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Boston FBAR Attorney | International Tax Lawyer Massachusetts

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If you reside in Boston, Massachusetts, and you have unreported foreign bank and financial accounts, you may be looking for Boston FBAR Attorney. In your search, please consider Mr. Eugene Sherayzen of Sherayzen Law Office, Ltd. (“Sherayzen Law Office”). Let’s understand why this is the case.

Boston FBAR Attorney: International Tax Lawyer

First of all, it is very important to understand that, by looking for Boston FBAR attorney, in reality, you are searching for an international tax lawyer who specializes in FBAR compliance.

The reason for this conclusion is the fact that FBAR enforcement belongs to a very special field of US tax law – US international tax law. FBAR is an information return concerning foreign assets, which necessarily involves US international tax compliance concerning foreign assets/foreign income. Moreover, ever since the FBAR enforcement was turned over to the IRS in 2001, the term FBAR attorney applies almost exclusively to tax attorneys.

Hence, when you look for an FBAR attorney, you are looking for an international tax attorney with a specialty in FBAR compliance.

Boston FBAR Attorney: Broad Scope of Compliance and Offshore Voluntary Disclosures

When retaining Boston FBAR attorney, consider the fact that such an attorney’s work is not limited only to the preparation and filing of FBARs. Rather, the attorney should be able to deliver a variety of tax services and freely operate with experience and knowledge in all relevant areas of US international tax law, including the various offshore voluntary disclosure options concerning delinquent FBARs.

Moreover, as part of an offshore voluntary disclosure, an FBAR Attorney often needs to amend US tax returns, properly prepare foreign financial statements according to US GAAP, correctly calculate PFICs, and complete an innumerable number of other tasks.

Mr. Sherayzen and his team of motivated experienced tax professionals of Sherayzen Law Office have helped hundreds of US taxpayers worldwide to bring their tax affairs into full compliance with US tax laws. This work included the preparation and filing of offshore voluntary disclosures concerning delinquent FBARs. Sherayzen Law Office offers help with all kinds of offshore voluntary disclosure options, including: SDOP (Streamlined Domestic Offshore Procedures), SFOP (Streamlined Foreign Offshore Procedures), DFSP (Delinquent FBAR Submission Procedures), DIIRSP (Delinquent International Information Return Submission Procedures), IRS VDP (IRS Voluntary Disclosure Practice) and Reasonable Cause disclosures.

Boston FBAR Attorney: Out-Of-State International Tax Lawyer

Whenever you are looking for an attorney who specializes in US international tax law (which is a federal area of law, not a state one), you do not need to limit yourself to lawyers who reside in Boston, Massachusetts. On the contrary, consider international tax attorneys who reside in other states and help Boston residents with their FBAR compliance.

Contact Sherayzen Law Office for Professional FBAR Help

Sherayzen Law Office is an international tax law firm that specializes in US international tax compliance, including FBARs. While our office is in Minneapolis, Minnesota, we help taxpayers who reside throughout the United States, including Boston, Massachusetts.

Thus, if you are looking for a Boston FBAR Attorney, contact Mr. Sherayzen as soon as possible to schedule Your Confidential Consultation!

Usefulness of FBARs for the IRS and DOJ | International Tax Law Firm

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The usefulness of FBARs for the U.S. tax enforcement agencies may seem to be an odd issue, but, in reality, it concerns every taxpayer with foreign bank and financial accounts. Why the FBAR is important and how the IRS and the U.S. Department of Justice (“DOJ”) utilize it in their prosecution tactics is the subject of this essay.

Two Periods of the Usefulness of FBARs

In describing the usefulness of FBARs, one can distinguish two distinct periods of time. The first period lasted from the time FBAR came into existence in the 1970s through most of the year 2001. It is definitely a simplification to place this entire period of time into one category, but this simplification is intentional in order to contrast this first period of usefulness of FBARs with the second one.

The second period commenced right after the FBAR enforcement function was turned over to the IRS in 2001 and it continues through the present time. In this period of time, the usefulness of FBARs was expanded to a completely different level. It is important to point out, however, that it has not lost its original usefulness that dominated the first period of time of its existence.

Usefulness of FBARs Prior to 2001

Prior to 2001, the main purpose of FBAR had been the enforcement leverage in prosecution of financial crimes. This leverage came from the draconian FBAR penalties which often would offer a worse outcome than the statute associated with a criminal activity (especially after a plea deal). Moreover, it was much easier for prosecutors to establish an FBAR violation (any failure to report a foreign account on the FBAR would do) than to prove specific criminal activity.

