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Mr. Sherayzen Completes Immigration and International Tax Law Seminar

On February 18, 2016, Mr. Sherayzen, in cooperation with two lawyers (an immigration lawyer and a business lawyer) completed another immigration and international tax law seminar “Foreign Investment in the United States: Key Immigration, Business and Tax Considerations”.

During this immigration and international tax law seminar, the immigration lawyer, Mr. Streff, covered a wide range of topics including investors visas, such as E-2 and EB-5, and alternative options for entrepreneurs, such as L-1 intracompany transferees, EB-1 and O-1 extraordinary ability, and National Interest Waivers’ through the Entrepreneurs Pathways initiative.

While immigration and international tax law issues were at the center of the seminar, a substantial part of the seminar was also devoted to business issues associated with various immigration options. The business lawyer, Mr. Vollmers, covered relevant business issues of appropriate entity formation, business plans, international business relationships, investment due diligence, and funds tracing.

Mr. Sherayzen’s presentation focused on the intersection of immigration and international tax law, especially U.S. tax residency classification, disclosure of foreign income and foreign assets, and foreign business ownership compliance requirements. U.S. tax residency is a concept completely different from U.S. permanent residence or “green card” and it occupies the center of any tax inquiry that involves immigration to the United States.

A lot of attention was given to tax compliance requirements with respect to another common intersection of immigration and international tax law issues – business ownership tax compliance issues associated with L-1 visa structures. In particular, Mr. Sherayzen discussed Forms 5471, 5472, 8865 and 8858 as well as PFIC and Subpart F antideferral regimes.

During the seminar, Mr. Sherayzen spent a substantial amount of time to one of the most important points of convergence of immigration and international tax law – reporting of foreign financial assets. Here, he explained the importance of FBAR and Form 8938, as well as FATCA.

Another part of Mr. Sherayzen’s presentation was devoted to the importance of pre-immigration tax planning. It is important for persons who plan to immigrate to the United States to contact a U.S. international tax attorney before they actually become U.S. persons. The international tax attorney should review their existing asset structure and advise on how this structure should be modified in order to avoid the various U.S. tax landmines and maximize favorable treatment under U.S. tax law. Special attention should be paid not only to income tax rules, but also estate and gift tax laws.

Mr. Sherayzen ended his presentation with the emphasis that immigration lawyers are at the forefront of international tax compliance, because they are usually the first to deal with persons who immigrate to the United States. Therefore, it is highly important for the immigration lawyers to be able to identify the most common junctions of immigration and international tax law issues and timely advise their clients to seek professional international tax help.

2015 Form 8938 and FBAR Currency Conversion Rates

Currency conversion is a critical part of preparing 2015 FBAR and Form 8938. This is why 2015 Form 8938 and FBAR Currency Conversion Rates are so important.

The 2015 Form 8938 and FBAR Currency Conversion Rates are the December 31, 2015 rates officially published by the U.S. Department of Treasury (they are called “Treasury’s Financial Management Service rates” or the “FMS rates”). Recently, the Treasury Department published the FMS rates for December 31, 2015.

The 2015 Form 8938 and FBAR Currency Conversion Rates also serve for other purposes beyond the preparation of the 2015 FBAR and Form 8938.

The instructions to both forms, the FBAR and Form 8938, require (in case of Form 8938, this is the default choice) to use the 2015 Form 8938 and FBAR Currency Conversion Rates published by the Treasury Department.

For this reason, the 2015 Form 8938 and FBAR Currency Conversion Rates are very important to international tax lawyers and international tax accountants. For your convenience, Sherayzen Law Office provides the table below of the official 2015 Form 8938 and FBAR Currency Conversion Rates (keep in mind, you still need to refer to the official website for any updates).

