2018 Egyptian Tax Amnesty | International Tax Lawyer & Attorney

Egyptian Law 174 of 2018 announced the 2018 Egyptian Tax Amnesty program that commenced on August 15, 2018. Egypt is no stranger to tax amnesties; in fact, the very first documented tax amnesty program in the world is believed to be the one announced by Ptolemy V Epiphanes in 197 B.C.

The 2018 Egyptian Tax Amnesty program is a continuation of the worldwide trend to fight tax noncompliance with amnesty programs. If they are structured well (such as the US OVDP) and combined with effective tax administration, these amnesty programs can be highly effective, generating large revenue streams for national governments. There are, however, numerous examples of failed amnesty programs (like the ones in Pakistan) due to either poor structuring or other factors. Let’s acquaint ourselves with the 2018 Egyptian Tax Amnesty program.

2018 Egyptian Tax Amnesty: Term

The 2018 Egyptian Tax Amnesty program will last a total 180 days starting August 15, 2018.

2018 Egyptian Tax Amnesty: Taxes and Penalties Covered

The 2018 Egyptian Tax Amnesty program will cover stamp duty, personal income tax, corporate income tax, general sales tax, and VAT liabilities that matured before August 15, 2018.

The interest and penalties on the outstanding tax liabilities related to the listed taxes will be reduced according to a fairly rigid schedule which benefits most taxpayers who go through the program within 90 days after the Program opens on August 15, 2018. These taxpayers can expect a whopping 90% reduction in penalties and interest!

If a taxpayer misses the 90-day deadline, but settles his outstanding tax debts within 45 days after the deadline, he will be entitled to a waiver of 70% of the tax debt and interest.

If a taxpayer misses both, the 90-day deadline and the 45-day deadline, but settles his outstanding tax debts within 45 days after the 70%-waiver deadline (i.e. 135 days after August 15, 2018), he can still benefit from a 50% reduction in tax penalties and interest.

US Tax Amnesty & 2018 Egyptian Tax Amnesty

US taxpayers who participate in the Egyptian Tax Amnesty should also consider pursuing a voluntary disclosure option in the United States with respect to their unreported Egyptian income and Egyptian assets. There is a risk that the information disclosed in the Egyptian Tax Amnesty may be turned over to the IRS, which may lead to an IRS investigation of undisclosed Egyptian assets and income for US tax purposes.

While the IRS Offshore Voluntary Disclosure Program closes on September 28, 2018, there is still a little time left to utilize this option. Additionally, US taxpayers should consider other relevant voluntary disclosure options, such as Streamlined Offshore Compliance Procedures.

Contact Sherayzen Law Office for Professional Help With Offshore Voluntary Disclosure of Egyptian Assets in the United States

If you have undisclosed Egyptian assets and/or Egyptian income, you should contact Sherayzen Law Office for professional help. We have helped hundreds of US taxpayers around the world to successfully settle their US tax noncompliance, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

FATCA Criminal Case Filed Against Foreigners | FATCA Lawyer & Attorney

On March 22, 2018, the US Department of Justice (“DOJ”) announced that it charged four foreign residents – Panayiotis Kyriacou (resides in London, UK), Arvinsingh Canaye (resides in Mauritius), Adrian Baron (resides in Budapest, Hungary), and Linda Bullock (resides in St. Vincent/Grenadines) – with conspiracy to defraud the United States by failing to comply with FATCA. Let’s explore this new FATCA criminal case in more detail.

Legal Basis for FATCA Criminal Case

The legal basis for this FATCA criminal case is the allegation that the defendants conspired to defraud the United States by obstructing the IRS administration of the Foreign Account Tax Compliance Act (“FATCA”).

FATCA was passed into law in 2010. One part of this highly complex law requires foreign financial institutions (“FFIs”) to identify their US customers, collect the information about foreign accounts held by these US customers as required by FATCA (“FATCA Information”) and send FATCA Information to the United States. The DOJ alleges that the defendants in this case intentionally conspired to obstruct the collection and reporting of FATCA Information to the IRS.

