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Washington DC Tax Law Blog

3 lessons from recent FATCA conviction

The United States government has convicted a former chief business officer and chief executive officer of an off-shore bank with locations in Budapest, Hungary, St. Vincent and the Grenadines for a failure to comply with the United States’ Foreign Account Tax Compliance Act (FATCA).

Government builds a case: Undercover agent poses as client

Man gets 18 months and $600,000 bill for tax evasion

The Internal Revenue Service (IRS) does not take allegations of tax evasion lightly. The agency suspects a taxpayer has committed this crime, it will investigate and pursue charges. A recent case provides an example.

Was a taxpayer hiding assets?

High value art and accusations of tax evasion

The use of art to evade tax obligations is not a novel concept. As such, it is not uncommon for those who deal and purchase art to find themselves the subject of a tax evasion investigation.

Investigations are on the rise: Government investigation efforts focus on art dealings

Danish offshore accounts target of latest crackdown

The Danish government is looking to hold bank executives accountable for illegal use of offshore accounts, according to a recent report by Bloomberg. The push is the result of Danish lenders becoming a hub for money launders.

The increased use of Danish banks for money laundering purposes has led Danish banks to become the center of criminal investigations. Although the banks state they are cooperating fully with these investigations, Danish authorities are pushing for more — they want legislatures to pass laws to allow for additional accountability.

Online sales taxes: What will the impact be on businesses?

In a major ruling last June, the U.S. Supreme Court upheld the authority of states to impose sales tax on online transactions. The Court said such taxation is permissible even if a company does not have a physical presence in a state.

As we noted in a post at the time, however, future litigation will probably be needed to decide what constitutes an undue compliance burden for businesses from online sales taxes.

Manafort’s tax crime defense, explained

Former campaign chair manager for President Donald Trump, Paul Manafort, is currently facing criminal charges. The charges, which include tax evasion, can come with serious criminal penalties. These penalties can include very high monetary fines and potential imprisonment. In this case, Mr. Manafort faces a sentence of lifetime imprisonment.

With so much at risk, it may come as a surprise that Mr. Manafort’s defense chose to rest without calling witnesses.

Is the new 1040 form really going to be a postcard?

President Donald Trump and his administration have made many promises in light of recent tax reform. In addition to reducing most taxpayer’s overall tax obligations, the administration also promised to unveil a “postcard-sized income tax return” to simply tax filings for the 2018 tax year.

It is important to note the government aims to have a form the size of a postcard, not an actual postcard tax filing. A postcard tax filing would likely lead to serious identity theft concerns.

How do I report offshore accounts or foreign assets?

The United States Internal Revenue Service (IRS) requires taxpayers report foreign assets. A failure to do so can result in fines and even criminal charges. Although most people know about this requirement, not everyone knows exactly how to go about reporting these assets. This post will provide some basic information, including common tax forms that the IRS often requires to meet this obligation.

What are foreign assets? First, it is important to know exactly what the IRS considers a reportable foreign asset. Like all things in the tax world, the answer is not as simple as you may think.

What happens when the IRS audits a tax return?

Think the IRS is about to conduct an audit of your tax returns? The following basic questions and answers can help you get through the process with minimal stress.

What is the purpose of an audit? The Internal Revenue Service (IRS) conducts an audit when there is a tax discrepancy. The agency’s decision to review your tax forms may be triggered by a forgotten form or simple mistake on a tax form. Although the reason behind the audit may be minor, it is wise to take the process seriously.

Can the IRS enforce the FATCA?

The Foreign Account Tax Compliance Act (FATCA) requires foreign financial institutions to register with the Internal Revenue Service (IRS) and report the holdings of United States taxpayers. Foreign institutions that fail to abide by this law face serious monetary consequences — up to 30 percent of the income received from U.S. sources.

But is the threatened penalty enough to encourage compliance? A recent report by the Treasury Inspector General for Tax Administration (TIGTA) digs into this question.

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