offshore voluntary disclosure lawyers Minneapolis

Offshore Voluntary Compliance Draws 100,000 Taxpayers and $10 Billion

On October 21, 2016, the IRS announced that more than 100,000 US taxpayers participated in its Offshore Voluntary Compliance programs paying a total of more than $10 billion. Let’s explore these Offshore Voluntary Compliance numbers in more depth.

OVDP is Still the King of Offshore Voluntary Compliance but Its Impact is More Targeted

The IRS flagship Offshore Voluntary Disclosure Program (OVDP) is still the most profitable program for the IRS in terms of actual amount of dollars paid by the taxpayers. More than 55,800 taxpayers have come into the OVDP to resolve their past US tax noncompliance. They paid a total of more than $9.9 billion in taxes, interest and penalties since 2009.

These numbers are very impressive, but they also point to a more targeted influence of the OVDP compared to its past. In October of 2015, the IRS reported that more than 54,000 taxpayers entered into the OVDP and paid more than $8 billion. In other words, in the past year (November 2015 – October 2016), about 1,400 taxpayers entered into the OVDP and paid an additional $1.8 billion.

What this means is that the IRS was highly successful in properly addressing the basic original injustice of the OVDP program which was equally painful to small taxpayers and large taxpayers as well as non-willful taxpayers and willful taxpayers. The OVDP now draws a more limited number of people with substantial foreign assets who pay a higher penalty for their prior noncompliance.

The only danger that still remains is the issue of incompetent tax advisors who might be entering their wealthier clients into the OVDP irrespective of their willfulness or non-willfulness.

Streamlined Procedures is the Favorite Offshore Voluntary Compliance Option for “Smaller” Taxpayers

The IRS data also reflects the tremendous popularity of the Streamlined Procedures among the middle-class taxpayers with limited international asset exposure. According to the IRS, as of October of 2016, 48,000 taxpayers have made use of various Streamlined Procedures (SDOP and SFOP) to resolve their prior non-willful US international tax noncompliance. These taxpayers paid a total of about $450 million in taxes, interest and penalties.

In the prior report (October of 2015), the IRS stated that only 30,000 taxpayers used the Streamlined Procedures; 20,000 of them after June of 2014. This means that the Streamlined Procedures continues to attract the great majority of the taxpayers with smaller foreign assets.

Offshore Voluntary Compliance is One of he Key Strategies to Resolve Prior US International Tax Noncompliance

Undoubtedly, Offshore Voluntary Compliance options offer the key strategies to resolve prior US international tax noncompliance. The other options, such as Reasonable Cause Disclosure and Quiet Disclosure, are much more limited in scope and application. In fact, in the case of a Quiet Disclosure, this option may put the taxpayers into a position more dangerous than they were in before their quiet disclosure due to the increased danger of detection without any protection offered by the Offshore Voluntary Compliance options.

Doing nothing is also not a good option for noncompliant taxpayers, because of the increased risk that their prior noncompliance will be deemed willful once the IRS discovers their noncompliance.

The risk of the IRS detection of prior tax noncompliance is very high in today’s world. This detection may come not just from the IRS investigations of a specific taxpayer, the massive disclosures by the banks already being investigated by the IRS or even from the banks that provided information as a result of the Department of Justice’s Swiss Bank Program. Today, the primary danger of detection comes from the third-party reporting under the Foreign Account Tax Compliance Act (FATCA) and the network of inter-governmental agreements (IGAs) between the U.S. and partner jurisdictions.

Contact Sherayzen Law Office to Secure Professional Help With Your Offshore Voluntary Compliance Case

If you have undisclosed foreign accounts or any other foreign assets, contact Sherayzen Law Office as soon as possible for professional help with your voluntary disclosure.

Sherayzen Law Office is a leader in offshore voluntary disclosures which will help you with your entire case, including: the original determination of the best Offshore Voluntary Compliance option; the implementation of this option, including the preparation of all relevant legal documents and tax forms; the filing of the voluntary disclosure package; and the defense of your voluntary disclosure positions against the IRS.

We have helped hundreds of US taxpayers around the world to bring their US tax affairs into full compliance in the least painful and most beneficial way, and we can help you!

Contact Us Today to Schedule Your Confidential Initial Consultation!

Guilty Plea for Hiding Income from Undeclared Panamanian Bank Account

On September 21, 2016, the IRS and the DOJ scored yet another success in their fight against hiding income in Central American banks – Mr. Saul Hyatt pleaded guilty to hiding income from an undeclared Panamanian bank account.

