Friday, September 23, 2016

Your Offshore Confidential Information Is Being Delivered Daily to Tax Authorities - New Leak of Bahamian Offshore Files!

Once again the International Consortium of Investigative Journalists (ICIJ), the same group that released the now infamous “Panama Papers,” has now released a cache of leaked documents provides names of politicians and others linked to more than 175,000 Bahamian companies registered between 1990 and 2016!

For years, Neelie Kroes traveled Europe as one of the continent’s senior officials, warning big corporations that they couldn’t “run away” from the European Union’s rules. The Dutch politician sympathized with average citizens who worried they’d been left to pay the bills “as infringers cream off the extra profits.”
What Kroes never told audiences and didn’t tell European Commission officials in mandatory disclosures was that she had been listed as a director of an offshore company in the Bahamas, the Caribbean tax haven whose secrecy and tax structures have attracted multinational companies and criminals alike. Kroes was listed as director of a Bahamian company from 2000 to 2009, according to documents reviewed by the International Consortium of Investigative Journalists.  

Details of Kroes’ link to the offshore company are among the numerous revelations found in a new leak of documents, received by the German newspaper Süddeutsche Zeitung and shared with ICIJ, that disclose details behind companies incorporated in the Bahamas. The cache of 1.3 million files from the island nation’s corporate registry provides names of directors and some owners of more than 175,000 Bahamian companies, trusts and foundations registered between 1990 and early 2016. 
Today ICIJ, Süddeutsche Zeitung and other media partners are making this information available to the public. This creates, for the first time, a free, online and publicly-searchable database of offshore companies set up in the Bahamas.

This information has been combined with data from the Panama Papers and other leaked offshore documents to add additional heft to one of the largest public databases of offshore entities in history.
The new leaked documents include the names of 539 registered agents, corporate middlemen who serve as intermediaries between Bahamian authorities and customers who wish to create an offshore company. Among them is Mossack Fonseca, the law firm whose leaked files formed the basis of the Panama Papers. The firm set up 15,915 entities in the Bahamas, making it Mossack Fonseca’s third busiest jurisdiction. At one point, Bahamian companies were among Mossack Fonseca’s best-sellers.

Beyond Mossack Fonseca and the Panama Papers, the leaked Bahamian files reveal details of the offshore activities of prime ministers, cabinet ministers, princes and convicted felons. It is generally not illegal to own or direct an offshore company, and there are legitimate business reasons in many cases for setting up an offshore structure. But transparency experts say it’s important that public officials disclose their connections to offshore entities.
The political and government figures named in the leaked documents include Colombia’s minister of mines and energy between 1999 and 2001, Carlos Caballero Argáez. He was listed as president and secretary of a Bahamian company, Pavc Properties Inc., between 1997 and 2008. Caballero Argáez also appeared as director of Norway Inc., a company registered in the Bahamas between 1990 and 2015.
 
 
All U.S. Taxpayers with
"Unreported Income" 
From Offshore Accounts
Need To Come Clean NOW before
Their Illegal Activity is Identified! 
 

 
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is Right for You?


 
Contact the Tax Lawyers at 
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Thursday, September 22, 2016

Did You Know That President Obama Could Obtain Donald Trump's Tax Returns?

In this presidential election, the Republican candidate Donald Trump steadfastly refuses to release his tax returns.this is caused political blogs to  have a lively discussion regarding whether President Obama could request  Donald Trump's tax returns from the Internal Revenue Service (IRS)?

President Obama could obtain Donald Trump's tax returns under Section 6103g of the Internal Revenue  Code, the President may submit a request for the IRS to provide him (or a designated employee) with "return information with respect to any taxpayer." That request must include "the specific reason why the inspection or disclosure is requested. However, that section of the U.S. Code only authorizes the President to obtain and examine tax returns, not to publicly disclose them.

Have a Tax Problem?

 
 

Let Us Help!

 
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 for a FREE Tax Consultation Contact US at
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Source:

Snopes



Tuesday, September 20, 2016

No More Face to Face Meetings at IRS Appeals Division?

IRS Appeals Division Slashes Taxpayer Rights preview image
Brager Tax Law Group posted that the IRS announced that effective Oct. 1, 2016, it will rarely conduct Appeals Conferences in person. More specifically, Internal Revenue Manual (IRM) 8.6.1.4, blandly entitled “Conference Practices,” provides that ALL conferences will be held by telephone except under certain specific enumerated circumstances. Those circumstances are as follows:
  • There are substantial books and records to review that cannot be easily referenced with page numbers or indices
  • The ATE [that’s Appeals Team Employee, aka Appeals Officer, or Settlement Officer] cannot judge the credibility of the taxpayer’s oral testimony without an in-person conference
  • The taxpayer has special needs (e.g. disability, hearing impairment) that can only be accommodated with an in-person conference
  • There are numerous conference participants (e.g., witnesses) that create a risk of an unauthorized disclosure or breach of confidentiality
  • An alternative conference procedure (e.g., Post Appeals mediation (PAM) or Rapid Appeals Process (RAP)) involving separate caucuses will be used
  • Another IRM section specific to the workstream calls for an in-person conference
The mission of the IRS Appeals Division is to “resolve tax controversies, without litigation, on a basis which is fair and impartial to both the Government and the taxpayer and in a manner that will enhance voluntary compliance and public confidence in the integrity and efficiency of the Service.” Unfortunately, this new policy will not further that mission, and indeed will impede it.

Have a Tax Problem?