Facts of the FATCA Criminal Case As Alleged by the DOJ

The indictment alleges that the defendants agreed to defraud the United States by opening foreign bank and brokerage accounts without collecting FATCA information that should have been reported to the IRS. The indictment describes two specific schemes, both of which were uncovered by the DOJ through an undercover agent.

The first scheme is called the Beaufort Scheme, because Canaye and Kyriacou both worked at Beaufort Management as a general manager and an investment manager respectively. The indictment alleges that, between August 2016 and February 2018, these two defendants conspired to defraud the United States by failing to comply with FATCA. The DOJ states that it obtained the proof of the existence of this conspiracy through an undercover agent (the “Agent”).

The Agent first approached Kyriacou in 2016, who opened bank accounts for the agent without doing any FATCA compliance. In July 2017, Kyriacou introduced the Agent to Canaye and advised that Canaye could assist with the Agent’s stock manipulation scheme schemes. In January 2018, Canaye and Beaufort Management opened six global business corporations for the Agent. The Agent’s name did not appear on any of the account opening documents.

The second scheme is called the Loyal Scheme because it involved Baron, the Loyal Bank’s Chief Business Officer. During their meetings, the Agent explained to Baron that he was a US citizen and described his stock manipulation schemes, including the need to bypass FATCA. In July and August of 2017, the Undercover Agent met with Baron and Bullock, Loyal Bank’s Chief Executive Officer. During the meeting, the Undercover Agent described how his stock manipulation deals operated, including the necessity to bypass FATCA. In July and August 2017, Loyal Bank opened multiple bank accounts for the Agent. At no time did Loyal Bank request or collect FATCA Information from the Undercover Agent.

It should be remembered that the charges in the superseding indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

This FATCA Criminal Case Reflects IRS Commitment to FATCA Enforcement

While not the first FATCA criminal case, the present case is definitely at the beginning of the future series of FATCA cases against US taxpayers and foreigners. The IRS stressed that this FATCA criminal case reflects the commitment of the IRS and the DOJ to combat offshore tax evasion and enforce FATCA worldwide.

Sherayzen Law Office will continue to monitor IRS enforcement of FATCA, including this FATCA criminal case.

IRS Compliance Campaigns | US International Tax Attorney and Lawyer

On January 31, 2017, the IRS announced a complete new approach to tax enforcement – Issue-Focused IRS Compliance Campaigns. A total of thirteen IRS compliance campaigns were announced; all of them will be administered by the LB&I (Large Business and International) division of the IRS. Let’s explore in more detail this highly important IRS announcement.

Background Information: IRS Compliance Campaigns is the Second Phase of the LB&I Restructuring

The announcement of the IRS Compliance Campaigns does not come as a surprise. The IRS has been talking about the LB&I division restructuring for a long while and the first details of the new campaigns already appeared as early as September of 2015.

In fact, the IRS Compliance Campaigns represent the second phase of this restructuring. Already in the fall of 2015, the LB&I completed the first phase – the administrative re-organization of the LB&I into nine units, including four geographic practice areas and five issue-based practice areas.

The first phase of the LB&I reorganization focused on the administrative structure of the Division. The IRS Compliance Campaigns are meant to reorganize the Division’s tax enforcement process in a way that fits best the new administrative structure.

IRS Compliance Campaigns are Focused on Specific Tax Issues

On January 31, 2017, during a conference call announcing the new IRS Compliance Campaigns, the IRS stated that each campaign is meant to provide “a holistic response to an item of either known or potential compliance risks.” In other words, each Campaign is focused on a specific tax issue which carries a heightened noncompliance risk.

This focus on specific issues fits perfectly with the new organizational structure of the LB&I which we already discussed above. Again, this is all part of a large IRS plan to devote its scarce resources towards the areas which have significant noncompliance risk and, hence, require a more intense level of IRS scrutiny.

Issue-Focused IRS Compliance Campaigns: What Areas Will the Campaigns Affect?

As of March 21, 2017, the IRS identified thirteen such high-risk areas. A separate campaign was assigned to each of these areas. The campaigns can be grouped according to the IRS LB&I Practice Areas.