Facts of the Case: Undeclared Panamanian Bank Account

The Hyatt case falls right within the type of cases that the DOJ loves to prosecute. According to documents filed with the court, Mr. Hyatt conspired with another individual in the United States and others to conceal his assets and income derived from the sale of duty-free alcohol and tobacco products. For that purpose, he used a registered Panamanian corporation, Centennial Group, to buy and sell the duty-free products: alcohol and tobacco. The alcohol was shipped through a customs-bonded warehouse in the Foreign Trade Zone in Fort Lauderdale, Florida. The tobacco products (Chinese-brand cigarettes sold under the names “Chung Hwa” and “Double Happiness”) passed through a customs-bonded warehouse in North Bergen, New Jersey.

It was a very successful business and Mr. Hyatt decided to push it further – he decided to make his profits from selling duty-free products tax free. He opened a Panamanian bank account and, between 2006 and 2012, wire transferred $1,627,832 in profits to this account. Mr. Hyatt never declared the Panamanian bank account on his FBARs.

Then, Mr. Hyatt repatriated at least some of the funds from Panamanian bank account to buy a Mercedes Benz SL 550R automobile and to pay for $19,000 in interior design goods and services. It is possible that these transactions allowed the IRS and the DOJ to trace his undeclared Panamanian bank account.

Consequences of Failure to Report US-Source Income and a Panamanian Bank Account

As a result of his tax evasion scheme and his failure to report his Panamanian bank account, Mr. Hyatt faces a statutory maximum sentence of five years in prison as well as a term of supervised release and monetary penalties. He also agreed to file accurate tax returns and to pay the IRS all taxes and income tax penalties owed. In addition, Mr. Hyatt agreed to pay the FBAR penalty for failure to report his Panamanian Bank Account in the amount of $854,465.50 (looks like a 50% penalty on the highest balance).

Lessons from this Case: How an Undeclared Panamanian Bank Account Led to Criminal Investigation

Mr. Hyatt’s case is a typical case that the DOJ designates from a criminal prosecution. We can distinguish four particular features here. First, he earned a large amount of income in the United States and failed to report it. Mr. Hyatt admitted that his scheme resulted in a tax loss of $521,986.

Second and this is the biggest trigger for a criminal prosecution, Mr. Hyatt decided to actively hide his US-source income by transferring it overseas to a Panamanian bank account.

Third and this is a favored IRS instrument to impose large fines and criminal penalties – Mr. Hyatt failed to declare his Panamanian bank account on FBARs. FBAR (the Report of Foreign Bank and Financial Accounts) is the most severe form in terms of its potential penalties for tax noncompliance and Mr. Hyatt felt it right away; even after negotiating his guilty plea, he still agreed to pay the FBAR penalty in the amount of 854,465.50.

In its press release, the DOJ emphasized the importance of that the fact that Mr. Hyatt failed to file his FBARs. “Concealing income and assets offshore is not tax planning,” said Special Agent in Charge Jonathan D. Larsen of IRS-Criminal Investigation, Newark Field Office. “Plain and simple, this is international tax fraud. The facts in this case are clear. Mr. Hyatt earned income through the sale of duty-free alcohol and tobacco products and intentionally had over $1.6 million of profits wired into an undeclared offshore bank account in Panama. Today’s plea shows how determined we are at the IRS and Department of Justice in uncovering this type of international tax fraud and putting a stop to it.”

Sherayzen Law Office has warned a long time ago that the IRS and the DOJ focused their enforcement efforts not only on Switzerland, but also on Central America, particularly on the schemes involving an undeclared Panamanian bank account.

Finally, Mr. Hyatt used a foreign corporation in his scheme to conceal his US-source profits. It is not known at this point whether Form 5471 was filed for the corporation, but it is likely that it was not.

The combination of these four factors – failure to declare US-source income, attempt to conceal it in a Panamanian bank account, failure to file FBARs to declare the Panamanian bank account and the use of a foreign corporation in a tax evasion scheme – is a typical lethal combination of facts that leads the DOJ and the IRS to decide to criminally prosecute a US taxpayer.

Contact Sherayzen Law Office for Legal Help if You Have an Undeclared Panamanian Bank Account

The penalties for FBAR noncompliance are high and include the possibility of incarceration (as Mr. Hyatt’s case demonstrated once again); therefore, time is of the essence to preempt the IRS and the DOJ through a voluntary disclosure. However, time is of the essence.

Therefore, if you have an undeclared Panamanian bank account or a foreign account in any other country, you should contact Sherayzen Law Office as soon as possible. Our experienced legal team, headed by an international tax attorney Eugene Sherayzen, has helped hundreds of US taxpayers around the world and we can help you!

