taxation law services

OVDP Lawyers Little Rock: Raiffeisen and Postfinance Join Program for Swiss Banks

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On December 13, 2013, two Swiss Banks, Raiffeisen and Postfinance, joined the growing number of Swiss Banks who announced their participation in the The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”) initiated by the U.S. Department of Justice (“DOJ”) on August 29, 2013 – an event long anticipated by many OVDP lawyers, including the OVDP lawyers Little Rock. These news further confirm the precarious situation of the U.S. taxpayers with undisclosed foreign accounts in Switzerland.

OVDP Lawyers Little Rock: The Program

The DOJ, in cooperation with the Swiss government, instituted the Program at the end of August of 2013. I already described the Program in detail in another article; for the purpose of the present writing, it is sufficient to state that the Program is essentially a voluntary disclosure program for Swiss Banks, not that dissimilar from the OVDP (the Offshore Voluntary Disclosure Program) currently available to U.S. taxpayers. Essentially, in return for turning over very detailed information about their cross-border operations and U.S. accountholders with accounts over $50,000 (going back to August 1, 2008), the banks receive either a Non-Prosecution Letter or a Non-Target Letter which basically promises that the U.S. government is not going to criminally prosecute or target the participating banks. As in the OVDP, the Program excludes banks currently under the DOJ investigation from participating in the Program. Another similar with the OVDP feature – category 2 banks will pay a hefty penalty.

OVDP Lawyers Little Rock: Why the Joining of Raiffeisen and PostFinance Significant

Size matters, and this why the cooperation of Raiffeisen and PostFinance is important. Raiffeisen is the third largest bank in Switzerlan. Postfinance, is the banking arm of the Swiss state-owned postal services company and the fifth-biggest retail financial institution in Switzerland.

OVDP Lawyers Little Rock: Growing Number of Swiss Banks Join the Program

A total of seven banks (among them: St. Galler Kantonalbank, Valiant Holding, Berner Kantonalbank and Vontobel Holding AG) have now come forward to say that they are participating in the Program. Most of them will participate as a Category 2 bank while the rest intend to participate as a Category 3 bank. PostFinance will be participating in the Program as a Category 2 bank, while Raiffeisen said that it is likely that it will register as a Category 3 bank (even though, the bank did not rule the possibility that some of the its U.S. clients may have been non-compliant with U.S. tax laws). It seems that Vontobel is the only other bank that adopted this position.

These seven banks, however, constitute but a tiny part of the total number of banks who are likely to participate in the Program. While the total number of banks varies, it is expected that about 100 banks are expected to enter the Program by December 31, 2013, deadline.

The DOJ strongly encourages Swiss Banks to participate in the Program and promises tough action with respect to non-participating Banks. “Banks that facilitated U.S. tax evasion but do not come forward by the December 31 deadline bear significant risks that information provided by others may cause the bank to be targeted and prosecuted,” said Assistant Attorney General Kathryn Keneally.

Side Effect on Category 1 Banks

The Program has had a peculiar side effect on the Category 1 banks who are not eligible to participate in the Program (e.g. UBS, Credit Suisse, Julius Baer, et cetera). The cases of these banks have been frozen by the DOJ pending the resolution of the Program in the wider Swiss banking sector.

As some OVDP Lawyers Little Rock may predict, the number of banks that participate in the Program will likely affect the DOJ’s attitude toward the other banks.

Direct Effect of the Program: Non-Compliant US Taxpayers Should Consider Voluntary Disclosure NOW

The effect of the Program on US Taxpayers with undisclosed Swiss accounts is very direct and severe. They are quickly running out of options. If they do not consider their voluntary disclosure options at this point, they may lose the ability to participate in the IRS Offshore Voluntary Disclosure Program (“OVDP”).

Contact Sherayzen Law Office for Help with the Voluntary Disclosure of Your Swiss Financial Accounts

Given the time limitations, it is extremely important that you contact Sherayzen Law Office as soon as possible. Owner Eugene Sherayzen, an experienced offshore voluntary disclosure attorney will thoroughly analyze your case, identify the available voluntary disclosure options, prepare your voluntary disclosure package and negotiate the Closing Agreement with the IRS (for the OVDP cases).

