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Taxpayer Advocate Proposes Reduced FBAR Penalties, One FATCA Reporting Form

Posted by williambyrnes on April 24, 2015


Irs_logoFOREIGN ACCOUNT REPORTING: Legislative Recommendations to Reduce the Burden of Filing a Report of Foreign Bank and Financial Accounts (FBAR) and Improve the Civil Penalty Structure

excerpts below…

A U.S. citizen or resident with foreign accounts exceeding $10,000 can be subject to disproportionate civil penalties for failure to report the accounts on a Report of Foreign Bank and Financial Accounts (or FBAR) by June 30 of the following year.  Another penalty may apply if the accounts exceed $50,000 and the person does not report them on Form 8938, Statement of Specified Foreign Financial Assets, which is part of the tax return.

Even those who inadvertently failed to file an FBAR (i.e., “benign actors”) are afraid they could be hit with the elevated penalties applicable to willful violations because the government may rely on circum­stantial evidence of willfulness or willful blindness. Such fears have prompted some to enter the IRS’s offshore voluntary disclosure (OVD) programs and agree to pay penalties of such severity that they appear to have been designed for bad actors. The median penalty applied to taxpayers with the smallest ac­counts (i.e., those in the 10th percentile with accounts of $17,368 or less) under the 2011 OVD program, is more than eight times the unreported tax—over ten times the 75 percent penalty for civil tax fraud.

In June 2014, the IRS reduced the amount it requires certain benign actors to pay under its settlement programs. However, it did not allow those who have already signed closing agreements to receive the same, more reasonable program terms, in effect punishing them for addressing the problem quickly. Unexpected and disproportionate FBAR penalties may violate a taxpayer’s rights to be informed and to a fair and just tax system.  Because they cause some people to agree to excessive OVD settlements, they may also erode the rights to pay no more than the correct amount of tax, challenge the IRS’s position and be heard, and appeal an IRS decision in an independent forum, as discussed in prior reports.

For small accounts, the maximum penalty may be an even greater percentage. For example, someone with a total of $10,000 in five different foreign accounts ($2,000 in each) could be subject to a non-willful FBAR penalty of $300,000 (six years times five accounts times $10,000) or 30 times the account balance. If the IRS deems the violation willful, the penalty could rise to $3 million (six years times five accounts times $100,000) or 300 times the account balance.

Other information reporting penalties are more proportionate than FBAR penalties. For example, there is no penalty for failing to file a U.S. income tax return if there is no unpaid tax. The penalty for failure to file most information returns and payee statements is generally $100 per return, rising to 10 percent of the unreported amount for intentional violations. By contrast, the FBAR penalty may apply even if the FBAR is one day late and even if the taxpayer has no net underreported tax (e.g., because of foreign tax credits) as a result of underreporting income from the account.

RECOMMENDATIONS

To address the disproportionality of the civil FBAR penalty, the National Taxpayer Advocate recommends legislation to:

Cap the civil FBAR penalty at the lesser of

(a) Ten percent of the unreported account balance or five percent for non-willful violations (similar to the IRS’s mitigation guidelines), and

(b) Forty percent of the portion of any underpayment attributable to the improperly undis­closed accounts (similar to the penalty for undisclosed foreign financial assets (e.g., assets not reported on Form 8938) under IRC § 6662(j)).

Eliminate or waive the civil penalty for failure to report an account on an FBAR if there is no evidence the account was used in connection with a crime and:

a. The account information was already provided to the IRS, for example, on a Form 8938, Statement of Specified Foreign Financial Assets, or by a third party (e.g., a financial institution or government);

b. The amount of unreported income from the account does not create a substantial under­statement under IRC § 6662(d); or

c. The taxpayer resides in the same jurisdiction as the account.

One form would be better than two, if confidentiality concerns are addressed.

If it aligns the FBAR and Form 8938 thresholds and deadlines, Congress should also consider consolidat­ing the reporting requirements. Indeed, between 1970 and 1977, the Treasury Department only required taxpayers to report foreign accounts under the BSA on tax returns using Form 4683, U.S. Information Return on Foreign Bank, Securities & Other Financial Accounts.

In 1977, after taxpayer privacy laws were expanded under IRC § 6103, the IRS required people to report these accounts on a different form—not part of the return—so it could share the information with other federal agencies such as FinCEN.79 Therefore, if Congress requires the Treasury Department to combine these forms, it may also want to clarify that certain information on the combined form is not deemed part of the tax return and is not subject to IRC § 6103.

