Streamlined Disclosure Attorney Austin | FATCA OVDP Lawyer

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If you are a resident of Austin, Texas, and you have undisclosed foreign accounts, it is highly likely that you have searched for Streamlined Disclosure Attorney Austin. Let’s analyze this search term – Streamlined Disclosure Attorney Austin – to understand exactly what kind of an attorney fits this search.

Streamlined Disclosure Attorney Austin Search Applies to SDOP and SFOP

Let’s first look into the search for “Streamlined Disclosure”. In reality, this is a search for an attorney who offers legal help with respect to two types of Streamlined Filing Compliance Procedures: SDOP (Streamlined Domestic Offshore Procedures) and SFOP (Streamlined Foreign Offshore Procedures).

Streamlined Disclosure Attorney Austin Search Applies to Attorneys Who Offer Legal Services in Austin

Now, we need to analyze the geographical aspect of this search – i.e. Austin. What does it mean when one says that he is looking for an Austin attorney? Obviously, it applies to attorneys who reside in Austin and who offer streamlined disclosure services in Austin.

Furthermore, this search for a Streamlined Disclosure Attorney Austin also applies to attorneys who reside outside of Austin but offer their legal services to the residents of Austin. The reason for this conclusion lies in the federal nature of the Streamlined Filing Compliance Procedures – this is purely an IRS program and it has no local input from Austin (except the IRS office in the city). Since this is federal law, the actual residence of your Austin attorney does not matter.

What really matters is whether he offers legal services in Austin and whether he is competent in the matters concerning Streamlined Filing Compliance Procedures. This leads to the final part of the search for Streamlined Disclosure Attorney Austin – what kind of a specialized “attorney” are you searching for?

Streamlined Disclosure Attorney Austin Search Applies Only to International Tax Attorneys

By searching for Streamlined Disclosure Attorney Austin, you are really trying to find a very specific kind of an attorney – an international tax attorney. SFOP, SDOP, OVDP (now closed) and any other voluntary disclosure options are just IRS programs (though, important programs) within the framework of the much larger legal area of US international tax law practice.

Hence, a Streamlined Disclosure Attorney Austin search is an attempt to find an international tax attorney who not only understands Streamlined Filing Compliance Procedures, but who also possesses deep understanding of the US international tax system, its laws and regulations, and the place SDOP and SFOP occupies within this system. This understanding is crucial to an attorney’s ability to properly analyze the case and choose the best legal strategy for his client.

Sherayzen Law Office can be Your International Tax Attorney

Sherayzen Law Office, Ltd. is an international tax law firm that specializes in all types of offshore voluntary disclosures, including OVDP closed, SDOP and SFOP. Our professional tax team, led by attorney Eugene Sherayzen, is highly experienced in helping US clients around the globe with their US international tax issues, including offshore voluntary disclosure. This is why Sherayzen Law Office should be your top candidate when you search for Streamlined Disclosure Attorney Austin.

Contact Us Today to Schedule Your Confidential Consultation!

Bitcoin Offshore Abusive Tax Scheme | FATCA International Tax Lawyer

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Bitcoin Offshore Abusive Tax scheme is now at the center of the new war against offshore tax noncompliance. The IRS started this war on November 17, 2016, with the John Doe Summons petition against Coinbase, Inc., the largest US bitcoin exchanger. In this petition, the IRS Revenue Agent David Utzke details one variation of the Bitcoin Offshore Abusive Tax scheme that seems to be the main target of the IRS battle against Coinbase. Let’s discuss it in more detail.

Traditional Offshore Abusive Tax Scheme

In the petition, the IRS first provided a description of a common traditional offshore abusive tax scheme based on a real-life example of “Taxpayer 1″. In this scheme, Taxpayer 1 retained the services of a foreign promoter who set up a controlled foreign corporation which was merely a shell corporation. The corporation first diverted the taxpayer’s income to a foreign brokerage account and, then, to a foreign bank account. After the funds were transferred to a foreign bank account, Taxpayer 1 was able to repatriate the funds as cash (US dollars) through an ATM machine.

Obviously, this scheme had a number of disadvantages. First, it was not cheap: Taxpayer 1 had to retain foreign attorneys and engage in various other regulatory expenses.

Second and most importantly, the entire scheme was done in US dollars and, hence, ran a relatively high risk of the IRS detection. If the IRS discovered the scheme, it would not be difficult to trace it directly to Taxpayer 1. The weakest point of the scheme was the repatriation in US dollars of the hidden income.

Bitcoin Offshore Abusive Tax Scheme

When Taxpayer 1 discovered bitcoins, he adopted a new model which I will call a Bitcoin Offshore Abusive Tax Scheme. The first two steps (i.e. the diversion of income) were the same – a controlled foreign shell corporation was set up and the funds were diverted to a foreign account.

The difference between the schemes was really in the repatriation process. Under the Bitcoin Offshore Abusive Tax Scheme, the funds from a foreign account were moved to a bank which worked with a virtual currency exchanger (such as Coinbase), converted to bitcoins and placed in a virtual currency account. Then, the taxpayer used the bitcoins to anonymously purchase goods and services without ever converting the hidden income into US dollars. Under this process, Taxpayer 1 had hoped to avoid the IRS detection of the repatriation of funds.