The usage of FBAR prosecutions was particularly useful in money laundering cases where it was difficult to prove specified unlawful activities and certain criminal tax cases where it was difficult to establish the receipt of illicit income. In such criminal cases, instead of charging criminals solely with tax evasion or money laundering activities, the prosecutors would opt for charging the criminals with a (willful and/or criminal) failure to file an FBAR that occurred while the defendants engaged in a criminal activity. It was easier to get a plea deal this way, because, obviously, criminals would not report the foreign accounts used in a criminal activity on FBARs.

Why was the usefulness of FBARs limited to being an enforcement leverage; in other words, why were FBARs not used for collection of data? After all, FBAR was born out of the Bank Secrecy Act and its stated purpose was to collect data with respect to foreign bank and financial accounts owed by US persons.

The answer is fairly simple – there was no third-party verification mechanism for the data submitted on FBARs. In other words, the FBAR reporting was completely dependent on honest self-reporting (in fact, this is one of the reasons for the creation of FATCA) and, unless, an investigation was conducted with respect to a specific individual, there was no direct way for FinCEN to corroborate the information submitted on FBARs.

It is important to emphasize that, in this first period of its existence, the usefulness of FBARs was primarily non-tax in nature. It was not until after September 11, 2001, that FBAR commenced to acquire a new level of usefulness with which we are familiar today.

Usefulness of FBARs After 2001

The usefulness of FBARs underwent a tremendous change after the September 11, 2001 terrorist attacks in the United States. Soon after the 9/11 attacks, the enforcement of FBARs was taken away from FinCEN and given to the IRS.

The IRS decided to shift the scope of the usefulness of FBARs from financial crimes to tax evasion. The Congress wholeheartedly agreed and further expanded the already-severe FBAR penalties in the American Jobs Creation Act of 2004 to their current draconian state. From that point on, FBAR became the top international tax compliance enforcement mechanism for the IRS.

The potential FBAR penalties were so extreme that even non-willful taxpayers preferred to enter the IRS Offshore Voluntary Disclosure Program (and, later, Streamlined Compliance Procedures) and pay the appropriate Offshore Penalties rather than to directly confront the potential consequences of FBAR noncompliance. In other words, the usefulness of FBARs expanded further to indirect tax enforcement.

Furthermore, the UBS case victory in 2008 and the enaction of FATCA in 2010 meant that the IRS could now obtain FBAR-required information from third parties (foreign financial institutions) and verify a taxpayer’s compliance with the FBAR requirements. This further reinforced the FBARs already dominant position in US international tax compliance.

This FBARs dominance in the tax enforcement with respect to foreign accounts continues even today despite the appearance of a rival – Form 8938 (born out of FATCA). While Form 8938 has a broader scope of reportable assets, its penalty structure is highly inferior to the terrifying FBAR penalties.

Contact Sherayzen Law Office for Help with FBAR Compliance

If you have foreign bank and financial accounts that were not disclosed on FBARs as required, you should contact Sherayzen Law Office, Ltd. as soon as possible. Sherayzen Law Office is an experienced international tax law firm that has helped hundreds of US taxpayers with their delinquent FBARs, and we can help you!

Contact Us Today to Schedule Your Confidential Consultation!

Foreign Life Insurance Policies – FBAR Reporting

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Foreign Life Insurance Policies are very popular around the world, especially in India, Germany and France (Assurance Vie accounts). Yet, very few U.S. taxpayers (especially H-1B holders and U.S. permanent residents) are aware of the fact that these policies may be subject to numerous and complex IRS tax reporting requirements in the United States. In this article, I would like to generally discuss the FBAR requirements applicable to foreign life insurance policies.

I will not be discussing here the requirements for a qualified foreign life insurance policy, because it is mostly irrelevant since the great majority of foreign life insurance policies would not be qualified policies.

Types of Foreign Life Insurance Policies

Before we start exploring which foreign life insurance policies (also known as Life Assurance Policies) are subject to the FBAR requirement, it is important to distinguish three general categories of foreign life insurance policies.

In the order of rising complexity, the first category of foreign life insurance policies consists of simple, straightforward life insurance policies with no cash surrender value, no income payments and no income accumulations. The taxpayer simply makes the required premium payments and he expects a fixed-amount payout at death.