In connection with any such change, however, Congress should require the IRS to limit and prominently identify on the form, any information that may be disclosed to FinCEN.80 Without transparency and specificity, some taxpayers might withhold other information from the IRS based on a concern that it could be disclosed to other agencies. Foreign account information may be distinguished from other tax-related information because it is already required to be reported to FinCEN.

 

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International Financial Crimes News

Posted by williambyrnes on April 24, 2015


$4 billion in CFTC Fines for LIBOR and Euribor Manipulation: Deutsche Bank, Rabo, Citibank, RBS, JP Morgan, UBS, Barclays, HSBC

With this Order, the CFTC has now imposed penalties of nearly $2.7 billion on six financial institutions and two interdealer brokers for LIBOR, Euribor, and other interest rate benchmark abuses. In addition, for similar misconduct relating to foreign exchange benchmarks, the CFTC recently imposed $1.4 billion on five financial institutions, for a total of over $4.1 billion in penalties in the CFTC’s enforcement program focused on ensuring the integrity of global financial benchmarks. The fine imposed on Deutsche Bank represents the largest fine in the CFTC’s history.

Deutsche Bank’s Pleads Guilty, Pay $2.519 billion in Penalties & Disgorgement, for Manipulating LIBOR

Together with approximately $1.744 billion in regulatory penalties and disgorgement—$800 million as a result of a Commodity Futures Trading Commission (CFTC) action, $600 million as a result of a New York Department of Financial Services (DFS) action, and $344 million as a result of a U.K. Financial Conduct Authority (FCA) action—the Justice Department’s criminal penalties bring the total amount of penalties to approximately $2.519 billion.
FinCEN Issues Quarterly Update of SAR Stats

The Financial Crimes Enforcement Network (FinCEN) has issued the SAR Stats quarterly update, which provides information on Suspicious Activity Reports (SARs) filed through March 31, 2015. The updated statistics can be viewed at http://www.fincen.gov/news_room/rp/sar_by_number.html. Quarterly Update (April 2015) Depository Institutions…

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FATCA GIIN Registrations Update for April | Kluwer International Tax Blog

Posted by williambyrnes on April 23, 2015


FATCA GIIN Registrations Update for April | Kluwer International Tax Blog.

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Deutsche Bank’s Pleads Guilty, Pay $2.519 billion in Penalties & Disgorgement, for Manipulating LIBOR

Posted by williambyrnes on April 23, 2015


read the full story on International Financial Law Prof Blog.

A wholly owned subsidiary of Deutsche Bank AG (Deutsche Bank) has agreed to plead guilty to wire fraud for its role in manipulating the London Interbank Offered Rate (LIBOR), a leading benchmark interest rate used in financial products and transactions around the world.  In addition, Deutsche Bank entered into a deferred prosecution agreement to resolve wire fraud and antitrust charges in connection with its role in both manipulating U.S. Dollar LIBOR and engaging in a price-fixing conspiracy to rig Yen LIBOR.  Deutsche Bank and its subsidiary will pay $775 million in criminal penalties to the Justice Department.  Together with approximately $1.744 billion in regulatory penalties and disgorgement—$800 million as a result of a Commodity Futures Trading Commission (CFTC) action, $600 million as a result of a New York Department of Financial Services (DFS) action, and $344 million as a result of a U.K. Financial Conduct Authority (FCA) action—the Justice Department’s criminal penalties bring the total amount of penalties to approximately $2.519 billion.

download the documents at International Financial Law Prof Blog

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Financial Law Headlines

Posted by williambyrnes on April 16, 2015


Former New York Assembly Speaker Sheldon Silver’s Headaches Mount as Son-in-Law Indicted in Ponzi Scheme

Marcello Trebitsch, son-in-law of former New York Assembly speaker Sheldon Silver, was arrested on wire fraud and securities charges stemming from his alleged scheme to defraud multiple investors of approximately $7 million through a fraudulent investment scheme that he allegedly perpetrated for at least five years.
The Lehman Brothers Bankruptcy B: Risk Limits and Stress Tests

Investment banks are in the business of taking calculated risks. Risk management infrastructure facilitates the safe pursuit of profits and the balancing of associated risks.