Hapoalim Prepares for Settlement with DOJ | FATCA Tax Attorney

October 9, 2016/0 Comments/in Legal Notes, offshore voluntary disclosure lawyers Minneapolis /by Manager

On October 6, 2016, Israeli bank Hapoalim Ltd. announced that, in order to cover the costs of a future settlement with the US Department of Justice (DOJ), it will add a $70 million charge to an existing $50 million provision in its third-quarter results. The expected settlement will cover Hapoalim’s role in helping US tax residents to evade their US tax obligations.

In its news release, Hapoalim stated that its representatives held an initial discussion with the DOJ on September 30, 2016, to discuss the future settlement. The bank did not indicate whether $120 million in charges that it booked to date is the actual amount that Hapoalim will pay under its settlement with the DOJ. Rather, the news release emphasizes the uncertainty that still exists with respect to the actual amount.

The issue of the DOJ investigation dates back to the year 2011. In its recent (June 30, 2016) financial statements Hapoalim confirmed that its Swiss subsidiary Bank Hapoalim (Switzerland) Ltd. had been notified by Swiss authorities in 2011 that it was being investigated by the US government as a result of the DOJ’s suspicions that the bank had assisted US clients in evading federal taxes. The Swiss subsidiary could not resolve this issue in 2013 in the DOJ’s Swiss Bank Program due to the fact that it could not be classified as a Category 2 bank.

It is important to remember that the DOJ is not the only institution that is going after Hapoalim. The State of New York is conducting its own review. In its news release, Hapoalim indicated that the $120 million charge is not related to the New York investigation.

While all of this legal uncertainty makes it difficult for Hapoalim to assess its future liability under any deferred prosecution agreement, one can compare its situation with Bank Leumi. In 2014, Bank Leumi Group entered into a Deferred Prosecution Agreement with the DOJ under which it paid $270 million ($157 million of this penalty was allocated to Bank Leumi’s Swiss accounts held by US taxpayers).

If we rely on this precedent, it appears that Hapoalim is greatly underestimating its penalty, because Bank Leumi and Hapoalim are fairly similar in size as well as their actions in soliciting US clients. One also must not forget about the possible future indictments of Hapoalim’s employees (at least in the United States) by the DOJ.

Bergantino Case: Another Swiss Banker Pleads Guilty

June 27, 2016/0 Comments/in Legal Notes, offshore voluntary disclosure lawyers Minneapolis /by Manager

On June 22, 2016, the IRS and the US DOJ successfully brought to conclusion the Bergantino Case with a guilty plea by Mr. Michele Bergantino (a citizen of Italy and a resident of Switzerland) to charges related to aiding and assisting U.S. taxpayers in evading their income taxes. Mr. Bergantino, a former Credit Suisse AG banker, pleaded guilty before U.S. District Judge Gerald Bruce Lee to conspiring to defraud the United States by assisting U.S. taxpayers to conceal foreign accounts and evade U.S. tax during his employment as a banker working for Credit Suisse AG on its North American desk.

The Bergantino Case Factual Background

According to the DOJ, Mr. Bergantino admitted that from 2002 to 2009, while working as a relationship manager for Credit Suisse in Switzerland, he participated in a wide-ranging conspiracy to aid and assist U.S. taxpayers in evading their income taxes by concealing assets and income in secret Swiss bank accounts. Mr. Bergantino oversaw a portfolio of accounts, largely owned by U.S. taxpayers residing on the West Coast, which grew to approximately $700 million of assets under management.

During his time as a relationship manager, Mr. Bergantino assisted many U.S. clients in utilizing their Credit Suisse accounts to evade their U.S. income taxes and to facilitate concealment of the U.S. clients’ undeclared financial accounts from the IRS. Among the steps taken by Mr. Bergantino to assist clients in hiding their Swiss accounts were the following: assuring them that Swiss bank secrecy laws would prevent Credit Suisse from disclosing their undeclared accounts to U.S. law enforcement; discussing business with clients only when they traveled to Zurich to meet him; structuring withdrawals from their undeclared accounts by sending multiple checks, each in amounts below $10,000, to clients in the United States; facilitating the withdrawal of large sums of cash by U.S. customers from their Credit Suisse accounts at Credit Suisse offices in the Bahamas, in Switzerland, particularly the Credit Suisse branch at the Zurich airport and at a financial institution in the United Kingdom; holding clients’ mail from delivery to the United States; issuing withdrawal checks from Credit Suisse’s correspondent bank in the United States; and taking actions to remove evidence of a U.S. client’s control over an account because the U.S. client intended to file a false and fraudulent income tax return. Moreover, Mr. Bergantino understood that a number of his U.S. clients concealed their ownership and control of foreign financial accounts by holding those accounts in the names of nominee tax haven entities, or structures, which were frequently created in the form of foreign partnerships, trusts, corporations or foundations.