The second category of foreign life insurance policies has a cash-surrender value, but no income. The taxpayer pays a premium and expects a certain payout when the policy is surrendered or matures. The cash surrender value grows over time mostly through premiums and bonuses which would be paid out when the policy is surrendered. There is also a potential death benefit.

Finally, the third category of foreign life insurance policies has a cash-surrender value with investments and/or income. There is a large variety of investment life insurance policies. The most common arrangement, though, is where the taxpayer pays a relatively large initial premium which is invested in foreign mutual funds; the growth in mutual funds will usually determine the cash-surrender value. Oftentimes, the cash-surrender value in these policies is tax-free if certain requirements are met (for example, Assurance Vie policies in France or certain life insurance policies in India).

In some cases (for example, in Malaysia), an investment foreign health insurance policy may be tied into a life insurance policy.

FBAR – FinCEN Form 114

FinCEN Form 114 – Report of Foreign Bank and Financial Accounts (commonly known as FBAR) is the most important US tax information return. FBAR must be filed by a US tax resident if the aggregate value of foreign financial accounts (in which this US person has financial interest and/or over which this US person has signatory authority) exceeds $10,000 at any time during the calendar year. The 2015 FBAR must be received by the IRS by June 30, 2016 without any extension possible; however, starting the reporting for the calendar year 2016 (i.e. 2016 FBAR) the FBARs are due on April 15 with an extension possible.

The importance of FBAR stems from the draconian FBAR penalties. Unlike many other information returns, FBAR imposes penalty not only on the willful non-filing, but also on the non-willful failure to file the FBAR. The willful FBAR penalties range from criminal penalties with up to 5 years in prison to up to $100,000 penalty per account per year. The FBAR statute of limitations is six years, which means that up to six years maybe subject to a penalty (though, usually it would be 2-4 years).

Foreign Life Insurance Policies and FBAR Reporting

Foreign life insurance policies must be reported on the FBAR if they have a cash-surrender value. Therefore, foreign life insurance policies that fall into categories two and three described above are always reportable. Investment foreign life insurance policies promoted by national governments (such as Assurance Vie accounts in France) are reportable even if they are considered to be held by a foreign trust (such as Superannuation Accounts in Australia).

The first category of foreign life insurance policies I listed above (i.e. life insurance policies without any cash-surrender value) are not likely to be reportable, but there are exceptions.

The determination of whether your foreign life insurance policies are reportable on the FBAR should be made by an international tax attorney; I strongly discourage any attempt by US taxpayers to make this determination without legal assistance.

Foreign Life Insurance Policies and Other Reporting Requirements

It is important to note that other US reporting requirements may apply to foreign life insurance policies. Examples include FATCA Form 8938, PFIC compliance, foreign trust reporting, et cetera.

Contact Sherayzen Law Office for Help With Foreign Life Insurance Policies

If you have foreign life insurance policies, contact Sherayzen Law Office for assistance as soon as possible. Foreign life insurance policies can be extremely complex and the US reporting requirements associated with them vary from country to country. Sherayzen Law Office has accumulated tremendous experience in dealing with foreign life insurance policies from Australia, Canada, New Zealand, Europe and Asia. We can help You!

Contact Us Today to Schedule Your Confidential Consultation!

IRS Increases Criminal Prosecutions for Willful Failure to File FBARs: U.S. v. Jacques Wajsfelner

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In U.S. v. Jacques Wajsfelner, the IRS’s criminal prosecution of the defendant for willful failure to file FBARs was completed when the defendant, Mr. Jacques Wajsfelner, decided to plead guilty. Mr. Wajsfelner pled guilty to willful failure to file the FBAR in Manhattan federal court and he now faces civil penalties of $2.84 million and restitution of $419,940. Under advisory guidelines, he faces 30 months to 37 months in prison at sentencing scheduled for December 20, 2012.

Basic Facts

Mr. Wajsfelner, an 83-year old Holocaust survivor, fled the Nazis as a teenager and became a U.S. citizen, working in real estate and advertisement in New York and Boston. He admitted that he held an account in his own name at Credit Suisse in 1995. In 2006, his advisor helped him open an account in the name of Ample Lion Ltd. At the end of 2007, the account held almost $5.7 million. In 2008, as Credit Suisse started to wind down its U.S. cross-border banking business, Mr. Wajsfelner opened an account with Wegelin and transferred the money from Credit Suisse to the new account. In the later years, the value on this account went down to only $4 million.