Will You Buy Fannie Mae’s Non-Performing Mortgages?

Fannie Mae Wednesday began marketing its first bulk-sale of non-performing loans (NPLs). The pool of approximately 3,200 loans totaling $786 million in unpaid principal balance is available for purchase by qualified bidders. This sale of NPLs is being marketed in…
The Prudent Investor Rule and Market Risk: An Empirical Analysis

The prudent investor rule, enacted in every state over the last 30 years, is the centerpiece of fiduciary investment law. Repudiating the prior law‘s emphasis on avoiding risk, the rule reorients fiduciary investment toward risk management in accordance with modern…
HSBC faces French criminal tax probe

HSBC says it has been placed under formal criminal investigation by French magistrates over alleged past tax-related offences at its Swiss private bank.

Brazilian Fraud is Bigger? Brazilian Ministry of Finance‘s Tax Fraud for Bribes Or Petrobras’ Contract Skims?

The answer is – it’s a close call. Both will probably, at the current very weak exchange rate, come in around US$6 billion (20 billion reais). Reuters reports that the tax fraud at the Ministry of Finance may be worth…
Organized Cybercrime Ring Member Sentenced to 150 Months in Prison for Selling Stolen and Counterfeit Credit Cards

Jermaine Smith, aka “SirCharlie57,” aka “Fairbusinessman,”, of the identity theft and credit card fraud ring known as “Carder.su” was sentenced today to 150 months in federal prison for selling stolen and counterfeit credit cards over the Internet. He was further ordered to pay $50.8 million in restitution.
Texas A&M Hires Nine Highly Published Law Faculty

Texas A&M announced the addition of nine new faculty beginning in the fall of 2015. “Hiring these new faculty is part of our effort to reduce our student-faculty ratio, which will improve the quality of your classroom experience. ” states…

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Lehman Brothers case study of strong then weak risk management. Why did its risk management protocols change?

Posted by williambyrnes on April 15, 2015


http://lawprofessors.typepad.com/intfinlaw/2015/04/the-lehman-brothers-bankruptcy-b-risk-limits-and-stress-tests.html

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These are the 10 least tax-friendly states for retirees | LifeHealthPro

Posted by williambyrnes on April 13, 2015


http://www.lifehealthpro.com/2015/04/08/these-are-the-10-least-tax-friendly-states-for-ret

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Texas A&M hires 9 new law faculty

Posted by williambyrnes on April 13, 2015


http://lawprofessors.typepad.com/intfinlaw/2015/04/texas-am-hires-nine-highly-published-law-faculty.html

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Bitcoin – Survey of Regulation By State and Federal

Posted by williambyrnes on April 10, 2015


http://lawprofessors.typepad.com/intfinlaw/2015/04/the-block-is-hot-a-survey-of-the-state-of-bitcoin-regulation-and-suggestions-for-the-future.html #bitcoin

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Distance Learning Faculty Enrichment Discussion at University of Arizona College of Law Tomorrow

Posted by williambyrnes on April 8, 2015


University of Arizona James E. Rogers College of Law will host a faculty enrichment presentation tomorrow April 9 from 12 noon (room 237) (PPT –> Arizona WGDE 4-9-15 Final).

“I will introduce the topic with various empirical studies of distance learning pedagogy and outcomes, before turning teaching phototo the findings of the Work Group of Distance Learning for Legal Education’s Best Practice Recommendations for Distance Learning for Legal Education 2.0,” stated William Byrnes.  “The Work Group is an evolving project of faculty and administrators participating from approximately 83 ABA law schools, representative of the four tiers, and its Recommendations are collaboratively developed and authored over a four year period.”

“In 2014 the American Bar Association revised Standard 306 “Distance Education”, expanding opportunities and flexibility for institutions to leverage technological advances within the JD academic curriculum.” explained Byrnes. “The ABA initially acquiesced to an online LL.M. in 1998.  Yet, it is since the initial inception of the Work Group in 2010 that most of the 48 LL.M.s offered online by 30 ABA full approved law schools have been founded.” Byrnes exclaimed, “One ABA law school, William Mitchell, even received a variance to offer a hybrid, partially residential / partially online, JD.  It matriculated 85 candidates in its pioneer class, at its normal LSAT range.”

