the taxpayer willfully failed to file foreign bank account reports during his participation in the Offshore Voluntary Disclosure Program (OVDP). … Read more
From the DOJ press release. A federal grand jury returned a superseding indictment charging Brian Booker, a former resident of Fort Lauderdale, Florida, whose business specialized in international trade, with failing to file Reports of Foreign Bank and Financial Accounts (FBARs) and filing false documents with the Internal Revenue Service (IRS). According to the superseding … Read more
Just when it seemed that things couldn’t get any stranger in the world of foreign accounts compliance… In United States v. Bittner, No. 19-cv-00415 (ED TX) (case was found courtesy of Tax Notes), the government seeks to reduce to judgment an incredible $3 million of non-willful FBAR penalties. The unpaid tax on the amended returns for the relevant … Read more
The IRS has started sending letters to taxpayers with currency transactions and who potentially failed to report income and pay tax resulting from the virtual currency transaction or did not report their transactions property. The IRS began sending these letters last week and expects that more than 10,000 taxpayers will receive such letters. Contents1 Who’ll … Read more
In United States v. Horowitz, an OVDI/OVDP “opt out” case, the Taxpayer appeals a summary judgment decision involving FBAR willfulness penalties. Contents1 Facts2 Was summary judgment appropriate?3 Conclusion4 What should non-compliant taxpayers do? Facts Taxpayers are married U.S. citizens who lived and worked in Saudi Arabia for over fourteen years between 1984 and 2001. The … Read more
Can the IRS assess penalties against a deceased taxpayer for previously failing to file an FBAR? And who can the government collect the penalties from after the estate has been settled? In United States v. Park, No. 1:16-cv-10787 (N.D. Ill. 2019), the government brings suit against the deceased taxpayer’s children who are beneficiaries of taxpayer’s … Read more
In U.S. v. Kochav, case number 9:19-cv-80648, the Government seeks to reduce a $1.1 million willful FBAR civil penalty assessment to judgment. It’s helpful for clients to understand what types of fact patterns will elevate a failure to file FBARs to a willful one. Contents1 FBAR filing & willful penalty statute2 Case facts3 Conclusion4 What … Read more
From DOJ press release, excerpts below: Zurich Life Insurance Company Ltd (Zurich Life), headquartered in Zurich, Switzerland, and Zurich International Life Limited (Zurich International Life), headquartered in the Isle of Man (collectively Zurich) reached a resolution with the United States Department of Justice…As part of the agreement, Zurich will pay a penalty of $5,115,000 to … Read more
Can FBAR penalties be assessed on a per account basis? In the recent United States v. Boyd, the court answered that question when it found that non-willful FBAR penalties can be assessed on a per account basis. Contents1 FBAR Non-Willful Penalty Statute2 U.S. v. Boyd – Taxpayer’s Position3 U.S. v. Boyd – Government’s Position4 Court’s … Read more
Each year the IRS rolls out campaigns to identify the the top compliance issues for the year. For each of these campaigns, the IRS will deploy resources, training, and tools, metrics and feedback to enforce compliance in these areas. Here are three compliance campaigns released this week from the IRS. Contents1 Offshore Private Banking Campaign2 … Read more