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Fort Lauderdale Tax Law Blog

Don't let innate fears of IRS audits lead to rash action

The only sure thing in life is death and taxes. No one is really certain who the first person was to come up with that line. If you Google it, you'll find that it's been attributed to all sorts of people, including Benjamin Franklin.

One thing that is certain is that the phrase is so ensconced in our culture that people are as likely to associate images of the Grim Reaper with the Internal Revenue Service as they are with the notion of death.

The basis of such fear is likely that most people really don't know how the IRS operates. That puts innocent individuals at a huge disadvantage. But it doesn't have to be that way. Anyone faced with an apparent tax controversy should know that the process can be navigated whether it's an audit or other tax investigation.

What does Weil verdict mean for U.S. efforts against tax evasion?

The verdict is in and the determination of the jury is that former Swiss banker Raoul Weil is not guilty of conspiring to aid thousands of Americans evade paying billions of dollars in U.S. taxes by shielding money in UBS AG bank accounts overseas.

As we posted previously, the trial in Fort Lauderdale marked one of the biggest cases brought by the Department of Justice in connection with efforts to clamp down on suspected tax evasion. The trial lasted about three weeks and the jury reportedly took only about an hour to come back with an acquittal. The question that many are now bandying about is what the decision means for the future of the Justice Department's crackdown efforts.   

Until the next clear action by prosecutors, any views in this regard will have to be deemed speculation. But there is plenty of that going on. 

What's the tax implication of forgoing health insurance?

2014 marked the first full year of the federal health insurance marketplace. The launch was more than a bit rocky in many states. The government confirms that more than 8 million people took advantage of the exchange system to get personal insurance coverage.

But the Centers for Disease Control and Prevention estimates that about 41 million American adults just said no. Those folks in Florida and elsewhere opted to face the tax implications of going that route rather than get coverage. A survey done by the Kaiser Family Foundation found that for most the decision was driven by simple math. The expected tax hit was easier to take than the cost of the insurance.

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.

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