“As of 2015, nearly all ABA law schools offer the opportunity for an academic experience at a distance for J.D. students,” concluded Byrnes. “But many are still not leveraging communication technologies to enhance that experience and to assist with producing better learning outcomes”.

previous remarks available at Alternative Methods of Teaching and the Effectiveness of Distance Learning for Legal Education

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Fair Approaches for Taxing Previously Untaxed Foreign Income

Posted by williambyrnes on April 6, 2015


In connection with any transition to a new USA international tax system, we need an approach that effectively deals with the trillions of dollars of previously untaxed foreign income held by CFCs. There is logic and fairness in applying a rate on those earnings that is less than the 35 percent home country rate because the rules of the game are being changed significantly.  Guest Financial Law Prof Blogger Jeffery Kadet has written a three part series on the fair approaches for taxing previously untaxed foreign income that will be posted this week on Monday, Tuesday and Wednesday, available on International Financial Law Prof Blog.

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subscribe to the headlines of International Financial Law – from the Law Professors Blog Network 

Posted by williambyrnes on April 3, 2015


International Financial Law Prof Blog

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Holding Financial Institutions Accountable for Fraud

Posted by williambyrnes on April 3, 2015


International Financial Law Prof Blog

Two recent cases show fraudsters have become more sophisticated.  It used to be that fraud schemes depended on the willingness of unwitting consumers to hand over their hard-earned savings in person or through the mail.  Today, the interconnectedness of our electronic banking system means a crook just needs to find a way to acquire one piece of information—a bank account number.  Once he has it, and a means to access the banking system, a bank account—and transfer its money— into his hands.   read about these cases on International Financial Law Prof Blog

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Swiss Asset Manager Peter Amrein Pleads Guilty To Conspiring With U.S. Taxpayers To Evade Tax

Posted by williambyrnes on April 2, 2015


International Financial Law Prof Blog

Peter Amrein worked as a client advisor at a Swiss bank and, later, as an asset manager at a Swiss asset management firm. In those roles, between 1998 and 2012, Peter Amrein helped U.S. taxpayers evade taxes and hide millions of dollars in undeclared accounts at various Swiss banks, including Wegelin & Co., which was charged and pleaded guilty in the Southern District of New York for its conduct in conspiring with U.S. taxpayers to evade taxes. Peter Amrein, among other things, worked with an attorney based in Zurich, Switzerland, to establish sham foundations, which were organized under the laws of non-U.S. countries such as Liechtenstein, so that the undeclared assets of certain of Peter Amrein’s U.S. taxpayer-clients could be maintained in the names of these foreign foundations rather than in the clients’ own names. read the entire case at International Financial Law Prof Blog

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Is HSBC Complying With its Non Prosecution Agreement? Outside Monitor Report is Critical!

Posted by williambyrnes on April 1, 2015


Is HSBC Complying With its Non Prosecution Agreement?  There is much reference within news articles to the 1,000 page report of the outside monitor, former New York prosecutor Michael Cherkasky, and summary letter by Justice.  Read on at International Financial Law Prof Blog.

HSBC’s April 1st DOJ Court Filing About AML Non-Prosecution Available Here

image from www.lexisnexis.comThe International Financial Law Professor Blogger William Byrnes is the author of Money Laundering, Asset Forfeiture and Recovery, and Compliance- A Global Guide is an eBook designed to provide the compliance officer, BSA counsel, and government agent with accurate analyses of the AML/CTF Financial and Legal Intelligence, law and practice in the nations of the world with the most current references and resources.  Special topic chapters will assist the compliance officer design and maintain effective risk management programs.  Over 100 country and topic experts from financial institutions, government agencies, law, audit and risk management firms have contributed analysis to develop this practical compliance guide.

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Public Disclosure of All Beneficial Owners of BVI and Cayman Corporations?

Posted by williambyrnes on March 31, 2015


read about this development at International Financial Law Prof Blog.

image from www.lexisnexis.comThe International Financial Law Professor Blogger William Byrnes is the author of Money Laundering, Asset Forfeiture and Recovery, and Compliance- A Global Guide is an eBook designed to provide the compliance officer, BSA counsel, and government agent with accurate analyses of the AML/CTF Financial and Legal Intelligence, law and practice in the nations of the world with the most current references and resources.  Special topic chapters will assist the compliance officer design and maintain effective risk management programs.  Over 100 country and topic experts from financial institutions, government agencies, law, audit and risk management firms have contributed analysis to develop this practical compliance guide.