1. Cross Border Activities Practice Area

The following campaigns are included within the Cross Border Activities Practice Area of the LB&I Division: Form 1120-F Non-Filer Campaign and Repatriation Campaign.

2. Enterprise Activity Practice Area

The Enterprise Activity Practice Area of the LB&I Division contains more campaigns than any other area by a large margin. Seven different campaigns are launched within this Practice Area: IRC 48C Energy Credit; Domestic Production Activities Deduction, Multi-Channel Video Program Distributors (MVPD’s) and TV Broadcasters; Micro-Captive Insurance Campaign; Related Party Transactions; Deferred Variable Annuity Reserves & Life Insurance Reserves IIR Campaign; Basket Transactions Campaign; and Land Developers – Completed Contract Method (CCM) Campaign.

3. Pass-Through Entities Area

Two huge campaigns are launched in the Pass-Through Entities Area of the LB&I Division: TEFRA Linkage Plan Strategy Campaign and S Corporation Losses Claimed in Excess of Basis Campaign.

4. Treaty and Transfer Pricing Operations Practice Area

One campaign is launched within the Treaty and Transfer Pricing Operations Practice Area: the Inbound Distributor Campaign.

5. Withholding and International Individual Compliance Practice Area

Only one, but highly important campaign was launched within the Withholding and International Individual Compliance Practice Area – OVDP Declines-Withdrawals Campaign.

The taxpayers should remember that they may be subject to multiple IRS Compliance Campaigns at the same time.

IRS Compliance Campaigns: Treatment Streams

The goal of the campaigns is to promote tax compliance – even more fundamentally, to change the taxpayer behavior in general, replacing noncompliance with compliance.

In order to achieve this goal, the IRS may utilize a variety of “treatment streams” as part of a campaign. The first and most fundamental treatment stream is the traditional audit, which will remain the ultimate weapon in all IRS Compliance Campaigns.

Second, the IRS stated that it will also include “soft letters” to taxpayers. The idea behind the soft letters is to draw a taxpayer’s attention to a particular item or issue on the taxpayer’s return, explain the IRS position and give the taxpayer an opportunity to amend his return himself (i.e. without resorting to an audit). If the taxpayer does not do so after he receives the IRS letter, an audit will most likely follow.

Additionally, the IRS stated that it will pursue four additional strategies: guidance, new forms and instructions, published practice units, and practitioner and stakeholder outreach.

More IRS Compliance Campaigns Will Be Launched in the Future

The IRS has affirmatively stated that the number of the IRS Compliance Campaigns will increase in the future. At this point, it is not yet known what particular areas the new Campaigns will affect.

Contact Sherayzen Law Office for Professional Help If You Are Affected by One or More of the IRS Compliance Campaigns

If you are affected by any of the IRS campaigns or you have received a soft letter from the IRS, contact Sherayzen Law Office for professional help. Our team of tax professionals, headed by Attorney Eugene Sherayzen, will thoroughly analyze your case, create a plan to move forward to resolve the situation, implement the plan and defend your position against the IRS.

Poland AEOI Rules Still Not Implemented | FATCA Lawyers

On September 29, 2016, the European Commission announced that it had asked Poland to fully implement into its domestic law Council Directive 2014/107/EU on mutual assistance in income and capital taxation matters (which amends the earlier Directive 2011/16/EU on mandatory automatic exchange of information between member states). The request came in after the realization that Poland AEOI Rules were still not implemented despite the deadline.

Poland AEOI Rules Implementation, CRS and Council Directive 2014/107/EU

After the United States adopted Foreign Account Tax Compliance Act (FATCA) into law, the OECD (including the European Union) created the Common Reporting Standard (CRS) which established the standard for what type of information needs to be automatically exchanged between signatory countries. AEOI is essentially the practical application of the CRS.

In December 2014, the EU Council adopted Directive 2014/107/EU, which extended cooperation between tax authorities to automatic exchange of financial account information (i.e. AEOI) and expanded the scope of information to be exchanged on an automatic basis to include interest, dividends, and other types of income. Virtually all countries, except Poland and Portugal, have implemented the directive on AEOI

The Delays in Poland AEOI Rules Implementation

In reality, Poland, like other member states, were requires to implement the directive into their national laws by January 1. According to Tax Analysts, the European Commission already sent a formal notice to Poland on January 27, 2016. Then, it send another formal notice in March of 2016. At that time, Poland replied that the government was working on transposing Directive 2014/107/EU into national law.