Mr. Bergantino also admitted traveling to the United States approximately one to two times a year to meet with clients, taking careful steps to conceal the purpose of his visits from U.S. law enforcement. He used private couriers to send clients’ account statements to the U.S. hotels where he stayed, so that he would not be caught traveling with clients’ statements in his possession. In addition, Mr. Bergantino obtained “travel” account statements for each client he intended to visit which were devoid of Credit Suisse’s logo and account or customer identification information and used business cards that Credit Suisse provided that contained only his name and office number and did not carry the Credit Suisse name or logo. On entering the United States, Mr. Bergantino provided misleading information regarding the nature and purpose of his visit to U.S. Customs and Border Protection authorities.

In addition to assisting customers in evading their U.S. taxes, Mr. Bergantino also provided illegal advice to U.S. customers regarding investments in U.S. securities. Neither Mr. Bergantino nor Credit Suisse were registered with the U.S. Securities and Exchange Commission and both U.S. law and Credit Suisse policy prohibited Mr. Bergantino and other Credit Suisse employees from providing investment advice in the United States. Nevertheless, Credit Suisse management pressured its employees, including Mr. Bergantino, to make sales in the United States.

Mr. Bergantino faces a statutory maximum sentence of five years in prison. He also faces monetary penalties and restitution. Mr. Bergantino admitted that the tax loss associated with his criminal conduct was more than $1.5 million but less than or equal to $3.5 million.

The Bergantino Case Guilty Plea Comes After Three Wins and One Loss for the IRS

The Bergantino Case allows the IRS to solidify its victory claims against Credit Suisse. Two of Mr. Bergantino’s co-defendants, Mr. Andreas Bachmann and Mr. Josef Dörig, already pleaded guilty to the superseding indictment in 2014 and were sentenced on March 27, 2015. Credit Suisse pleaded guilty in May 2014 for conspiring to aid and assist taxpayers in filing false returns and was sentenced in November 2014 to pay $2.6 billion in fines and restitution. However, Mr. Raoul Weil was acquitted, even though he was the highest-ranking Credit Suisse banker prosecuted by the IRS.

What the Bergantino Case Means to U.S. Taxpayers with Undeclared Offshore Accounts

The Bergantino Case is one more example of the long reach of the IRS and the precarious situation of U.S. taxpayers with undeclared offshore accounts. First, the IRS demonstrated one more time that geographical distance does not matter when it comes to the IRS ability to prosecute those are in violation of U.S. tax laws. “Mr. Bergantino is now the third fugitive to come to the United States and plead guilty to charges in this case,” said Acting Assistant Attorney General Ciraolo. “To those who have actively assisted U.S. taxpayers in using offshore accounts to evade taxes, the message is clear: staying outside the United States will provide little comfort. We will investigate and charge you, and will work relentlessly to hold you to account for your actions.”

Second, with each guilty plea, the IRS obtains more and more evidence against U.S. taxpayers with undeclared offshore accounts, including the patterns for how these accounts were set up and maintained. This allows the IRS to broaden its prosecution of noncomplying taxpayers in a faster and cheaper way.

Contact Sherayzen Law Office for Help with Undeclared Offshore Accounts

If you are a U.S. taxpayer with undeclared offshore accounts and other offshore assets, you should contact Sherayzen Law Office as soon as possible. Our team of tax professionals are highly experienced in the voluntary disclosure of undeclared offshore accounts and we can help you.

Contact Us Today to Schedule Your Confidential Consultation!

Houston OVDP Tax Attorney

June 22, 2016/0 Comments/in Legal Notes, offshore voluntary disclosure lawyers Minneapolis /by Manager

Who is considered to be Houston OVDP tax attorney? Initially, most taxpayers would say that this is a strange question to ask, because the answer is very simple: Houston OVDP tax attorney is an attorney who resides in Houston and specializes in helping U.S. taxpayers disclose their undeclared foreign accounts.

This answer, however, is anachronistic and erroneous, because it does not take into account two important considerations. First, there is no “OVDP” law; OVDP is the IRS Offshore Voluntary Disclosure Program which is administered by the IRS for the purpose of allowing U.S. taxpayers with undeclared offshore assets and offshore income to voluntarily disclose these assets under a mitigated penalty. This means that, in reality, the OVDP “law” is simply a sub-area of international tax law and all “OVPD tax attorneys” are simply international tax attorneys who specialize in IRS OVDPs and are also knowledgeable in other relevant aspects of U.S. international tax law.

