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November 21 2019 BSU Seminar in Minsk, Belarus | International Tax News

On November 21, 2019, Mr. Eugene Sherayzen, an international tax attorney and founder of Sherayzen Law Office, Ltd., conducted a seminar at the Belarusian State University Law School (the “2019 BSU Seminar”) in Minsk, Belarus. Let’s explore the 2019 BSU Seminar in more detail.

2019 BSU Seminar

2019 BSU Seminar: Topic and Attendance

The topic of the seminar was “Unique Aspects of the US International Tax System”. The seminar was well-attended (more than 80 attendees) by the students of the Belarusian State University (“BSU”), BSU law school faculty and attorneys from the Minsk City Bar Association.

The seminar with the follow-up Q&A session lasted close to two and a half hours.

2019 BSU Seminar Part I: Mr. Sherayzen Biography As Illustration of a Successful Career of an International Tax Attorney

The first part of the seminar was devoted to the discussion of Mr. Sherayzen’s legal career. He commenced by describing his educational path: a bachelor’s degree in Political Science, History and Global Studies with Summa Cum Laude honors and a Juris Doctor degree in Law with Cum Laude honors from the University of Minnesota Law School. Then, Mr. Sherayzen discussed how he acquired the passion for US international tax law, founded Sherayzen Law Office at the end of the year 2005 and developed his career as a successful international tax attorney.

At that point, Mr. Sherayzen described his main specialities in US international tax law: (1) offshore voluntary disclosure of foreign assets and foreign income; (2) IRS international tax audits; (3) US tax compliance concerning foreign gifts and foreign inheritance; (4) US tax compliance concerning US information returns, including FBAR and FATCA compliance; and (5) US international tax planning.

2019 BSU Seminar Part II: Discussion of Eight Unique Characteristics of the US International Tax Law

The second pat of the seminar was devoted to the long discussion of eight main unique characteristics of US international tax law. Mr. Sherayzen commenced this part with the concept of “Voluntary Compliance” and its significance for a taxpayer’s personal liability for the accuracy of his IRS submissions. Then, the attorney discussed the enormous complexity and extremely invasive nature of US international tax law. Mr. Sherayzen also separately emphasized the potentially huge penalty exposure as the fourth characteristic of the US international tax law, specifically referring to FBAR penalties.

The attorney continued the discussion with the description of the worldwide reach of the US tax jurisdiction. Here, he used the Foreign Account Tax Compliance Act (“FATCA”) as an example.

Then, Mr. Sherayzen described the obscurity that surrounds many US international tax provisions and explained how such obscurity presents problems and opportunities for US taxpayers. The attorney concluded the second part of the 2019 BSU seminar with the discussion of the flexibility of US international tax system and how the US tax system should be considered a source of endless opportunities to knowledgeable US international tax attorneys and their clients.

2019 BSU Seminar Part III: Basic Unique Principles of US International Tax System

The next part of the seminar focused on the basic principles of the US international tax system. Mr. Sherayzen organized this part from the perspective of how US taxpayers should declare their foreign assets and taxable income. The structure of this part was based on answering three questions: “who”, “what” and “when”.

The first question was: who should declare their foreign assets and pay taxes on their income? In this context, Mr. Sherayzen defined the concept of “US tax residency”. He further emphasized that non-resident aliens who are not US tax residents may still need to file non-resident US tax returns with the IRS.

The next question was: what income is subject to US taxation and what assets should be declared to the IRS? Here, Mr. Sherayzen describes the most fundamental principle of US international tax law that applies to US tax residents – the worldwide income taxation requirement. He also emphasized that US tax residents must declare on their US international information returns virtually all classes of their foreign assets with the exception of directly-owned real estate.

Then, as part of his discussion of US tax responsibilities of non-residents (for tax purposes), the attorney introduced the “source of income” rules used to characterize income as US-source income or foreign-source income. He provided the audience with the basic rules concerning sourcing of bank interest, dividends, earned income, rental income and royalties.

The final question was: when should the tax be paid on income? In this context, Mr. Sherayzen explained the concept of “realized income” and the general principle that income becomes taxable when it is realized for US tax purposes. He also described the anti-deferral regimes and the Section 250 full participation exemption as exceptions to the general principle of income recognition.

2019 BSU Seminar Part IV: International Information Returns and Conclusion

During the final part of the seminar, Mr. Sherayzen briefly discussed the most important US international information returns. He concluded his lecture by re-stating that US international tax provisions reflect the reality of US position in the world economy and other countries should understand this basic fact before they attempt to copy any US international tax provisions.

US Taxpayers with Lombard Odier Bank Accounts At Risk | OVDP News

On July 31, 2018, the US Department of Justice (“DOJ”) announced that it signed an Addendum to a non-prosecution agreement with Bank Lombard Odier & Co., Ltd. (“Lombard Odier). The Addendum requires Lombard Odier to disclose additional 88 accounts; in other words, US taxpayers who own these additional Lombard Odier bank accounts are now at a high risk of a criminal prosecution by the IRS.

Lombard Odier Bank Accounts: Background Information on the Swiss Bank Program and Original Non-Prosecution Agreement

The new Addendum to the non-prosecution agreement was signed by Lombard Odier as part of the Swiss Bank Program that was created by the DOJ on August 29, 2013. The Swiss Bank Program is basically a voluntary disclosure program for Swiss banks, which allows the banks to avoid potential criminal prosecution for helping US taxpayers evade US tax laws (the so-called Category 2 banks). As part of their voluntary disclosure, the participating banks were required, among other things, to provide all of the required information concerning bank accounts owned (directly or indirectly) by US taxpayers. The information was provided on an account-by-account basis, rather than per taxpayer.

Overall, the DOJ executed non-prosecution agreements with 80 banks between March of 2015 and January of 2016, collecting $1.36 billion in penalties. Lombard Odier signed the original non-prosecution agreement on December 31, 2015, and paid $99 million in penalties.

Addendum to the Original Agreement Concerning Additional 88 Lombard Odier Bank Accounts

It appears that, when the original non-prosecution agreement was signed, Lombard Odier failed to account for certain additional accounts owned by US persons. The bank later realized its mistake and disclosed it to the DOJ.

As a result of this disclosure, the July 31, 2018 Addendum to the original non-prosecution agreement was signed. Under the Addendum, Lombard Odier will pay the additional sum of $5,300,000 and disclose 88 additional Lombard Odier bank accounts owned by US persons.

Impact of the Addendum on US Taxpayers With Undisclosed Lombard Odier Bank Accounts

The Addendum means that the IRS now has knowledge of additional 88 Lombard Odier bank accounts that were not previously disclosed. US owners of these accounts are now at a risk of willful FBAR penalties and potential criminal prosecution if they have not yet entered into an IRS voluntary disclosure program. A quiet disclosure of these accounts will not suffice to protect these taxpayers against the IRS criminal prosecution.

Contact Sherayzen Law Office for Help With the Disclosure of Your Lombard Odier Bank Accounts and Any Other Foreign Bank Accounts

If you are the owner of any of the 88 Lombard Odier bank account or if you have other undisclosed foreign bank accounts, contact the experienced legal team of Sherayzen Law Office. We have helped hundreds of US taxpayers around the world to bring their undisclosed foreign assets, including foreign bank and financial accounts, into full compliance with the US tax laws. We can help You!

Contact Us Today to Schedule Your Confidential Consultation!