However, Poland AEOI Rules still have not been implemented. What is worse, it appears that the Polish government has taken no concrete steps into that direction. Poland also has yet to fully inform the Commission of its plans to meet that requirement.

What Happens if Poland AEOI Rules Implementation Stalls

While the latest Commission action comes at a difficult time in Poland (on September 28, 2016, Polish Prime Minister Beata Szydlo sacked Finance Minister Pawel Szalamacha), it may not save Poland from later EU actions. If Poland does not respond in a satisfactory manner within the next two months, the Commission may refer Poland to the Court of Justice of the European Union.

Boston FATCA Lawyer

Often, people are searching for a Boston FATCA lawyer without a clear definition of who a Boston FATCA lawyer is. Indeed, who is a Boston FATCA Lawyer? Just a lawyer who resides in Boston or can a lawyer who resides outside of Boston qualify as a Boston FATCA lawyer? Is it any lawyer or only an international tax lawyer? Do all international tax lawyers qualify as a Boston FATCA lawyer?

Boston FATCA Lawyer Definition: Physical Residence Does Not Matter

Let’s first resolve the issue of physical residence. Here, we find that there are two types of lawyers who can qualify as a Boston FATCA Lawyer. First, a lawyer who resides and works in the city of Boston; this is logical and does not need further explanation.

Second, a Boston FATCA lawyer can also be a lawyer who resides outside of Boston, but who has clients in Boston. There are two reasons for this statement. First, the enormous improvements in modern communication technologies eliminated for all practical purposes the difference between a Boston FATCA lawyer who resides in Boston and a Boston FATCA lawyer who resides outside of Boston. The logistical ability of lawyers who reside outside of Boston to advise (with respect to FATCA) and prepare documents for their clients who live in Boston is virtually the same.

The second reason for why a lawyer who resides outside of Boston can still be considered as a Boston FATCA lawyer is the fact that FATCA is a federal law that concerns US international tax compliance; there is no special relationship between Boston and FATCA.  FATCA applies to all US taxpayers equally, not just US taxpayers who reside in Boston.  The logical extension of this statement is that the lawyers who practice in this area of law are able to provide their services with respect to FATCA irrespective of their residence.  This means that a lawyer in Boston has no inherent advantage over a lawyer who resides outside of Boston, because there is simply no local legal Bostonian addition to FATCA.

Boston FATCA Lawyer Definition: a FATCA Lawyer is an International Tax Lawyer

Not every lawyer qualifies as a Boston FATCA lawyer; in fact, very few lawyers qualify for this title because this is a very narrow specialty. A Boston FATCA lawyer is an international tax lawyer who is knowledgeable about FATCA, foreign accounts voluntary disclosure and the US international tax system in general.

The knowledge of US international tax requirements is highly important for a FATCA Lawyer. Many clients do not initially understand that FATCA is merely a part of a much larger network of international tax laws of the United States. The interaction of these laws with FATCA is what has an actual impact on the tax position of a US taxpayer. This is why it is highly important for a FATCA Lawyer to know not only FATCA itself, but also the entire US international tax law system.

Contact Sherayzen Law Office If You Are Looking for a FATCA Lawyer

If you are looking for a Boston FATCA Lawyer, you should contact Sherayzen Law Office, PLLC – an international tax law firm that specializes in FATCA compliance, offshore voluntary disclosures of foreign accounts (and other foreign assets) and US international tax issues in general.  While based in Minneapolis, Sherayzen Law Office has provided its services to hundreds of clients throughout the world with respect to their FBAR and FATCA compliance, including correcting past US tax compliance through OVDP, Streamlined Domestic Offshore Procedures, Streamlined Foreign Offshore Procedures, Delinquent FBAR Submission Procedures, Delinquent International Information Return Submission Procedures and Reasonable Cause (Noisy) Disclosures.

Contact Us Today to Schedule Your Confidential Consultation!