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One of the 10 Largest Swiss Private Banks Enters Into Non-Prosecution Agreement with DOJ

Posted by williambyrnes on March 31, 2015


DOJ announced that BSI SA, one of the 10 largest private banks in Switzerland, is the first bank to reach a resolution under the Department of Justice’s Swiss Bank Program.  106 Swiss banks have sought non-prosecution agreements.  read the details at International Financial Law Prof Blog.

image from www.lexisnexis.comThe International Financial Law Professor Blogger William Byrnes is the author of Money Laundering, Asset Forfeiture and Recovery, and Compliance- A Global Guide is an eBook designed to provide the compliance officer, BSA counsel, and government agent with accurate analyses of the AML/CTF Financial and Legal Intelligence, law and practice in the nations of the world with the most current references and resources.  Special topic chapters will assist the compliance officer design and maintain effective risk management programs.  Over 100 country and topic experts from financial institutions, government agencies, law, audit and risk management firms have contributed analysis to develop this practical compliance guide.

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weekly financial planning strategies

Posted by williambyrnes on March 24, 2015


Deferred Income Annuities’ Flex Pay Appeals to Younger Investors

A flurry of regulatory activity has put deferred income annuities (DIAs) in the spotlight frequently in the past year, with many billing DIAs as the up-and-coming option for clients to ensure sufficient income even at an advanced age. Often overlooked,…

QLACs Change the Game in Social Security Timing

Qualified longevity annuity contracts (QLACs) have, in theory, existed for nearly three years, but it’s only in recent months that insurance carriers have begun to offer these products—finally making the QLAC a realistic planning option. While the purpose behind the…
5 Hot Retirement Planning Topics for 2015

Here are some of the top retirement planning trends that your clients need to be aware of in order to maximize their retirement account values in 2015 and beyond. 1: QLACs Become a Reality … 2) Split 401(k) Rollovers Maximize…

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10 most tax-friendly states for retirees

Posted by williambyrnes on March 23, 2015


NU logoEvery client’s goals are different when it comes to choosing where to retire, but from a tax perspective, there are some clear winners that can allow a client to maximize the value of accumulated retirement savings.

While the client’s lifestyle choices — a desire for an expensive home vs. spending on consumer products, for example — greatly impact the tax system that will provide the most substantial benefits, below is a list of ten of the top states for retirees, from a tax perspective. read the analysis of Prof. William Byrnes and Robert Bloink in National Underwriter Life Health Pro

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FATCA Research Project – Help Us Find IGA Model 1 Reporting Deadlines !!!

Posted by williambyrnes on March 20, 2015


d27f6-6a00d8341bfae553ef01b7c6eb77bd970b-piHaydon Perryman has posted a list of Model 1 IGA Countries that have at least one FFI registered with the IRS. We already know the deadlines for Non IGA and Model 2 IGA countries. Please help us in this important research!

In most Model 1 Countries that deadline will be by the end of June 2015 (but not always). Thus, please post by comment any reporting dates you know by jurisdiction – on his blog (if you post here I will copy it over for you).

http://haydonperryman.com/fatca-reporting-deadline-by-jurisdicion/

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Haydon and Byrnes’ Analysis of FATCA Updates & GIIN List of March 2015

Posted by williambyrnes on March 20, 2015


GIIN list, IDES Update, 8938 Form Instruction Updates …. read on Wolters Kluwer.

GIIN Lists Analysis: June 2014 through March 2015

In the words of my English colleague Haydon Perryman, March was a “bit of a damp squib”.  Financial institution FATCA registrations have slowed to a trickle with only 2,479 additional ones seeking a GIIN, bringing the ultimate total to 156,276.

Of this total, … read on Wolters Kluwer

Form 8938 (Reporting of Specified Foreign Financial Assets) Instructions Updated

In the Final Regulations effective 12 December 2014, Form 8938 Reporting of Specified Foreign Financial Assets, the IRS International Financial Law Prof Blogaddressed such issues as dual residents, valuation challenges, foreign currency, virtual currency (left for another time), retirement accounts and insurance policies. The Final Regulations can be found on the FATCA – Regulations and Other Guidance page in the For Individual Taxpayers section. However, as of 10 March 2015, the IRS updated December’s changes to the Form 8938 reporting requirements, as well as including additional information not in the December instructions. A summary of important points follows.  Of this total, … read on Wolters Kluwer

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this week’s financial crimes headlines

Posted by williambyrnes on March 19, 2015


Banca Privada d’Andorra Money Laundering Billions for Corruption and Human Traffickers?