Country Currency Foreign Currency to $1.00
Afghanistan Afghani 67.9000
Albania Lek 125.5400
Algeria Dinar 106.8780
Angola Kwanza 145.0000
Antigua-Barbuda East Caribbean Dollar 2.7000
Argentina Peso 12.9460
Armenia Dram 484.0000
Australia Dollar 1.3680
Austria Euro 0.9190
Azerbaijan Manat 1.6200
Bahamas Dollar 1.0000
Bahrain Dinar 0.3770
Bangladesh Taka 79.0000
Barbados Dollar 2.0200
Belarus Ruble 18555.0000
Belgium Euro 0.9190
Belize Dollar 2.0000
Benin CFA Franc 602.7900
Bermuda Dollar 1.0000
Bolivia Boliviano 6.8600
Bosnia-Hercegovina Marka 1.7970
Botswana Pula 11.2360
Brazil Real 3.9590
Brunei Dollar 1.4160
Bulgaria Lev 1.7970
Burkina Faso CFA Franc 602.7900
Burma-Myanmar Kyat 1311.0000
Burundi Franc 1600.0000
Cambodia (Khmer) Riel 4103.0000
Cameroon CFA Franc 602.6800
Canada Dollar 1.3860
Cape Verde Escudo 101.2220
Cayman Islands Dollar 1.0000
Central African Republic CFA Franc 602.6800
Chad CFA Franc 602.6800
Chile Peso 709.9800
China Renminbi 6.4920
Colombia Peso 3169.2800
Comoros Franc 435.3000
Congo CFA Franc 602.6800
Congo, Dem. Rep Congolese Franc 920.0000
Costa Rica Colon 531.9400
Cote D’Ivoire CFA Franc 602.7900
Croatia Kuna 6.8200
Cuba Peso 1.0000
Cyprus Euro 0.9190
Czech Republic Koruna 24.2030
Denmark Krone 6.8560
Djibouti Franc 177.0000
Dominican Republic Peso 45.4000
Ecuador Dolares 1.0000
Egypt Pound 7.8300
El Salvador Dolares 1.0000
Equatorial Guinea CFA Franc 602.6800
Eritrea Nakfa 15.0000
Estonia Euro 0.9190
Ethiopia Birr 21.0700
Euro Zone Euro 0.9190
Fiji Dollar 2.1250
Finland Euro 0.9190
France Euro 0.9190
Gabon CFA Franc 602.6800
Gambia Dalasi 40.0000
Georgia Lari 2.4000
Germany FRG Euro 0.9190
Ghana Cedi 3.8200
Greece Euro 0.9190
Grenada East Carribean Dollar 2.7000
Guatemala Quentzel 7.6320
Guinea Franc 8004.0000
Guinea Bissau CFA Franc 602.7900
Guyana Dollar 202.0000
Haiti Gourde 56.5840
Honduras Lempira 22.3000
Hong Kong Dollar 7.7500
Hungary Forint 289.9800
Iceland Krona 129.6700
India Rupee 66.1000
Indonesia Rupiah 13550.0000
Iran Rial 29830.0000
Iraq Dinar 1166.0000
Ireland Euro 0.9190
Israel Shekel 3.8990
Italy Euro 0.9190
Jamaica Dollar 118.7000
Japan Yen 120.4200
Jerusalem Shekel 3.8990
Jordan Dinar 0.7080
Kazakhstan Tenge 339.5000
Kenya Shilling 102.2000
Korea Won 1175.9000
Kuwait Dinar 0.3030
Kyrgyzstan Som 75.5000
Laos Kip 8128.0000
Latvia Euro 0.9190
Lebanon Pound 1500.0000
Lesotho South African Rand 15.5560
Liberia Dollar 88.0000
Libya Dinar 1.3890
Lithuania Euro 0.9190
Luxembourg Euro 0.9190
Macao Mop 8.0000
Macedonia FYROM Denar 56.2900
Madagascar Aria 3196.0000
Malawi Kwacha 662.0000
Malaysia Ringgit 4.2900
Mali CFA Franc 602.7900
Malta Euro 0.9190
Marshall Islands Dollar 1.0000
Martinique Euro 0.9190
Mauritania Ouguiya 330.0000
Mauritius Rupee 35.8000
Mexico New Peso 17.3620
Micronesia Dollar 1.0000
Moldova Leu 19.6000
Mongolia Tugrik 1967.0500
Montenegro Euro 0.9190
Morocco Dirham 9.8740
Mozambique Metical 45.50000
Namibia Dollar 15.5560
Nepal Rupee 105.7500
Netherlands Euro 0.9190
Netherlands Antilles Guilder 1.7800
New Zealand Dollar 1.4610
Nicaragua Cordoba 27.8600
Niger CFA Franc 602.7900
Nigeria Naira 198.9000
Norway Krone 8.8290
Oman Rial 0.3850
Pakistan Rupee 104.7000
Palau Dollar 1.0000
Panama Balboa 1.0000
Papua New Guinea Kina 2.9410
Paraguay Guarani 5750.0000
Peru Nuevo Sol 3.3940
Philippines Peso 46.8360
Poland Zloty 3.9170
Portugal Euro 0.9190
Qatar Riyal 3.6410
Romania Leu 4.1540
Russia Ruble 73.7950
Rwanda Franc 742.3300
Sao Tome & Principe Dobras 22350.3086
Saudi Arabia Riyal 3.7500
Senegal CFA Franc 602.7900
Serbia Dinar 111.2500
Seychelles Rupee 13.0440
Sierra Leone Leone 5750.0000
Singapore Dollar 1.4160
Slovak Republic Euro 0.9190
Slovenia Euro 0.9190
Solomon Islands Dollar 8.0710
South Africa Rand 15.5560
South Sudananese Pound 18.5500
Spain Euro 0.9190
Sri Lanka Rupee 144.1500
St Lucia East Carribean Dollar 2.7000
Sudan Pound 6.6000
Suriname Guilder 4.0000
Swaziland Lilangeni 15.5560
Sweden Krona 8.4430
Switzerland Franc 0.9940
Syria Pound 219.6500
Taiwan Dollar 32.8740
Tajikistan Somoni 7.0000
Tanzania Shilling 2155.0000
Thailand Baht 36.0500
Timor-Leste Dili 1.0000
Togo CFA Franc 602.7900
Tonga Pa’anga 2.1270
Trinidad & Tobago Dollar 6.4040
Tunisia Dinar 2.0330
Turkey Lira 2.9180
Turkmenistan Manat 3.4910
Uganda Shilling 3378.0000
Ukraine Hryvnia 23.9520
United Arab Emirates Dirham 3.6730
United Kingdom Pound Sterling 0.6750
Uruguay New Peso 29.8900
Uzbekistan Som 2857.0000
Vanuatu Vatu 108.5500
Venezuela New Bolivar 6.3000
Vietnam Dong 22480.0000
Western Samoa Tala 2.5020
Yemen Rial 214.5000
Zambia Kwacha (New) 10.9900
Zambia Kwacha 5455.0000
Zimbabwe Dollar 1.0000