2014 First Quarter Underpayment and Overpayment Interest Rates

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On December 9, 2013, the IRS announced that the underpayment and overpayment interest rates will remain the same for the calendar quarter beginning January 1, 2014. The rates will be:

  • three (3) percent for overpayments [two (2) percent in the case of a corporation];
  • three (3) percent for underpayments;
  • five (5) percent for large corporate underpayments; and
  • one-half (0.5) 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 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.

Interest factors for daily compound interest for annual rates of 0.5 percent are published in Appendix A of Revenue Ruling 2011-32. Interest factors for daily compound interest for annual rates of 2 percent, 3 percent and 5 percent are published in Tables 7, 9, 11, and 15 of Rev. Proc. 95-17, 1995-1 C.B. 561, 563, 565, and 569.

Does Location Matter? Retaining Orlando International Tax Attorney

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Retaining an international tax attorney is a very important decision. One of the frequent issues that my clients in Florida face is whether it is better to retain an international tax attorney in Orlando or in Minneapolis if you live in Orlando, Florida? If you were to search “Orlando international tax attorney”, Sherayzen Law Office, Ltd. (which is based in Minneapolis) is likely to come out on the first page together with other international tax attorneys in Orlando. The question is: should the geographical proximity of an international tax attorney play a role in the retainer decision?

The answer is “NO”! Obviously, in a case that involves a local matter, such as Florida sales tax issues, you may not have a choice but to find a local attorney. This is because local law and procedure would govern in this case, and an attorney familiar with local sales tax issues would be the best choice for handling a sales tax case. Of course, even in this case, there are exceptions because, sometimes, the unique qualities of an outside attorney are so desirable by the client that the court may accede in temporarily admitting this outside lawyer to practice just for one case.

However, if you are searching for an Orlando international tax attorney because you have undeclared offshore accounts, then the knowledge of local law and procedure are likely to be of very little value. Instead, the experience and knowledge of an attorney in his area of offshore voluntary disclosures will become the most important factors in retaining an international tax attorney.

What if you have an international tax lawyer in Orlando, do you still want to consider an attorney in Minneapolis? The answer is “yes” – for two reasons. First, international tax attorneys differ in their natural ability to identify problems and find solutions, creativity, advocacy and many other factors. Therefore, there is no reason to stay away from a better international tax attorney in Minneapolis even if there is a lawyer in Orlando. Sherayzen Law Office provides professional legal expertise in international tax law that may be more helpful to you than a local attorney in Orlando.

Second, in addition to differences in personal qualities, the experience of the international tax attorney in the area of offshore voluntary disclosures and the ability to analyze the specific subject matter of the undisclosed accounts in the broader context of the voluntary disclosure (including potential strategies that may become available due to client’s specific facts) are very important factors in retaining the attorney and should override the attorney’s particular geography.

One of the most unique features about Sherayzen Law Office is that we can handle the entire case internally – both, the legal and the accounting sides of it. Most Orlando international tax attorneys in this area of law do not do that and rely on the outside accountant to provide such additional services. The outsourcing approach has various disadvantages, including potential leak of information, lack of close coordination between both sides of the case, increased possibility of missed opportunities and absence of the unity of goal among the professionals who are preoccupied with their respective areas only. The unique business model adopted by Sherayzen Law Office is aimed to reduce and eliminate such problems.

So, the next time you search for a Orlando international tax attorney, keep these issues in mind while retaining an attorney from Minneapolis or any other city.

Contact Sherayzen Law Office for Help With International Tax Issues

If you have any international tax issues with respect to undeclared foreign financial accounts or international tax compliance in general, please contact Sherayzen Law Office for comprehensive legal and tax help.

Retaining Savannah International Tax Attorney: Location Choice

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One of the important issues that US taxpayers with undisclosed foreign accounts face is whether it is better to retain an international tax attorney in Savannah or in Minneapolis if you live in Savannah, Georgia? If you were to search “Savannah international tax attorney”, Sherayzen Law Office, Ltd. (which is based in Minneapolis) is likely to come out on the first page together with other international tax attorneys in Savannah. The question is: should the geographical proximity of an attorney play a role in the retainer decision?