FinCEN’s action also describes the activity of a second high–level manager at BPA in Andorra who accepted exorbitant commissions to process transactions related to Venezuelan third–party money launderers. This activity involved the development of shell companies and complex financial products to siphon off funds from Venezuela’s public oil company Petroleos de Venezuela (PDVSA). BPA processed approximately $2 billion in transactions related to this money laundering scheme.
Former Managing Director of RBS Securities Admits To Multimillion Dollar Securities Fraud of RBS Customers

Katke was a registered broker-dealer and managing director at RBS Securities Inc. As part of the scheme, Katke and his co-conspirators made misrepresentations to induce buying customers to pay inflated prices and selling customers to accept deflated prices for CLO bonds, all to benefit RBS.Commerzbank Admits to Sanctions and Money Laundering Violations, Will Pay $1.45 Billion Penalties!

“If for whatever reason CB New York inquires why our turnover has increase[d] so dramatically, under no circumstances may anyone mention that there is a connection to the clearing of Iranian banks!!!!!!!!!!!!!.”

HSBC’s Whistleblower Leaked Client Information Via Internet

Business Insider reports that “Hervé Falciani, the French-Italian whistleblower who handed over information on 100,000 HSBC client accounts to French authorities in 2009, has published a detailed account on how the transfer of the data actually took place. Also see…
Three Defendants Charged with One of the Largest Reported Data Breaches in U.S. History

Vu was arrested by Dutch law enforcement in Deventer, Netherlands, in 2012 and extradited to the United States in March 2014.

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EU Commission Releases Proposals To Repeal Tax Savings Directive, Instead Impose FATCA Automatic Tax Exchange & Disclosure of All Tax Rulings Within 3 Months of Issuance

Posted by williambyrnes on March 18, 2015


EU CommissionThe European Commission presented a package of tax transparency measures as part of its ambitious agenda to tackle corporate tax avoidance and harmful tax competition in the EU.

A key element of this Tax Transparency Package is a proposal to introduce the automatic exchange of information between Member States on their tax rulings.

Corporate tax avoidance is thought to deprive EU Member States’ public budgets of billions of euros a year. It also undermines fair burden-sharing among tax-payers and fair competition between businesses. Companies rely on the complexity of tax rules and the lack of cooperation between Member States to shift profits and minimise their taxes. Therefore, boosting transparency and cooperation is vital in the battle against aggressive tax planning and abusive tax practices.

The Tax Transparency Package aims to ensure that Member States are equipped with the information they need to protect their tax bases and effectively target companies that try to escape paying their fair share of taxes.

Transparency on Tax Rulings

The central component of the Transparency Package is a legislative proposal to improve cooperation between Member States in terms on their cross-border tax rulings and it aims to mark the start of a new era of transparency.

Currently, Member States share very little information with one another about their tax rulings. It is at the discretion of the Member State to decide whether a tax ruling might be relevant to another EU country. As a result, Member States are often unaware of cross-border tax rulings issued elsewhere in the EU which may impact their own tax bases. The lack of transparency on tax rulings is being exploited by certain companies in order to artificially reduce their tax contribution.

To redress this situation, the Commission proposes to remove this margin for discretion and interpretation. Member States will now be required to automatically exchange information on their tax rulings. The Commission proposes to set a strict timeline: every three months, national tax authorities will have to send a short report to all other Member States on all cross-border tax rulings that they have issued. Member States will then be able to ask for more detailed information on a particular ruling.

The automatic exchange of information on tax rulings will enable Member States to detect certain abusive tax practices by companies and take the necessary action in response. Moreover, it should also encourage healthier tax competition, as tax authorities will be less likely to offer selective tax treatment to companies once this is open to scrutiny by their peers.

Other Tax Transparency initiatives                                                        

The Package also contains a communication outlining a number of other initiatives to advance the tax transparency agenda in the EU. These are:

  • Assessing possible new transparency requirements for multinationals

The Commission will examine the feasibility of new transparency requirements for companies, such as the public disclosure of certain tax information by multinationals. The objectives, benefits and risks of any such initiative need to be carefully considered. Therefore, the Commission will assess the impact of possible additional transparency requirements to help inform a decision at a later stage.