1. Lesotho’s loti is pegged to South African Rand 1:1 basis
2. Macao is also spelled Macau: currency is Macanese pataka
3. Macedonia: due to the conflict over name with Greece, the official name if FYROM – Former Yugoslav Republic of Macedonia.
4. Please, refer to the Treasury’s website for amendments regarding any reportable transactions in January, February, and March of 2015.

Higher OVDP Penalty Risk for US Taxpayers With Foreign Accounts

December of 2015 was one of the most successful months for the DOJ’s Swiss Bank Program as nearly a record number of banks signed non-prosecution agreements. This success for the DOJ means that more and more of non-compliant US taxpayers with foreign accounts are likely to deal with Higher OVDP Penalty with respect to their undisclosed foreign accounts.

DOJ’s Swiss Bank Program

The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (Program) was announced by the US Department of Justice on August 29, 2013. The Program was intended to achieve multiple goals, but there are four of them that are most important to the understanding of the Higher OVDP Penalty and the Program.

First, this was an “offer that one cannot refuse” for the Swiss banks– the Program was intended to “allow” (or force) Swiss banks to bring themselves into compliance with US tax laws. In exchange, the Swiss banks received a non-prosecution agreement that promised them protection from US legal enforcement actions.

Second, the Program was intended to obtain as much information as possible about non-compliant US taxpayers with foreign accounts.

The third important goal was to create an atmosphere of global enforcement that would make US voluntary disclosure the most rational choice for non-compliant US taxpayers with foreign accounts given the risk of IRS discovery of their undisclosed foreign accounts.

Fourth, the Program was intended to pave the way for easier acceptance of FATCA throughout the world by demonstrating what could potentially happen in any country that decides to resist the implementation of FATCA.

It must be stated that the Swiss Bank Program has been a spectacular success for the DOJ and the IRS. Both, the banks and non-compliant US taxpayers with foreign accounts flocked to the voluntary disclosure programs. Moreover, today, FATCA is the new global standard of international tax enforcement.

2014 OVDP

The current 2014 IRS Offshore Voluntary Disclosure Program is a modification of 2012 OVDP which, in turn, was the continuation of a series of prior IRS offshore voluntary disclosure programs (particularly 2011 OVDI). The 2014 OVDP is designed to help non-compliant US taxpayers with foreign accounts to bring their tax affairs into compliance with US tax laws.

2014 OVDP has a two-tier penalty system. The 50% penalty rate applies to US taxpayers with foreign accounts in the banks on the special IRS list. The 27.5% penalty rate applies to everyone else.

Influence of the Program on the OVDP

The Swiss Bank Program has a direct impact on the IRS Offshore Voluntary Disclosure Program because every Swiss Bank that signs a Non-Prosecution Agreement under the Program is automatically added to the 50% penalty list of foreign banks.

Thus, as more and more Swiss Banks reach an agreement with the DOJ under the Program, the list of 50% penalty banks keeps expanding and so does the list of US taxpayers with foreign accounts who may be subject to this higher penalty rate.