Nevertheless, the term Houston OVDP tax attorney is commonly used to describe an international tax attorney who helps his clients with the declaration of undisclosed foreign assets and foreign income.

The second and most important correction is that Houston OVDP tax attorney does not mean that the tax attorney should reside in Houston. OVDP is a federal tax program and can be practiced by an international tax attorney who is licensed in any of the 50 states of the United States. Hence, an international tax attorney who does offshore voluntary disclosures and helps his clients who reside in Houston, Texas, is automatically a Houston OVDP tax attorney.

This means that Houston OVDP tax attorney can actually reside in Minneapolis or any other city. Mr. Sherayzen of Sherayzen Law Office is an example of such a Houston OVDP tax attorney – he resides in Minneapolis but helps his clients throughout the world, including Houston, Texas.

We can now go back and answer my original question: who is considered to be Houston OVDP tax attorney? The answer is as follows: a Houston OVDP tax attorney is an international tax attorney who is licensed to practice in any of the 50 states of the United States, resides anywhere in the United States (Minneapolis, for example) or any other country, and helps his clients in Houston with OVDP disclosures.

Contact Sherayzen Law Office If You Are Looking for A Houston OVDP Tax Attorney

If you are looking for Houston OVDP tax attorney, you should contact Sherayzen Law Office, Ltd., an international tax law firm that specializes in offshore voluntary disclosures and helps its clients in Houston, Texas.

Our professional legal team is highly experienced in the OVDP disclosures; we have helped clients with every major IRS offshore voluntary disclosure program (2009 OVDP, 2011 OVDI, 2012 OVDP and the 2014 OVDP now closed), both types of Streamlined Disclosures (Streamlined Domestic Offshore Procedures and Streamlined Foreign Offshore Procedures), Delinquent International Information Return Submission Procedures and Delinquent FBAR Submission Procedures.

Contact Us Today to Schedule Your Confidential Consultation!

Offshore Voluntary Compliance Draws 100,000 Taxpayers and $10 Billion

OVDP is Still the King of Offshore Voluntary Compliance but Its Impact is More Targeted

Streamlined Procedures is the Favorite Offshore Voluntary Compliance Option for “Smaller” Taxpayers

Offshore Voluntary Compliance is One of he Key Strategies to Resolve Prior US International Tax Noncompliance

Contact Sherayzen Law Office to Secure Professional Help With Your Offshore Voluntary Compliance Case

Guilty Plea for Hiding Income from Undeclared Panamanian Bank Account

Facts of the Case: Undeclared Panamanian Bank Account

Consequences of Failure to Report US-Source Income and a Panamanian Bank Account

Lessons from this Case: How an Undeclared Panamanian Bank Account Led to Criminal Investigation

Contact Sherayzen Law Office for Legal Help if You Have an Undeclared Panamanian Bank Account

Hapoalim Prepares for Settlement with DOJ | FATCA Tax Attorney

Bergantino Case: Another Swiss Banker Pleads Guilty

The Bergantino Case Factual Background

The Bergantino Case Guilty Plea Comes After Three Wins and One Loss for the IRS

What the Bergantino Case Means to U.S. Taxpayers with Undeclared Offshore Accounts

Contact Sherayzen Law Office for Help with Undeclared Offshore Accounts

Houston OVDP Tax Attorney

Contact Sherayzen Law Office If You Are Looking for A Houston OVDP Tax Attorney

International Tax Law Websites

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Archive for category: offshore voluntary disclosure lawyers Minneapolis

OVDP is Still the King of Offshore Voluntary Compliance but Its Impact is More Targeted

Streamlined Procedures is the Favorite Offshore Voluntary Compliance Option for “Smaller” Taxpayers

Offshore Voluntary Compliance is One of he Key Strategies to Resolve Prior US International Tax Noncompliance

Contact Sherayzen Law Office to Secure Professional Help With Your Offshore Voluntary Compliance Case

Facts of the Case: Undeclared Panamanian Bank Account

Consequences of Failure to Report US-Source Income and a Panamanian Bank Account

Lessons from this Case: How an Undeclared Panamanian Bank Account Led to Criminal Investigation

Contact Sherayzen Law Office for Legal Help if You Have an Undeclared Panamanian Bank Account

The Bergantino Case Factual Background

The Bergantino Case Guilty Plea Comes After Three Wins and One Loss for the IRS

What the Bergantino Case Means to U.S. Taxpayers with Undeclared Offshore Accounts

Contact Sherayzen Law Office for Help with Undeclared Offshore Accounts

Contact Sherayzen Law Office If You Are Looking for A Houston OVDP Tax Attorney

International Tax Law Websites

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