  • Reviewing the Code of Conduct on Business Taxation

The Code of Conduct on Business Taxation is one of the EU’s main tools for ensuring fair corporate tax competition. It sets out the criteria that determine whether a tax regime is harmful or not and it requires Member States to abolish any harmful tax measures that go against the Code. Member States meet regularly to assess their compliance with the Code. But over the past years, the Code has become less effective in addressing harmful tax regimes as its criteria do not take into account more sophisticated corporate tax avoidance schemes. The Commission will therefore work with Member States to review the Code of Conduct as well as the mandate of the Code of Conduct Group in order to make it more effective in ensuring fair and transparent tax competition within the EU.

  • Quantifying the scale of tax evasion and avoidance

The Commission, along with Eurostat, will work with Member States to see how a reliable estimate of the level of tax evasion and avoidance can be reached. There is growing evidence that evasion and avoidance are pervasive and cause significant revenue losses. However, a precise quantification of the scale and impact of these problems has not been determined up to now. Reliable statistics of the scale and impact of these problems would help to better target policy measures against them.

  • Repealing the Savings Tax Directive

The Commission is proposing to repeal the Savings Tax Directive, as this text has since been overtaken by more ambitious EU legislation, which requires the widest scope of automatic information exchange on financial accounts, including savings related income (IP/13/530). Repealing the Saving Tax Directive will create a streamlined framework for the automatic exchange of financial information and will prevent any legal uncertainty or extra administration for tax authorities and businesses.

Next Steps

The two legislative proposals of this package will be submitted to the European Parliament for consultation and to the Council for adoption. Member States should agree on the Tax Rulings proposal by the end of 2015, so that it can enter into force on 1 January 2016. Given that the European Council in December 2014 called on the Commission to make this proposal, full political commitment on reaching a timely agreement should be expected.

The next milestone will be an Action Plan on Corporate Taxation which will be presented before the summer. This second Action Plan will focus on measures to make corporate taxation fairer and more efficient within the Single Market, including a re-launch of the Common Consolidated Corporate Tax Base (CCCTB) and ideas for integrating new OECD/G20 actions to combat base erosion and profit shifting (BEPS) at EU level.

More information

The Communication

The Proposal on automatic exchange of information

Memo/15/4609

Website

book coverLexis Guide to FATCA Compliance – 2015 Edition 

1,200 pages of analysis of the compliance challenges, over 54 chapters by 70 FATCA contributing experts from over 30 countries.  Besides in-depth, practical analysis, the 2015 edition includes examples, charts, time lines, links to source documents, and compliance analysis pursuant to the IGA and local regulations for many U.S. trading partners and financial centers.   The Lexis Guide to FATCA Compliance, designed from interviews with over 100 financial institutions and professional firms, is a primary reference source for financial institutions and service providers, advisors and government departments.  No filler of forms and regs – it’s all beef !  See Lexis’ order site and request a copy of the forthcoming 2015 edition – http://www.lexisnexis.com/store/catalog/booktemplate/productdetail.jsp?pageName=relatedProducts&prodId=prod19190327

A free download of the first chapter of the 2nd edition is available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2457671

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Tax Time Guide: Still Time to Contribute to an IRA for 2014

Posted by williambyrnes on March 18, 2015


IRS logo“Taxpayers still have time to contribute to an IRA for 2014 and, in many cases, qualify for a deduction or even a tax credit”, stated the IRS in this week’s newswire (50-IR-2015). (see 7 Tax Facts for Making IRA Contributions)

Available in one form or another since the mid-1970s, individual retirement arrangements (IRAs) are designed to enable employees and self-employed people to save for retirement. Contributions to traditional IRAs are often deductible, but distributions, usually after age 59½, are generally taxable. Though contributions to Roth IRAs are not deductible, qualified distributions, usually after age 59½, are tax-free. Those with traditional IRAs must begin receiving distributions by April 1 of the year following the year they turn 70½, but there is no similar requirement for Roth IRAs.

see 5 Tax Facts for Year End IRA

Most taxpayers with qualifying income are either eligible to set up a traditional or Roth IRA or add money to an existing account. To count for 2014, contributions must be made by April 15, 2015. In addition, low- and moderate-income taxpayers making these contributions may also qualify for the saver’s credit when they fill out their 2014 returns.

see Can an individual roll over or convert a traditional IRA or other eligible retirement plan into a Roth IRA?