Bitcoin Offshore Abusive Tax Scheme Protects the Taxpayer From IRS Detection During the Repatriation Process

The biggest advantage of the Bitcoin Offshore Abusive Tax Scheme is its ability to protect a taxpayer from the IRS detection when he tries to repatriate the undisclosed income back to the United States. Since bitcoin ownership and purchases are done anonymously and without conversion to US dollars, the IRS may never be able to detect tax noncompliance.

Revenue Agent Utzke himself states in the petition that “because there is no third-party reporting of virtual currency transactions for tax purposes, the risk/reward ratio for a taxpayer in the virtual currency environment is extremely low, and the likelihood of underreporting is significant”.

Indeed, it appears that Taxpayer 1 was highly successful in his Bitcoin Offshore Abusive Tax Scheme. The discovery of that scheme was only made possible due to the voluntary disclosure of Taxpayer 1 to the IRS (most likely Taxpayer 1 prudently decided to enter the OVDP).

Bitcoin Offshore Abusive Tax Scheme Begins to Dominate Offshore Tax Noncompliance

These advantages of the Bitcoin Offshore Abusive Tax Scheme led to its increasing popularity among noncompliant US taxpayers. In fact, it appears that the Bitcoin Offshore Abusive Tax Scheme now dominates this market. Even Agent Utzke admitted that virtual currencies have now largely replaced “traditional abusive tax arrangements as the preferred method for tax evaders”. The John Doe Summons Against Coinbase is Aimed at the Bitcoin Offshore Abusive Tax Scheme.

Given this fact, it is little surprise that the IRS decided to begin a war against abusive tax schemes involving virtual currencies and, especially, bitcoins. The John Doe Summons Petition against Coinbase is the first battle of this war against the Bitcoin Offshore Abusive Tax Scheme.

Given the IRS victory in its battle against Swiss banks, it is very likely that, in one form or another, the IRS will prevail against Coinbase and the virtual currency industry in general. This victory will result in the exposure of noncompliant US taxpayers who will then face a litany of draconian IRS penalties, including possibly criminal penalties and jail time.

Noncompliant US Taxpayer Engaged in a Bitcoin Offshore Abusive Tax Scheme Should Consider Voluntary Disclosure

Given this precarious legal environment and the significant risk of the IRS detection, noncompliant US taxpayers should consider doing a voluntary disclosure while they have the ability to do so. Once the IRS identifies noncompliant taxpayers and commences investigations against them, these taxpayers may lose forever the ability to do a voluntary disclosure to avoid criminal penalties and reduce civil penalties.

This is why these taxpayers urgently need to contact an international tax lawyer to consider their voluntary disclosure options.

Contact Sherayzen Law Office for Legal Help with Bitcoin Tax Noncompliance

If you are a US taxpayer who has engaged in a Bitcoin Offshore Abusive Tax Scheme or any other tax noncompliance involving bitcoins, contact Sherayzen Law Office for professional help as soon as possible. Our legal and accounting team has helped hundreds of US taxpayers with their voluntary disclosures and we can help You!

Contact Us Today to Schedule Your Confidential Consultation!

First Quarter 2017 Underpayment and Overpayment Interest Rates

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On December 5, 2016, the IRS announced that the First Quarter 2017 underpayment and overpayment interest rates will remain the same from the Fourth Quarter of 2016.

This means that, the First Quarter 2017 underpayment and overpayment interest rates will be as follows:

four (4) percent for overpayments (two (3) percent in the case of a corporation);
four (4) percent for underpayments;
six (6) percent for large corporate underpayments; and
one and one-half (1.5) percent for the portion of a corporate overpayment exceeding $10,000.

Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus 3 percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus 3 percentage points and the overpayment rate is the federal short-term rate plus 2 percentage points. The rate for large corporate underpayments is the federal short-term rate plus 5 percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (0.5) of a percentage point.

The First Quarter 2017 underpayment rates are relevant not only for simple amended tax returns (with amounts due), but also for a number of other different reasons. Here, I would like to emphasize two particular reasons for the importance of the first quarter 2017 underpayment rates. First, it is used to calculate interest for the US taxpayers who participate in the OVDP or the Streamlined Domestic Offshore Procedures.

Second, the first quarter 2017 underpayment rates will be relevant to future PFIC interest calculation on any excess distributions (for default Section 1291 PFICs).

Atlanta FBAR Lawyer | FATCA International Tax Attorney

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Can a lawyer who resides in Minneapolis be considered an Atlanta FBAR Lawyer? What kind of law should such a lawyer practice? These are the two questions that I seek to answer in this article.

Atlanta FBAR Lawyer Definition: Legal FBAR Services Provided in Atlanta, Georgia

Let’s start with the first question. The term Atlanta FBAR Lawyer is comprised of two broad category of lawyers. The first category consists of international tax lawyers who reside in Atlanta and offer FBAR services to the residents of Atlanta. This is self-explanatory.

