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Washington DC Tax Law Blog

Court provides clarity on standard of proof in FBAR dispute

The United States of America filed suit against a taxpayer for his alleged “willful” violation of the requirement to report an interest in a foreign account. The government had already established the taxpayer was required to file a Report of Foreign Bank and Financial Accounts (FBAR). The court is asked to determine which standard of review is required to establish if the violation was willful.  

What was the outcome of the case? The government argued it only needed to establish the violation was willful by the preponderance of the evidence standard. The taxpayer countered that the clear and convincing evidence standard was more appropriate for this case. The clear and convincing standard is a more rigorous standard.

5 face criminal charges for FATCA violations

The Department of Justice recently indicted five individuals for obstruction of the Internal Revenue Service’s (IRS) administration of the Foreign Account Tax Compliance Act (FATCA). These individuals allegedly agreed to open offshore accounts without collecting required FATCA information. The agency accuses these individuals of scheming to evade reporting requirements.

As noted in a recent press release from the Department of Justice, the accused were allegedly part of two schemes:

IRS highlights tax benefits available for small businesses

The Internal Revenue Service (IRS) has provided some guidance for small businesses. The agency recently posted a news release to remind small business owners of a tax credit that is available for those who hire long-term unemployment recipients.

What is this tax credit? The Work Opportunity Tax Credit (WOTC) is available for qualified first and second year wages paid to eligible employees.

Offshore Voluntary Disclosure Program scheduled to end

The Internal Revenue Service (IRS) recently announced the Offshore Voluntary Disclosure Program (OVDP) will end. The OVDP is currently scheduled to close September 28, 2018.

What is the OVDP? The program began in 2009. It provided an opportunity for those with offshore accounts to voluntarily come into compliance with United States tax laws.

Do you need to report that foreign asset?

The Internal Revenue Service (IRS) expects United States citizens and resident aliens to report certain foreign assets. Individuals with foreign assets generally fit one of two categories: either they live and work abroad or live stateside but have foreign financial interests.

Tax obligations for those who live and work abroad

SCOTUS declines case questioning constitutionality of FATCA

The Supreme Court of the United States (SCOTUS) declined to hear a case that questions the constitutionality of the Foreign Account Tax Compliance Act (FATCA).

A group of American expatriates brought the case against the government based on the contention that it violated their Fourth Amendment protections and the law has resulted financial loss.

Tax crimes and prison time: 4 examples from 2017

The Internal Revenue Service (IRS) audited approximately 934,000 tax returns in 2017. The IRS conducted 70.8 percent of these audits via a mailed correspondence and 29.2 through a full field investigation.

The IRS uses these investigations to determine if tax payers are correctly reporting income and expenses. In some cases the evidence gathered during an initial investigation can result in a criminal investigation. Criminal investigations by the IRS are not uncommon. The agency conducted 3,019 criminal investigations just last year.

Biggest tax tip for 2017 filings? You may be surprised.

The biggest tax tip for 2017 tax filings may come as a surprise. This is because it does not have to do with 2017 taxes. The tax reform passed for 2018 overhauls the system. As a result, the reform could translate to a change in your tax obligations in 2018. 

Thus, arguably the biggest benefit while completing 2017 tax filings is to look towards the future. Review tax obligations for 2017 to help determine if you need to make adjustments in 2018.

Morocco signs on to the Foreign Account Tax Compliance Act

The United States has taken a hard line approach on tax compliance for assets held in foreign countries. Those who hold these assets and fail to comply with tax laws face serious penalties. Penalties that can include jail time.

Part of this effort involves the Foreign Account Tax Compliance Act (FATCA).

Tax reform in the U.S. could trigger big changes in Europe

One of the goals of recent tax reform in the United States was to encourage businesses to bring revenue currently kept in foreign countries back into the United States.

Not everyone was thrilled with this change — including a number of European countries.

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