Start or review an “Accountable Plan”

- By : Parag Patel

…not met, the reimbursement arrangement is treated as a non-Accountable Plan. In other words, the reimbursements are taxable compensation to the employee and subject to employment taxes. BUSINESS CONNECTION Before…

Form 8938, FATCA, FBAR and penalties for all (including bankers)

- By : Parag Patel

…cooperates with the IRS. A foreign banker may not realize that he has an American client because the client is represented by a non-American. The client may not provide the…

Asset Protection for Physicians

- By : Parag Patel

…to the Irish or Barbados company, which then pays the physician a small salary and drops the rest into a non-qualified deferred compensation account, known as a “Rabbi Trust”. While…

Do Inherited Foreign Assets Receive a Step-up in Cost Basis for U.S. Tax Purposes?

- By : Parag Patel

…owned by a non-U.S. person. Understanding the U.S. cost basis is important when assets are eventually sold as gains may be subject to U.S. taxation. There are a few nuances…

Denied access to or withdrew from the IRS Offshore Voluntary Disclosure Program (OVDP)?

- By : Parag Patel

…Voluntary Disclosure Program (OVDP) allows U.S. taxpayers to voluntarily resolve past non-compliance related to unreported offshore income and failure to file foreign information returns. This campaign addresses OVDP applicants who…

IRS Summons to a Third Party: Duties and Rights

- By : Parag Patel

…summonsed witness may also request to have a non-attorney witness present at the production of documents and records, but he or she must first sign a non-disclosure waiver. Moreover, anyone…

Estate Planning in a Recession

- By : Parag Patel

…your beneficiaries tax-free. Charitable Lead Annuity Trust (”CLAT”) CLATs benefit both charities and private, non-charitable beneficiaries because the trust pays an annuity to the designated charity for a specified term…

Introduction to Estate Planning

- By : Parag Patel

…a will. The savings must be counter-balanced by the administrative burden of maintaining the assets in the trust over the period of one’s life. There are other, non-economic advantages for…

2020 New “Universal” Deduction for Charitable Contributions

- By : Parag Patel

…a ‘universal’ provision that allows you to deduct non-itemized, above-the-line charitable contributions. It is universal because it can be taken by all tax filers, regardless of itemized or standard deduction….

Opting-out or Opting-in of OVDI

- By : Parag Patel

The IRS last week explained fully the possibility of opting-out of the OVDI and taxpayers’ taking their chances with an IRS examination, particularly where the non-disclosure of assets or income…

IRS Collects $10 Billion From Voluntary Disclosures of Foreign Assets

- By : Parag Patel

…expect aggressive enforcement of US tax laws against noncompliant taxpayers with foreign assets and income. Individuals with possible noncompliance should immediately speak with an experienced competent tax attorney for advice….

More Swiss Banks Agree to Cooperate with the IRS

- By : Parag Patel

…second category have reason to believe they may have committed tax offences, and are eligible for a non-prosecution agreement if they come clean and face fines. So-called category 3 banks…

Swiss Bank Disclosure Round Up

- By : Parag Patel

…may have committed tax offenses, and are eligible for a non-prosecution agreement if they come clean and face fines. Banks which have said they will do so include: EFG International…

Life insurance for disabled or special needs children

- By : Parag Patel

…will be the beneficiaries, and the secondary beneficiaries would be the surviving siblings of the disabled child. If there are no siblings, family or perhaps a charity or non-profit organization…

New IRS internal procedure guidance for Streamline Filing Compliance Procedures

- By : Parag Patel

non-willfulness. Do not disclose too much and beware of badges (evidence) of willfulness, blind willfulness, concealment, etc. For more information see new IRM published. It is very likely that the…

Welcome news from IRS for late Form 3520 penalties

- By : Parag Patel

…IRS Large Business & International Division announced the rollout of an F3520/3520-A Non-Compliance and Campus Assessed Penalties campaign (see www.irs.gov) to “address noncompliance through a variety of treatment streams including . . ….

Another foreign bank customer found guilty of foreign income under-reporting and FBAR violations.

- By : Parag Patel

…and paid all amounts due, together with interest and penalties (a common strategy known as a quiet disclosure, which failed in this case). However, federal tax law criminalizes the willful

Explore the OVDI opt-out option: Argue for Penalty Mitigation

- By : Parag Patel

…program penalty. We expect some successful results for some of our clients. Under IRM 4.26.16.4.5.3 (FBAR Willfulness Penalty – Willfulness) (07-01-2008) the test for willfulness is whether there was a…

The “Quiet” or “Silent” Disclosure

- By : Parag Patel

…Sometimes filing a false return is worse that filing no return at all. Some possible criminal charges include tax evasion and filing a false return. Willfully failing to file an…

2012 Offshore Account Criminal Tax Cases

- By : Parag Patel

…Michael Reiss, 11-CR-00668 (S.D.N.Y.): On January 11, 2012, Reiss was sentenced to one day of imprisonment for one count of willful failure to file reports of foreign bank and financial…

Top 5 tax fraud recoveries in 2022

- By : Parag Patel

…exchange. Investigators traced the stolen funds through the BTC blockchain and successfully decrypted files obtained through a search warrant. Willful failure to file individual income tax returns: $29.5 million, plus…

New Unreported Offshore Assets case: Bad facts leads to bad results

- By : Parag Patel

…6 months. Although the 50% penalty is high, willful civil violations can result in tax, penalties and interest totaling 325% of the highest balance in the account for the most…

FBAR Deadline Slightly Extended

- By : Parag Patel

…required by law to file an FBAR. Failure to timely file an FBAR can result in civil penalties and, in willful cases, criminal prosecution. So be sure to file your…

Reasons to Opt Out of the 2011 OVDI Program

- By : Parag Patel

…2012) noting that $1,255,567 in willful and nonwillful penalties plus $1,671,518 in negligence penalties were assessed against taxpayers who opted out of the 2009 OVDP in 186 closed cases. Moreover,…

Specific Steps for Applying to the IRS Streamlined Foreign Offshore Procedures

- By : Parag Patel

…returns, report all income, pay all tax, and submit all required information returns, including FBARs, was not the result of willful conduct. Copies of this certification must be attached to…

IRS’ Takes Legal Action Against Offshore HSBC Indian Accounts

- By : Parag Patel

…report foreign financial accounts if the total value of the accounts exceeds $10,000 at any time during the calendar year. A willful failure to report a foreign account can result…

IRS offers tax opportunity to Americans living abroad

- By : Parag Patel

…rules on tax returns and disclosure of foreign bank accounts. They said many of these people were not willful tax evaders, but simply uninformed about filing returns and, if needed,…

Cost of Compliance Rises under OVDP

- By : Parag Patel

…amnesty even for willful acts. But for those with the right facts, the IRS Streamlined program is simpler and less costly. US taxpayers considering an OVDP disclosure need to take…

The New IRS ERC Voluntary Disclosure Program

- By : Parag Patel

…not acquired information directly related to the noncompliance from an enforcement action. What To Do Now It is essential for employers who have submitted ERC claims to know if they…

Beware: India to sign FATCA agreement with US for sharing of information

- By : Parag Patel

…U.S. law which seeks to facilitate flow of financial information. FATCA requires Indian banks to reveal account information of persons connected to the U.S. Non-compliant financial institutions could be frozen…