OVDP Foreign Accounts Lawyers: Swiss Banks Disclosure Deadline on April 30, 2014

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As many OVDP Foreign Accounts Lawyers know, April 30, 2014 is a crucial deadline for the U.S. Department of Justice (“DOJ”) The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”). By this date, numerous Swiss banks will have to disclose the names of US accountholders, account balance information, and various other data with respect to U.S. accountholders.

OVDP Foreign Accounts Lawyers: What Banks Will Disclose U.S. Taxpayers by April 30, 2014

The list of Swiss Banks who will disclose their U.S. taxpayers to the IRS and DOJ by April 30, 2014 is very large and includes prominent banks such as:

Aargauische Kantonalbank
Acrevis Bank AG
AEK Bank 1826
Appenzeller Kantonalbank
Baloise Bank SoBa
Bank am Bellevue
Bank Coop AG
Banque Cantonale de Fribourg
Banque Cantonale de Genève
Banque cantonale du Jura
Banque cantonale du Valais
Banque Cantonale Neuchâteloise
Banque Cantonale Vaudois
Banque Privee Edmond de Rothschild
Basellandschaftliche Kantonalbank
Berner Kantonalbank
Cembra Money Bank AG
Cornèr Banca SA
Edmond de Rothschild Group
EFG International AG
Glarus Bank
Graubündner Kantonalbank
Hyposwiss Privatbank Zurich AG
Hyposwiss Private Bank Geneve SA
Hypothekarbank Lenzburg
Linth Bank
Lombard Odier & Cie.
Luzerner Kantonalbank
Migros Bank
Nidwaldner Kantonalbank
Piquet Galland & Cie SA
Post Finance
Raiffeisen
Rothschild Bank AG, Zurich
Saanen Bank
Schaffhauser Kantonalbank
Schwyzer Kantonalbank
St. Galler Kantonalbank
Ticino Cantonal Bank
Union Bancaire Privee
Valartis Bank (Switzerland)
Valiant Holding AG
Vontobel Holding AG
VP Bank (Switzerland)
Walliser Kantonalbank
Zuger Kantonalbank

Note: this is just a selective list – many other banks that are not named here are participating in the Program. This is particularly true for many private banks that are not required to disclose publicly whether they are participating in the Program.

OVDP Foreign Accounts Lawyers: Two Cantonal Banks and Other Category 1 Banks Excluded from the Program

The US Department of Justice (DOJ) previously launched investigations against two other Swiss cantonal banks, such as Baser Kantonalbank and Zürcher Kantonalbank. These banks are classified as Category 1 banks and will not be allowed to enroll in the Program. Similarly, otehr Category 1 banks cannot participate in the program Credit Suisse, Julius Baer, Pictet, HSBC Privatbank, Liechtensteinische Landesbank, Bank Leumi, Bank Hapoalim, Bank Mizrahi, Rahn & Bodmer, Bank Wegelin, Bank Frey, Neue Zürcher Bank.

OVDP Foreign Accounts Lawyers: Letters from Banks

As part of their “voluntary disclosure” under the Program, the Swiss Banks have already sent out letters to the majority of their U.S. account holders. These letters are not mere warnings (though, they also are exactly that to many unsuspecting U.S. taxpayers) to U.S. taxpayers with undisclosed Swiss accounts, but they are also a way for the Swiss Banks to minimize their penalty exposure (because, in calculating their own penalty base, Category 2 banks do not have to count the bank accounts which are already disclosed to the IRS).

OVDP Foreign Accounts Lawyers: What Does April 30, 2014 Mean for U.S. Taxpayers With Undisclosed Foreign Accounts

As most OVDP Foreign Accounts Lawyers indicate, April 30, 2014, marks a very important deadline for U.S. taxpayers with undisclosed foreign accounts in Switzerland. The reason is found in the Offshore Voluntary Disclosure Program (“OVDP”) acceptance rules.

The rules basically state that if the IRS receives the information about undisclosed foreign accounts from a third party before U.S. owner of these accounts enters the OVDP program, then the IRS will likely reject (or, as it was in the case with some OVDP participants last year – eject such U.S. owner from the OVDP) such U.S. owner’s application to participate in the OVDP program.

Therefore, OVDP Foreign Accounts Lawyers advise their clients that a very important and the most official route to voluntary disclosure will simply become completely closed to many U.S. taxpayers who fail to enter OVDP and disclose their Swiss accounts prior to April 30, 2014.