In addition to moving money among two accounts, Mr. Wajsfelner also made a huge error of not telling the truth to the IRS about the account, Ample Lion Ltd. (A Hong Kong corporation), and his advisor (Beda Singenberger’s corporation Sinco Treuhand AG) during an interview conducted by the IRS after the investigation commenced. As part of his plea agreement, the IRS agreed not to prosecute him for these statements.

In the end, Mr. Wajsfelner plead guilty to knowing and willful failure to file the FBARs from 2006 through 2011 with the IRS.

Additional Considerations

It is possible that the misleading and untruthful statements to the IRS alone may have been the cause for Mr. Wajsfelner to plead guilty. However, there was another highly unfavorable fact – moving the money between the accounts would have been considered as circumstantial evidence of conspiracy to conceal the money from U.S. government. Also, Mr. Wajsfelner maintained very close contact with the account and directed various transactions to and from the accounts.

Another important consideration is to understand that this is a case of pure willful failure to file the FBARs; there was no associated pleading with respect to tax evasion. This is a very important because it shows that the IRS is willing to prosecute FBAR cases criminally even without tax evasion charges.

US v. Jacques Wajsfelner is Part of a Wave of Prosecutions

U.S. v. Jacques Wajsfelner is not an isolated case or limited only to specific facts of Mr. Wajsfelner.

In addition to Mr. Wajsfelner, the IRS also indicted his former Swiss adviser, Beda Singenberger, on a charge of conspiring to help more than 60 U.S. taxpayers hide $184 million from the Internal Revenue Service in offshore accounts. Wegelin, the 270-year-old Swiss bank, was also indicted February 2, 2012, on charges of helping U.S. taxpayers hide money from the IRS. Also, Credit Suisse said in July of 2011 that it was a target of a U.S. criminal probe. On July 21, 2011, seven of Credit Suisse’s bankers were indicted on charges of helping U.S. clients evade taxes through secret accounts.

In fact, since 2009, U.S. prosecutors have criminally charged about fifty U.S. taxpayers and more than twenty offshore bankers, lawyers and advisers.

FBAR Criminal Prosecutions Will Increase Due to Voluntary Disclosure Programs

It is critically important for non-compliant U.S. taxpayers to understand that, instead of subsiding, this wave of IRS criminal prosecutions regarding the FBARs will only increase.

The primary reason for this growth of FBAR prosecutions are the voluntary disclosure programs, like 2009 OVDP, 2011 OVDI AND 2012 OVDP (now closed). For many years now, the IRS has been collecting detailed information from the participating taxpayers regarding their advisors, banks and other U.S. taxpayers. This mountain of information allows the IRS to identify high-risk banks, advisors as well as specific taxpayers who are likely to be non-compliant with U.S. tax rules. The end-product of this analysis are targeted investigation and, ultimately, criminal prosecutions of non-compliant U.S. taxpayers and their advisors.

Contact Sherayzen Law Office for Legal Help With FBARs

If you have undisclosed foreign financial accounts that should have been reported to the IRS, contact Sherayzen Law Office as soon as possible. Our experienced tax firm will analyze the facts of your case, identify you potential FBAR liability and propose a specific course of action to deal with your specific situation. Sherayzen Law Office will guide you though your entire voluntary disclosure, including the preparation of all of the necessary tax documents and rigorous IRS representation.

FBAR: Reporting Foreign PayPal Accounts

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Whether an account is reportable for FBAR purposes can sometimes be a relatively complicated question. It is true that it is easy to see that foreign bank and investment accounts should be reported on the FBAR as long as all other requirements are met. It is also well-established that a gold bullion account is reportable for FBAR purposes.

What about foreign PayPal accounts? This question has arisen in the past with some of my clients. On the other one hand, PayPal describes itself as a payment system; on the other hand, the account holder does own the funds within the account – i.e. the account holder has a present-interest value on the account that can be easily withdrawn from the account.

This is why the IRS considers a foreign PayPal account as a reportable account for the FBAR purposes. In fact, whenever I asked the IRS this question with respect to my clients, this determination has been confirmed by the IRS.

Contact Sherayzen Law Office For Help With FBAR Issues

If you have any questions with respect to the FBAR, you want to find out whether you have reportable accounts, or you wish to file your delinquent FBARs and you do not know how to approach it correctly, contact Sherayzen Law Office for legal assistance. Our experienced FBAR tax firm will help you deal with all of your FBAR issues in a professional, efficient, and effective manner.