 
 
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Monday, September 19, 2016

Exelon Loses Over $1.6B Taxable Gain On Plant Sales

BREAKING: Exelon Loses To IRS Over $1.6B Taxable Gain On Plant Sales preview imageAccording to Law360Exelon, the successor to Unicom Corp. and subsidiaries, had entered into a series of like-kind exchanges with unrelated tax-exempt public utilities after it sold its fossil fuel power plants in Northern Illinois for $4.8 billion in 1999. The exchanges involved sale and leaseback strategies by which the tax-exempt entities would receive a lump-sum payment to lease power plants to Exelon, and then Exelon would sublease the plant back to the public utility, according to the court’s opinion.

The transactions were designed to allow Exelon to defer its income tax and obtain various deductions related to replacement properties, but Judge David Laro said that they were not true leases since they did not transfer the benefits and burdens of ownership to Exelon.

“The substance of the transactions is not consistent with their form,” Judge Laro said, denying Exelon certain deductions and holding it liable for accuracy-related penalties.


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Do you Have a Singapore Account? Singapore is Now Automatically Sharing Your Account Information!

On July 25, 2016 we posted Tax Havens Coming Clean and Becoming Transparent, where we discussed that the Inland Revenue Authority of Singapore has issued an e-Tax Guide on the territory's general anti-avoidance rule in Section 33 of the Income Tax Act.

The guide, issued on July 11, 2016, explains the three tests to determine whether the GAAR should apply. It includes examples on actionable avoidance arrangements, namely: the circular flow or round-tripping of funds; the creation of more than one entity for the sole purpose of obtaining a tax advantage; changes to the form of business entity for the sole purpose of obtaining a tax advantage; and the attribution of income that is not aligned with economic reality.

Now Singapore has signed agreements with both the UK and Australia to automatically exchange financial account information under the OECD Common Reporting Standard (CRS). Exchanges with both jurisdictions will start in September 2018, though the supporting customer due diligence obligations will start earlier.  
 
The US and Singapore governments have issued a joint statement affirming closer cooperation on bilateral tax issues. Both countries are discussing a tax information exchange agreement (TIEA) for the automatic exchange of tax information (AEOI), and an intergovernmental agreement (IGA) 'that provides for reciprocal automatic exchange of information with respect to certain financial accounts under the Foreign Account Tax Compliance Act (FATCA).  The two countries are to complete negotiations and sign the agreements by the end of 2017.
 
Do You Have Undeclared Offshore Income?
 

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Sources:

 
 

 
 










 
 
 
 

Offshore Gambling Accounts are not Reportable on FBAR

A US appellate court has ruled that an account with an offshore internet gaming site is not a financial account for purposes of the FBAR (foreign bank account reporting) penalty (US v Hom, No. 14-16214 DC).

Overturning an earlier district court ruling, the Ninth Circuit cancelled USD40,000 of penalties imposed on Hom for failing to file an FBAR for his online poker accounts in the UK, because there was no evidence that the funds maintained with either poker site served any purpose other than to play poker.


 Need FBAR Advice?

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Sources:
 


Friday, September 16, 2016

IRS Crack Down On Foreign Tax Credits For US Multinationals

The U.S. Department of the Treasury revealed on September 15, 2016 that it is drafting rules to curb US Multinationals from obtaining US foreign tax credits as a result of foreign government's audits resulting in foreign tax adjustments for US Multinationals.


In Notice 2016-52, 2016-40 IRB, the IRS has announced that it intends to issue regs under Code Sec. 909 to address the separation of related income from foreign income taxes paid by a “section 902 corporation” pursuant to a foreign-initiated adjustment. The regs will identify two new “splitter arrangements,” one of which involves a change to ownership structure made in anticipation of the foreign-initiated adjustment, and the other of which involves making an extraordinary distribution before paying the adjustment so as to generate substantial amounts of foreign taxes deemed paid without a corresponding U.S. income inclusion.
 
On September 12, 2016, we posted US Probe Resulted In EU Apple Tax Assessment, where we discussed that the European Commission’s probe into Apple, which resulted in an order for the tech giant to pay up to €13 billion ($14.5 billion) in back taxes to Ireland, was prompted by a U.S. Senate investigation, European Union Competition Commissioner Margrethe Vestager said on Friday.
The commission ordered Ireland to collect a staggering $14.5 billion in back taxes from Apple, and the Treasury said on September 15, 2016 that it now wants to prevent companies from taking steps to separate their foreign income tax for prior taxable years from the income the tax relates to.

The Treasury notice took direct aim at the European Union’s push to have its member states collect more taxes from U.S. companies’ overseas units, Treasury officials said they’re writing new rules that would restrict how corporations can use credits on their foreign tax payments to reduce their U.S. tax bills. The official notice puts corporate tax planners on notice that officials will challenge any strategies that violate their intended rules.

“Such foreign-initiated adjustments may arise under European Union state aid law, to the extent EU state aid payments result in creditable foreign taxes,” the department said.

Corporations may also make extraordinary distributions, so that undistributed earnings can be used to inflate the amount of foreign taxes paid, without repatriating the earnings and including them in U.S. taxable income, the Treasury said.

On order to prevent so-called splitter arrangements, or the separation of creditable foreign taxes from the underlying related income, the IRS is considering deferring the right to claim credits until the related income is included in U.S. taxable income.

Have a Foreign Tax Credit Problem?


Let US Help!
 
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 for a FREE Tax Consultation Contact US at
or Toll Free at 888-8TaxAid (888 882-9243).
 
 
 
 

 
 
 

 
Sources