Of course, it is important to note, that it is possible that some of the Swiss banks have already disclosed such unreported accounts owned by U.S. taxpayers and many more are likely to do it in advance of the April 30, 2014, deadline.

In such case, U.S. taxpayers who either hold or previously held undisclosed bank accounts at any of the Swiss cantonal banks eligible for enrollment in the Program, or any bank already under investigation, may face substantial civil and potential criminal penalties if they do nothing or if their cases are not handled properly.

Therefore, it is imperative for U.S. taxpayers with undisclosed Swiss bank and financial accounts to contact OVDP Foreign Accounts Lawyers who specializes in the OVDP disclosure of foreign accounts.

Contact Sherayzen Law Office for Professional Help with Undisclosed Swiss Accounts

Experienced OVDP (program now closed) foreign accounts lawyer Eugene Sherayzen of Sherayzen Law Office, Ltd. can help you with all of your voluntary disclosure issues. Our experienced tax law office will thoroughly review your case, estimate your existing tax and FBAR liability in the United States, identify the available voluntary disclosure options, prepare your voluntary disclosure package (including all legal documents and tax forms) and rigorously defend your interests during your negotiations with the IRS.

Contact Us Now to schedule a Confidential Consultation as soon as possible.

Minnesota Tax Attorneys: Corporate Deadlines on March 17, 2014

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Minnesota tax attorneys and attorneys in other states warn their clients that there are two important IRS deadlines next Monday, March 17, 2014.

First, corporate income tax returns are due for corporations with fiscal year ending on December 31, 2013. Normally, the deadline would be on March 15, but because this date falls on Saturday, the deadline in 2014 is March 17.

If you are not ready to file corporate income tax return, you can request an extension using Form 7004 for an additional six months until September 15, 2014. Note, if you file an extension, you still must pay the corporate taxes due by March 17, 2014 (in such a case, Minnesota tax attorneys estimate the final tax liability of the corporation for 2013 and ask their corporate clients to pay the amount due with extension). As Minnesota tax attorneys advise, in most cases, EFTPS system should be used by the corporations to make such a payment.

Minnesota tax attorneys also warn about a second important deadline on March 17 ,2014. This deadline concerns the Subchapter S election for the corporations with tax years ending on December 31, 2013. The corporation can make such an election no later than two months and fifteen days after the beginning of the tax year in which the election is to take place. Again, since March 15 is Saturday, the deadline for this election is moved to March 17, 2014.

Whether your corporation may benefit from becoming an S-corporation is a question that depends on your particular facts. In such case, Minnesota tax attorneys weigh in multiple consideration, legal and tax, before giving an advice to their corporation clients.

Of course, corporations with fiscal years ending on a date other than December 31, 2013, have their own deadlines, but the rule behind calculating the deadlines in such cases are similar. Therefore, you should contact your Minnesota tax attorney to determine the exact due date of the income tax return of your corporation.

Canada FATCA: Canada Agrees to Implement FATCA

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On February 5, 2014, the U.S. Department of the Treasury announced that the United States signed an intergovernmental agreement (IGA) with Canada to implement the Foreign Account Tax Compliance Act (FATCA). Since Treasury last announced multiple IGA signings in mid-December 2013, agreements have also been signed with Italy and Mauritius, the latter of which also signed a new tax information exchange agreement.

Congress enacted FATCA in 2010 to target non-compliance by U.S. taxpayers using foreign accounts, and the provision has since become the global standard for promoting tax transparency. As of February 5, 2014, the United States had signed 22 IGAs and had 12 agreements in substance.  Canada FATCA Agreement is one of the most recent IGAs to be signed.

In general, FATCA seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of certain payments made to foreign financial institutions (FFIs) who do not agree to identify and report information on U.S. account holders. Governments have the option of permitting their FFIs to enter into agreements directly with the IRS to comply with FATCA under U.S. Treasury Regulations or to implement FATCA by entering into one of two alternative Model IGAs with the United States.

Canada FATCA: Model 1 IGA Signed by Canada

Canada FATCA implementation agreement is classified as Model 1 IGA. Under the Canada FATCA implementation agreement, FFIs will report the information required under FATCA about U.S. accounts to Canada Revenue Agency (“CRA”) , which in turn will report the information (as required by the Canada FATCA IGA) to the IRS.

