Posts Tagged ‘Federal Tax Crime Blog’

Foreign accounts: IRS relaxed some deadlines for old years, but not for this year.

Friday, June 17th, 2011 by Joe Kristan

From Andrew Mitchel’s International Tax Blog:

In Notice 2011-54, the I.R.S. has provided an additional extension for persons having signature authority over, but no financial interest in, a foreign financial account in 2009 or earlier calendar years for which the reporting deadline was extended by Notice 2009-62 or Notice 2010-23. These persons now have until November 1, 2011, to file FBARs with respect to those accounts. The deadline for reporting signature authority over, or a financial interest in, foreign financial accounts for the 2010 calendar year remains June 30, 2011.

LInk: Notice 2011-54
Other coverage:
Federal Tax Crimes Blog: Pre-2010 FBAR Filing Extension to 11/1/11 for Signatories Only


India: the new Switzerland?

Friday, April 8th, 2011 by Joe Kristan

The IRS campaign against offshore tax evasion has gone to the far east with a “John Doe” summons request for HSBC India Bank. The government seeks the names of U.S. taxpayers who might be parking funds in Indian accounts to hide them from the IRS.
Of course this is a worry for any such tax evaders. Unfortunately, it might also be bad news to Indian nationals who moved to the U.S. without closing their accounts back home; they might find that they have inadvertently failed to file the “FBAR” foreign account disclosure forms, with all of the nightmares that can bring.
Jack Townsend has more at the Federal Tax Crime Blog


Long sentences for offshore tax fraudsters

Monday, February 7th, 2011 by Joe Kristan

Two Florida hoteliers who were convicted of hiding cash from the IRS in offshore accounts received 10-year sentences last week for their trouble. That just might make the new IRS “amnesty” seem like a better to some folks. Defense attorney Jack Townsend has more at the Federal Tax Crimes Blog, including some good discussion in the comments:

…with acceptance of responsibility and contrition (real contrition if they could muster it up), they probably would have gotten a sentence much lower than 8 years. They paid a lot to go to trial.

Let’s hope they can enforce the law against tax cheats without shooting the jaywalkers.
UPDATE: More from TaxGrrrl.


Tax Shelter figures get 50-month sentence

Monday, January 31st, 2011 by Joe Kristan

Two prominent figures in the high-end marketed tax shelters of the 1990s and early part of the last decade were sentenced for tax crimes last week. From the Department of Justice Press Release:

Quellos founder and former CEO JEFFREY I. GREENSTEIN, 48, of Mercer Island, Washington, and former Quellos tax attorney CHARLES H. WILK, 52, of Seattle, pleaded guilty in September 2010. Today both men paid the IRS $7 Million in penalties related to their personal gain realized from the design, promotion and implementation of the fraudulent tax shelter, which they called POINT. The estimated tax loss from the scheme is $240 million. Those losses have since been repaid by the taxpayers.

Most of the big tax shelters at least involved real transactions, even if they were rigged to create tax losses without economic substance. Not so here, according to the press release:

Greenstein and Wilk did not tell clients, or the attorneys who evaluated the proposals, that the POINT transaction was predicated on a sham. They knew but did not disclose that there was no offshore investment fund, and that no shares of stock were actually purchased and possessed by any offshore investment fund. They knew that the purported offshore investment fund was merely a shell entity with nominee administrators and no assets or employees.

Other than that, it was a great shelter. Jack Townsend has more, including observations of the way tax shelter promoter sentences seem to vary inexplicably.


You can’t avoid penalties by relying on weasels

Friday, May 21st, 2010 by Joe Kristan

Many investors in exploded tax shelters of the late 1990s and early 2000s have found themselves subject not only to back taxes, but also to stiff penalties for taking unreasonable tax return positions. Jack Townsend, a criminal defense tax attorney, gives some insight as to why by reporting on a judge’s opinion that rips two big law firms:

There were two principal law firms involved in issuing the Egan opinions that would, the parties hoped, give the taxpayers risk-free access to the audit lottery for which they charged large premium fees (sort of like the driver of the get away car for a bank robbery charging a lot more than a tax driver would charge).

The judge on the opinion letters:

The authors of the opinion letters knew that it was not likely that the Fidelity High Tech or Fidelity International transaction would survive a legal challenge in which all the underlying facts were made known…
The purpose of the opinion letters was not to provide legal guidance, but to provide a potential defense against the imposition of penalties, and thus to induce the taxpayer/Investor to enter into the transaction.

It’s long, but worth reading in full.