Beyond The FBAR: Other Civil Penalties Lying In Wait For The Unwary Taxpayer With Undisclosed Offshore Assets
With all of the focus on FBAR penalties when it comes to foreign asset reporting, it’s easy to overlook the others, some of which can be just as onerous as the FBAR penalty itself. What other pestilent civil penalties are lying in wait for the unwary taxpayer who decides not to participate in one of the IRS’s […]
Man With Offshore Account Pleads Guilty To Hiding $ 1.1 Million From IRS
An 83-year-old Florida man pleaded guilty this week to hiding at least $1.1 million from the IRS in secret Swiss and Israeli bank accounts for over a quarter century. Bernard Kramer held the secret accounts from 1987 to about 2012. He used the code phrase “Hot Lips” when referring to them in conversations with Swiss bankers in Zurich […]
Does the IRS Have The Authority to Issue Whistleblower Awards For FBAR Penalties?
Does the IRS have the authority to issue Whistleblower awards under Section 7623(b) to an individual who provides information that results in the assertion of FBAR penalties? In Whistleblower 22231-12W v. Commissioner, T.C. Memo. 2014-157, the Tax Court came close to deciding this issue. The only reason it stopped short was because the jurisdictional pre-requisite […]
An Overview of the IRS’s Overhaul of OVDP And The Streamlined Procedures
On June 18, 2014, the IRS announced sweeping changes to both the Streamlined and the OVDP programs. The effects are generally as follows: Streamlined Program – Opening the Program Up 1. Expanded to include both U.S. citizens living abroad and U.S. citizens living in the United States; 2. Participants are not restricted to those who […]
Who Decides Whether To Authorize a Taxpayer’s Certification For Transitional Treatment To The Streamlined Procedures?
Earlier this week, I spoke to an IRS Revenue Agent who shed some light on how the decision regarding transitional treatment is made for those taxpayers seeking to transition to the Streamlined Procedures from OVDP. Under the current procedures, the agent and his or her manager make the decision regarding transitional treatment, with involvement as necessary […]
Reciprocal FATCA Reporting: Treasury Issues Proposed Rules To Enhance Financial Transparency
On July 30, 2014, the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”) proposed rules requiring U.S. financial institutions to collect “Customer Due Diligence” information. The purpose of these proposed rules is to prevent unscrupulous individuals from using anonymous companies to engage in or launder the proceeds of illegal activity in the U.S. financial sector. These […]
Common Pitfalls To Avoid When Calculating the FBAR Penalty
To fully understanding your legal duty with respect to disclosing a foreign account on an FBAR, it is first necessary to understand the instructions promulgated by the IRS to prepare an FBAR. A person must file an FBAR informational return if all of the following conditions are met: (1) a “U.S. person”; (2) had a […]
Can the Streamlined Compliance Procedures Be Used to Correct Defective Returns that Go Back Beyond the Most Recent Three Tax Years?
The issue that this blog seeks to address is whether a non-willful taxpayer with an undisclosed offshore account can use the streamlined compliance procedures to correct defective tax returns that go back beyond the most recent three tax years? In other words, are the streamlined procedures limited to the most recent three years of troublesome […]
How Do I Calculate My Offshore Penalty Under The Offshore Voluntary Disclosure Program?
Unlike FBAR penalties that can be asserted for multiple years (up to six under the six-year statute of limitations for FBARs), the offshore penalty is a one-time penalty. The values of foreign accounts and other foreign assets are aggregated for each year and the penalty is calculated at 27.5 percent of the highest year’s aggregate […]
How Do I Determine My Liability For FBAR Penalties Under the Penalty Mitigation Guidelines?
The IRS has authority to assert FBAR civil penalties. Contrary to popular belief, an FBAR violation doesn’t automatically mean that a penalty will be asserted. Examiners are expected to exercise discretion, taking into account the facts and circumstances of each case, in determining whether penalties should be asserted. For example, the examiner may determine that […]