Canada FATCA: US Taxpayers with Undisclosed Canadian Bank and Financial Accounts Are in Danger

What do these Canada FATCA developments mean for US taxpayers with undisclosed Canadian Bank and Financial Accounts? It means that all of these accounts are likely to be disclosed by the Canadian banks to the IRS, and these taxpayers have very little time to act.

If the IRS finds out about these undisclosed accounts, these U.S. taxpayers may face draconian willful civil and even criminal FBAR penalties.

This means that the owners of undisclosed Canadian accounts should consult an international tax expert in undisclosed foreign accounts as soon as possible.

Contact Sherayzen Law Office for Professional Help with the Voluntary Disclosure of Your Canadian Bank and Financial Accounts

If you have undisclosed financial accounts in Canada, contact Sherayzen Law Office as soon as possible to schedule a consultation. Our law firm has experienced expertise in voluntary disclosure of undisclosed foreign accounts and foreign assets. We have helped U.S. taxpayers around the world to bring themselves back into US tax compliance, while minimizing their tax and FBAR penalty exposure. Call or email us NOW!

OVDP International Tax Lawyer: Swiss Cantonal Banks Enter US Program for Banks

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As an OVDP International Tax Lawyer, I continue to point out the centrality of the current U.S. Department of Justice (“DOJ”) The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) to the global international tax compliance efforts of the United States. As previous explained, the Program basically operates as a voluntary disclosure program for Swiss banks, similar to the US Internal Revenue Service’s Offshore Voluntary Disclosure Program (“OVDP”) for U.S. taxpayers holding undisclosed offshore accounts. The DOJ promises that, in return for providing disclosure of the accounts held by U.S. taxpayers and, in some case, paying various penalties, the qualifying Swiss banks can avoid U.S. criminal prosecution.

Cantonal Swiss Banks deserve a special attention from U.S. taxpayers precisely because they tend to be smaller, more involved in local life and (prior to the Program) would have been least likely to be concerned with the U.S. tax compliance. Yet, as it is explained below, these Swiss banks are actively participating in the Program. U.S taxpayers with undisclosed accounts in Switzerland are now faced with an even more immediate impact on their U.S. tax compliance. It is very important that they seek advice from an experienced OVDP International Tax Lawyer found at Sherayzen Law Office.

OVDP International Tax Lawyer: Switzerland Cantonal Banks Enter the Program

According to recent news reports, half of Switzerland’s publicly-backed cantonal banks (which are either majority or entirely-owned by the Swiss cantons) have announced they will join the Program. In general, many of these banks are protected by a full state guarantee (each respective canton has a subsidiary responsibility its bank’s liabilities). Switzerland has twenty-four cantonal banks in total, serving Switzerland’s twenty-six cantons. As of the end of 2013, the following cantonal banks have stated they will enter the Program:

Aargau (Aargauische Kantonalbank) (AKB)
Appenzell (Appenzeller Kantonalbank) (APPKB)
Geneva (Banque Cantonale de Geneve (BCGE)
Glarus (Glarner Kantonalbank) (GLKB)
Graubünden (Graubundner Kantonalbank) (GKB)
Lucerne (Luzerner Kantonalbank) (LUKB)
Nidwalden (Nidwaldner Kantonabank) (NWKB)
Obwalden (Obwaldner Kantonalbank (OWKB)
Schwyz (Schwyzer Kantonalbank) (SZKB)
St. Gallen (St. Galler Kantonalbank) (SGKB), along with its subsidiaries Hyposwiss Privatbank Zurich AG and Hyposwiss Private Bank Geneve SA)
Vaud (Banque Cantonale Vaudoise (BCV), along with its subsidiary Piquet Galland & Cie SA)
Zug (Zuger Kantonalbank) (ZugerKB)

At least eight of twelve cantonal banks have opted to apply under “Category 2” for Swiss banks likely to accounts held by US persons (see here for more information about this category), which could result in substantial fines, but absolve bank officials from criminal liabilities. Zuger Kantonalbank, for example, stated that it would apply under this category even though it claimed it did not actively seek US customers.

As of the end of 2013, four cantonal banks stated that will enroll in the Program under Category 4 for essentially local Swiss banks that are unlikely to have assets consisting of undeclared U.S.-taxpayer accounts. Swiss banks applying under Category 3 or 4 have a limited time available between July-October, 2014 in which to notify the US as to whether they will enter the Program.