The second category is a bit more complicated because it is comprised of international tax lawyers who reside outside of Atlanta but offer FBAR services to the residents of Atlanta. At first, this does not seem logical, but, once we look into the legal nature of the FBAR, it makes perfect sense.

FBAR is a federal information return required by Title 31 of the United State Code. This is not a local requirement of Atlanta or the State of Georgia; they have no influence over the interpretation and the implementation of the FBAR requirement. This means that any licensed US international tax lawyer can offer FBAR services in any of the 50 states and the District of Columbia irrespective of his physical location.

Now, it is clear why an Atlanta FBAR lawyer can reside in Minneapolis – since the local law has no influence over FBARs, there is no special knowledge or access to courts associated with local lawyers. In essence, a lawyer in Minneapolis can offer FBAR legal services in Atlanta with the same ease as a lawyer who resides in Atlanta.

Atlanta FBAR Lawyer Must Be a US International Tax Lawyer

Now, we can turn to second question of the relevant practice area of law. Since FBAR constitutes a small part of US international tax law, there is a profound connection between FBAR and international tax law. In fact, it is this relationship between the FBAR and the rest of the international tax law requirements that apply in a particular case (based on the facts of that case) that determines the legal position of the taxpayer in a voluntary disclosure case.

This means that an Atlanta FBAR lawyer must also be an international tax lawyer – i.e. a lawyer who has profound knowledge of US international tax law requirements, including FBAR.

Sherayzen Law Office Can Be Your Atlanta FBAR Lawyer

Sherayzen Law Office specializes in FBARs and the US international tax law. Our legal and accounting team has a profound knowledge of this area of law and the extensive experience in helping clients with international tax law issues, including offshore voluntary compliance with respect to delinquent FBARs. We have helped hundreds of US taxpayers worldwide with their FBAR issues and we can help You!

Contact Sherayzen Law Office today to schedule Your Confidential Consultation!

Israeli-Swiss AEOI Declaration Signed | FATCA Lawyer New York

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On November 27, 2016, Israel and Switzerland signed a joint declaration committing to implement the automatic exchange of financial account information (AEOI). The joint declaration (the Israeli-Swiss AEOI Declaration) was signed by Moshe Asher, director of the Israel Tax Authority, and Joerg Gasser, Swiss state secretary for international financial matters, on behalf of their respective governments.

Israeli-Swiss AEOI Declaration Will Follow CRS

The Israeli-Swiss AEOI Declaration states that AEOI will be based on the Multilateral Convention on Mutual Administrative Assistance in Tax Matters of 25 January 1988, as amended by the Protocol of 27 May 2010, and subject to the signing of the Multilateral Competent Authority Agreement on the Automatic Exchange of Financial Account Information (MCAA). The information subject to exchange will be collected according to the Common Reporting Standard (CRS) adopted by OECD.

The MCAA is based on the international standard for the exchange of information developed by the OECD. The OECD first introduced the standard in February of 2014; the standard was later approved in November of 2015 by the G-20 leaders during their summit in Brisbane, Australia.

Israeli-Swiss AEOI Declaration Sets Forth the Implementation Time Frame

The Israeli and Swiss governments committed to start collecting the CRS-required data in 2018. The actual transmission of data will commence in 2019 and continue onwards.

Israeli-Swiss AEOI Declaration Foresees Voluntary Disclosure Coordination

The Israeli-Swiss AEOI Declaration commits both countries to inform each other about their respective voluntary disclosure programs (i.e. the voluntary disclosures by their citizens of their financial assets). The stated aim is to provide a smooth transition to the AEOI.

Implications of Israeli-Swiss AEOI Declaration for US Taxpayers

The signing of the Israeli-Swiss AEOI Declaration further increases the already high probability of the IRS detection of noncompliant US taxpayers with undisclosed offshore assets in these countries. As financial institutions review their client data, there is an increased probability that they may encounter that some of their taxpayers are US taxpayers whose information needs to be reported to the IRS under FATCA.

Furthermore, under the Israeli-Swiss AEOI Declaration, both countries agree to cooperate with respect to their voluntary disclosure programs. Under these circumstances, it is possible that more information than usual will be revealed during these voluntary disclosures and exchanged between the countries; some of that information may be disclosed to the IRS.

Contact Sherayzen Law Office for Help With the IRS Voluntary Disclosure of Your Undisclosed Foreign Assets and Foreign Income

If you are a US tax resident with undisclosed assets in Israel and/or Switzerland, contact Sherayzen Law Office for help with your IRS voluntary disclosure of these assets as soon as possible. In today’s FATCA-dominated world, the probability that the information regarding your undisclosed assets will be detected by the IRS has increased exponentially. The additional information exchange agreements, such as the recent Israeli-Swiss AEOI Declaration, only make this probability higher. At this point, a US tax resident with undisclosed assets in Israel and Switzerland is running an unacceptably high risk of IRS detection that may result in the imposition of high IRS penalties, including criminal penalties.

Sherayzen Law Office is a leading international tax firm in the area of IRS voluntary disclosure of offshore assets and income. We have helped hundreds of US taxpayers with assets around the globe to bring their tax affairs into full compliance with US tax laws, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!