The answer depends on many factors. On the one hand, if you are looking for a sales tax attorney, then you may not have a choice but to find a local attorney. This is because local law and procedure would govern in this case, and an attorney familiar with local sales tax issues would be the best choice for handling a sales tax case. Of course, even in this case, there are exceptions because, sometimes, the unique qualities of an outside attorney are so desirable by the client that the court may accede in temporarily admitting this outside lawyer to practice just for one case.

One the other end of the spectrum, if you are searching for a Savannah international tax attorney because you have undeclared offshore accounts, then the knowledge of local law and procedure are likely to be of very little value. Instead, the experience and knowledge of an attorney in his area of offshore voluntary disclosures will become the most important factors in retaining an international tax attorney.

What if you have an international tax lawyer in Savannah, do you still want to consider an attorney in Minneapolis? The answer is “yes” – for two reasons. First, international tax attorneys differ in their natural ability to identify problems and find solutions, creativity, advocacy and many other factors. Therefore, there is no reason to stay away from a better international tax attorney in Minneapolis even if there is a lawyer in Savannah.

Second, in addition to differences in personal qualities, the experience of the international tax attorney in the area of offshore voluntary disclosures and the ability to analyze the specific subject matter of the undisclosed accounts in the broader context of the voluntary disclosure (including potential strategies that may become available due to client’s specific facts) are very important factors in retaining the attorney and should override the attorney’s particular geography.

What is a fairly unique feature about Sherayzen Law Office is that we can handle the entire case internally – both, the legal and the accounting sides of it. Most Savannah international tax attorneys in this area of law do not do that and rely on the outside accountant to provide such additional services. The outsourcing approach has various disadvantages, including potential leak of information, lack of close coordination between both sides of the case, increased possibility of missed opportunities and absence of the unity of goal among the professionals who are preoccupied with their respective areas only. The approach adopted by Sherayzen Law Office is aimed to reduce and eliminate such problems.

So, the next time you search for a Savannah international tax attorney, keep these issues in mind while retaining an attorney from Minneapolis or any other city.

Contact Sherayzen Law Office for Help With International Tax Issues

If you have any international tax issues with respect to undeclared foreign financial accounts or international tax compliance in general, contact Sherayzen Law Office for comprehensive legal and tax help.

2014 Individual Income Tax Rates

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The IRS recently announced the 2014 individual income tax rates with inflation adjustments wit respect to each tax bracket. Remember, since the American Taxpayer Relief Act of 2012 was signed into law on January 2, 2013, a new tax bracket of 39.4% appeared. Also, note that the 2014 individual income tax rates listed below do not include other taxes such as those imposed on investment income by the new health care laws. Finally, it is important to remember that the default PFIC regime calculations do not depend on your personal tax rate.

As adjusted for inflation, the following marginal income tax rates will apply to individuals in the tax year 2014:

Filing Single

10% $0 – $9,075
15% $9,076 – $36,900
25% $36,901 – $89,350
28% $89,351 – $186,350
33% $186,351 – $405,100
35% $405,101 – $406,750
39.6% $406,751 and greater

Notice the small range of the 35% tax bracket.

Filing Married Filing Jointly and Surviving Spouses

10% $0 – $18,150
15% $18,151 – $73,800
25% $73,801 – $148,850
28% $148,851 – $226,850
33% $226,851 – $405,100
35% $405,101 – $457,600
39.6% $457,601 and greater

Filing Married Filing Separately

10% $0 – $9,075
15% $9,076 – $36,900
25% $36,901 – $74,425
28% $74,426 – $113,425
33% $113,426– $202,550
35% $202,551 – $228,800
39.6% $228,801 and greater

Filing Head of Household

10% $0 – $12,950
15% $12,951 – $49,400
25% $49,401 – $127,550
28% $127,551 – $206,600
33% $206,601 – $405,100
35% $405,101 – $432,200
39.6% $432,201 and greater