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Fort Lauderdale Tax Law Blog

FATCA's ripple continues to wash over Americans overseas

Back on Independence Day of this year, we posted about the effects that the Foreign Account Tax Compliance Act might have on American citizens.

That item didn't simply deal with people living in the U.S. who might have funds in foreign banks and were unaware of all the tax implications attached to them. It also discussed the threat that Americans who happen to live and work overseas might come to face as a result of the burdens of FATCA. 

Fort Lauderdale trial of Ex-UBS exec could be just the start

The trial of a former top official of Switzerland's UBS bank is getting underway in Florida. The U.S. government is alleging that Raoul Weil was instrumental in aiding thousands of U.S. citizens evade taxes by hiding as much as $20 billion in his bank's secret accounts.

He has pleaded not guilty and Weil's attorney indicated to the jury during his opening that the prosecution's case is weak. Bloomberg reports that former employees of Weil's who are expected to be called by the government to testify were "rogue" operators who participated in illegal actions without Weil's knowledge. And he says their implications of Weil are a bid to escape punishment.

Lack of intent may not be enough to avoid tax crime charges

Securities, tax and business regulators are turning to criminal prosecution more frequently than ever before to achieve their objectives. Among the laws they are still learning to leverage are those dealing with foreign assets -- the Foreign Bank Account Report (FBAR) that the Internal Revenue Service requires tax filers to submit and the Foreign Account Tax Compliance Act (FATCA).

The incentives for them to take action are high. According to information from the Congressional Record, it's estimated that as much as $100 billion a year goes uncollected because of what officials suspect is the use of foreign accounts to evade taxes. 

What can I expect once told I'm being audited by the IRS?

The burden of having to go through an Internal Revenue Service audit isn't something most taxpayers need to worry about. According to various sources, statistically speaking, the IRS is estimated to only audit a little over 1 percent of the 140 million individual tax returns filed each year.

Still, when word comes that you are being scrutinized by the IRS and that an audit is in the offing, it can leave you feeling shell-shocked. The IRS isn't oblivious to this reality, which is why it offers information on what to expect through the course of an audit. The thing to remember, though, is that it is presented from the government's perspective. If questions persist, it may be incumbent on you to tap other reliable resources for answers.

Taking note of some FACTA facts

Regular readers of this blog are not strangers to the odd acronym FATCA. As we have noted in past posts, what that stands for is the Foreign Account Tax Compliance Act.

Passed in 2010, in the wake of the Great Recession, FATCA represents what amounts to what some call America's global tax law. And as Forbes observed recently, after a four-year time frame, the law is now in full effect.

What the law requires is that foreign banks let the U.S. know about any Americans who are holding cash in accounts in sums of more than $50,000. If institutions fail to comply, they run the risk of being hit with a 30-percent penalty and being blocked out of U.S. markets. 

2009 fed economic stimulus saw lots of selective tax enforcement

Anyone who has found themselves embroiled in a confrontation over taxes with the Florida or federal government knows that the process can be a tough row to hoe.

In recent years, a lot of Internal Revenue Service effort has been devoted to cracking down on alleged tax evasion committed through the use of foreign bank accounts. That should not be taken to mean that the IRS is ignoring the home front.

Indeed, the reality is that cases of alleged tax fraud and other forms of white collar crime are increasingly being investigated and prosecuted. And the legal demands of those kinds of cases are such they should never be faced without the help of experienced counsel.

What's the regulatory forecast regarding corporate inversions?

The environment of corporate taxes in the United States has always been rather heated. But in recent years the strategies many large businesses have started to pursue to protect assets and reduce tax liabilities have taken on a global perspective. The result might be called a form of global warming that has sparked storms of tax controversy.

If all those meteorological analogies seem a little hyperbolic, consider that one of the key strategies roiling the regulatory atmosphere is tagged as an inversion. We refer, of course to the corporate inversion -- the practice certain global companies follow of sheltering profits in overseas operations so as to reduce their tax liability in the United States.

Robert Redford sues to scuttle double taxation effort

The Constitution gives states and the federal government certain authority to levy and collect taxes. But there are limits beyond which the various governments cannot go.

Wrangling over where the line is drawn was one of the reasons we fought the Revolutionary War. And as readers of this blog likely can appreciate, battles continue to be fought over some questions about boundaries to this day. When tax controversies arise, the history and nuance of the law tend to require the skill of experienced legal counsel.

IRS offshore tax evasion investigation snares Florida man

Under federal tax law, an American citizen must file annual reports with the IRS that disclose foreign income. In a recent example, an 83-year-old Florida man was convicted of filing false returns over a 25-year period, from 1987 through 2012. 

Specifically, the man failed to report the money he held in accounts in Switzerland and Israel. Although even a tax lawyer would agree that federal income tax forms might become complicated, the omission in this case appeared intentional. For example, the man used a code phrase in communications with those international bankers. In addition, his withdrawals were always under $10,000, which is the threshold when banks must report a transaction to federal regulators.

U.S. company explores tax minimization strategies

Walgreen Co. recently announced that it would not be reincorporating its retail and pharmacy business abroad. Notably, the primary reason behind the proposed move was to minimize its tax obligations.

Walgreen had been considering what is known as an inversion, which is where a U.S. company that also owns a foreign business shifts it tax domicile by reincorporating abroad. In this case, Walgreen also owns the European pharmacy chain Alliance Boots, so it was considering a domicile change to Britain or Switzerland. 

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