What Should Non-Compliant US Taxpayers With Foreign Accounts Do?

The growing risk of higher OVDP penalty means that non-compliant US taxpayers with foreign accounts should explore their voluntary disclosure options as soon as possible by contacting an experienced international tax lawyer.

It is a mistake to assume that 50% penalty list will grow only as a result of the Swiss Bank Program. Even today, the list already contains banks which are located outside of the United States (such as HSBC India and Israeli Bank Leumi). This means that any bank in almost any part of the world may tomorrow be on the 50% penalty list and US taxpayers with foreign accounts in this bank would be forced to pay a much higher penalty.

Contact Sherayzen Law Office for Professional Tax Help With The Voluntary Disclosure of Your Foreign Accounts

The growing risk of higher OVDP penalty means that you should contact the experienced international tax team of Sherayzen Law Office. International tax attorney and Founder of Sherayzen Law Office, Mr. Eugene Sherayzen, will personally analyze your case, estimate your IRS penalty exposure, determine your offshore voluntary disclosure options, and implement your customized voluntary disclosure plan to resolve your US tax problems.

Finter Bank Zurich AG Reaches Resolution with US DOJ

On May 15, 2015, Finter Bank Zurich AG (Finter Bank) became the third Swiss bank to sign a Non-Prosecution Agreement with US DOJ according to the terms of the DOJ Program for Swiss Banks.

DOJ Program for Swiss Banks

On August 29, 2013, the DOJ announced the creation of the “The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (Program)” with the goal or creating a voluntary disclosure program for Swiss banks. Under the Program, the Swiss banks would prove DOJ with detailed description of specified activities with respect to US-owned accounts as well as the identification of all accounts held by US persons at any point since August of 2008. In exchange, the Program promised Swiss banks an opportunity to forever resolve their past US non-compliance issues (including criminal illegal activities) with respect to US-held accounts. For Category 2 banks, the Program also imposed various penalty requirements. The banks already under criminal investigation related to their Swiss-banking activities and all individuals were expressly excluded from the program.

Finter Bank timely entered the Program and payed the required penalties. This is why it became the third Swiss bank to resolve its issues under the Program.

Finter Bank Background

Finter Bank was founded in 1958 in Chiasso, Switzerland, and has a branch office in Lugano, Switzerland. Since August 1, 2008, Finter Bank has maintained 283 U.S.-related accounts with an aggregate maximum balance of approximately $235 million.

Since its establishment and continuing through at least October 2011, Finter Bank, through its managers, employees and others, aided and assisted U.S. clients in opening and maintaining undeclared accounts in Switzerland and concealing the assets and income they held in these accounts from the Internal Revenue Service (IRS). After August 2008, when Swiss bank UBS AG publicly announced that it was the target of a criminal investigation by U.S. tax authorities, Finter Bank accepted accounts from U.S. persons exiting other Swiss banks.

Finter Bank provided services that allowed U.S. clients to eliminate the paper trail associated with the undeclared assets and income, including “hold mail” services and numbered and coded accounts. In addition, Finter Bank assisted clients in using sham entities as nominee beneficial owners of undeclared accounts, solicited Forms W-8BEN that falsely stated under penalties of perjury that the sham entities beneficially owned the assets in the undeclared accounts, and provided cash cards and credits cards linked to the undeclared accounts.

Finter Bank Non-Prosecution Agreement

According to the terms of the non-prosecution agreement signed on May 15, Finter Bank agreed to cooperate in any related criminal or civil proceedings, demonstrate its implementation of controls to stop misconduct involving undeclared U.S. accounts and pay a $5.414 million penalty in return for the department’s agreement not to prosecute Finter Bank for tax-related criminal offenses.

Consequences of Finter Bank Non-Prosecution Agreement for US Taxpayers

In resolving its criminal liabilities under the program, Finter Bank encouraged U.S. accountholders to come into tax compliance and participate in the IRS Offshore Voluntary Disclosure Program. However, the taxpayers who did not listen to Finter Bank’s pleas and have not disclosed their secret Swiss accounts now face an importance consequence as a result of Finter Bank Non-Prosecution Agreement – if these taxpayers wish to enter the OVDP now, the penalty percentage has increased from 27.5 percent to 50% of the highest balance of their accounts for the past eight years.

Contact Sherayzen Law Office for Help With Disclosure of Your Foreign Bank Accounts

If you have undisclosed foreign bank accounts and any other assets, you should contact Sherayzen Law Office for professional help as soon as possible. Our legal team consists of tax professionals who specialize in offshore voluntary disclosures and have helped hundreds of US taxpayers around the world.

We can help You! Contact Us to Schedule Your Confidential Consultation Now!