OVDP International Tax Lawyer: Two Cantonal Banks Excluded from the Program

The US Department of Justice (DOJ) previously launched investigations against two other Swiss cantonal banks, such as Basler Kantonalbank (Basel) and Zürcher Kantonalbank (Zurich). These banks are classified as Category 1 banks and will not be allowed to enroll in the Program.

Contact Sherayzen Law Office for Legal Help with Undisclosed Swiss Accounts

U.S. taxpayers who either hold or previously held undisclosed bank accounts at any of the Swiss cantonal banks eligible for enrollment in the Program, or any bank already under investigation, are advised to seek competent and experienced legal assistance. U.S. taxpayers will likely face substantial civil and potential criminal penalties if they continue to hold undisclosed accounts or if their cases are not handled properly. At Sherayzen Law Office, Ltd., we can help with your all of your voluntary disclosure issues.

Foreign Partnership Tax Attorneys: Filing Form 8865 Schedule O (Part I)

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Foreign Partnership Tax Attorneys should point out to their clients that Form 8865 should be used by US taxpayers to report the information required under IRC section 6038 (reporting regarding controlled foreign partnerships), section 6038B (reporting of transfers made to foreign partnerships), and/or section 6046A (reporting of acquisitions, dispositions, and changes in foreign partnership interests).

This article will explain the basics of Part I (“Transfers Reportable Under Section 6038B”) for Schedule O– “Transfer of Property to a Foreign Partnership”, an additional form submitted with Form 8865 that must be completed by certain categories of taxpayers. This article is not intended to convey tax or legal advice. US-International partnership taxation can involve many complex tax and legal issues, so you are advised to seek an experienced attorney in these matters. Sherayzen Law Office, Ltd. can assist you in all of your tax and legal needs, and help you avoid making costly mistakes.

Foreign Partnership Tax Attorneys: Who Must File Schedule O?

Schedule O is typically required to be filed by Category 3 filers under the Form 8865 instructions. In general, Category 3 filers are US persons who contributed property during their tax year to a foreign partnership in exchange for a partnership interest in the partnership (a section 721 transfer), if such persons either owned (directly or constructively) at least a 10% interest in the foreign partnership immediately after the contribution, or if value of the property contributed, when added to the value of any other property contributed to the partnership by such persons (including related persons), during the 12-month period ending on the date of the contribution is greater than $100,000.

Note, this is a general summary of Category 3 filers, and does not include all possibilities. It is very important to consult a foreign partnership tax attorney for help. Please see the instructions or contact Sherayzen Law Office for further details.

Foreign Partnership Tax Attorneys: Schedule O, Part I (“Transfers Reportable Under Section 6038B”)

Part I of Schedule O is used to report the contribution of property to a foreign partnership. In column (a), taxpayers must fill out the date of the property transfer (and if the transfer consisted of multiple transactions over a number of dates, the date the transfer was completed, would be entered). In Column (b), taxpayers list the number of items of property contributed, and in column (c), the fair market value of the property transferred, as of the date of the transfer, must be specified. Column (d) needs to be completed to detail the contributed property’s adjusted basis as of the date of transfer.

If appreciated property was contributed by a taxpayer, column (e) must be filled out, and the method (traditional, traditional with curative allocations, or remedial) used by the foreign partnership to make section 704(c) allocations with respect to each item of property must be specified (see Regulations section 1.704-3(b), (c), and (d) for more information). Also note that the instructions require that if appreciated property or intangible property is contributed, taxpayers must, “[P]rovide the information required in columns (a) through (g) separately with respect to each item of property transferred (except to the extent you are allowed to aggregate the property under Regulations sections 1.704-3(e)(2), (3), and (4)).” If gain was recognized by the taxpayer on the contribution of property, then column (f) must be completed. In Column (g), taxpayers need to state their percentage interest in the foreign partnership immediately after the property transfer (see the instructions for further information about specific types of percentage interest).

Finally, taxpayers may need to provide supplemental information, if required. Further, if property was contributed to a foreign partnership as part of a broader transaction, information about the transaction should be described.

Contact Sherayzen Law Office for Help With Foreign Partnership Compliance

If you have an ownership interest in a foreign partnership, please contact Sherayzen Law Office for help. Our experienced foreign partnership tax law firm will thoroughly review the facts and circumstances of your case, properly prepare all of the required tax compliance documents and offer further planning with respect to U.S. taxes.