Eligible taxpayers can contribute up to $5,500 to an IRA. For someone who was at least age 50 at the end of 2014, the limit is increased to $6,500. There’s no age limit for those contributing to a Roth IRA, but anyone who was at least age 70½ at the end of 2014 is barred from making contributions to a traditional IRA for 2014 and subsequent years.

The deduction for contributions to a traditional IRA is generally phased out for taxpayers covered by a workplace retirement plan whose incomes are above certain levels. For someone covered by a workplace plan during any part of 2014, the deduction is phased out if the taxpayer’s modified adjusted gross income (MAGI) for that year is between $60,000 and $70,000 for singles and heads of household and between $0 and $10,000 for married persons filing separately. For married couples filing a joint return where the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range for the deduction is $96,000 to $116,000. Where the IRA contributor is not covered by a workplace retirement plan but is married to someone who is covered, the MAGI phase-out range is $181,000 to $191,000.

see When Are IRA Funds Taxed?

The deduction for contributions to a traditional IRA is claimed on Form 1040 Line 32 or Form 1040A Line 17. Any nondeductible contributions to a traditional IRA must be reported on Form 8606.

Even though contributions to Roth IRAs are not deductible, the maximum permitted amount of these contributions is phased out for taxpayers whose incomes are above certain levels. The MAGI phase-out range is $181,000 to $191,000 for married couples filing a joint return, $114,000 to $129,000 for singles and heads of household and $0 to $10,000 for married persons filing separately. For detailed information on contributing to either Roth or traditional IRAs, including worksheets for determining contribution and deduction amounts, see Publication 590-A, available on IRS.gov.

see Recharacterizing Roth IRAs Smartly: Use Multiple Roths

Also known as the retirement savings contributions credit, the saver’s credit is often available to IRA contributors whose adjusted gross income falls below certain levels. For 2014, the income limit is $30,000 for singles and married persons filing separate returns, $45,000 for heads of household and $60,000 for married couples filing jointly.

Eligible taxpayers get the credit even if they qualify for other retirement-related tax benefits. Like other tax credits, the saver’s credit can increase a taxpayer’s refund or reduce the tax owed. The amount of the credit is based on a number of factors, including the amount contributed to either a Roth or traditional IRA and other qualifying retirement programs. Form 8880 is used to claim the saver’s credit, and its instructions have details on figuring the credit correctly.

see High-income clients able to fund Roth IRAs?

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts has been famous over 50 years.

Anyone interested can try Tax Facts Online risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

Posted in Retirement Planning | Tagged: , | Leave a Comment »

OECD Releases 9 Country Evaluations On Implementation of Exchange of Tax Information To Combat Tax Evasion   

Posted by williambyrnes on March 17, 2015


The Global Forum on Transparency and Exchange of Information for Tax Purposes released 9 peer review reports, including a Phase 1 Supplementary Report for Switzerland, demonstrating continuing progress toward implementation of the international standard for exchange of information on request.  read them at International Financial Law Prof Blog.

 

Posted in OECD | Tagged: , , , | Leave a Comment »

Commerzbank Admits to Sanctions and Money Laundering Violations, Will Pay $1.45 Billion Penalties! 

Posted by williambyrnes on March 17, 2015


“If for whatever reason CB New York inquires why our turnover has increase[d] so dramatically, under no circumstances may anyone mention that there is a connection to the clearing of Iranian banks!!!!!!!!!!!!!.”  Why did Commerzbank get off with only $1.45 billion in penalties when BNP paid nearly $9 billion for very similar conduct?  See International Financial Law Prof Blog

 

 

 

Posted in Compliance, Financial Crimes | Tagged: , | Leave a Comment »

Taxable or Not?

Posted by williambyrnes on March 16, 2015


9dc30-6a00d8341bfae553ef01bb07b43355970d-piAll income is taxable unless the law excludes it. Here are some basic rules you should know to help you file an accurate tax return:

  • Taxed income.  Taxable income includes money you earn, like wages and tips. It also includes bartering, an exchange of property or services. The fair market value of property or services received is taxable.

Some types of income are not taxable except under certain conditions, including:

  • Life insurance.  Proceeds paid to you because of the death of the insured person are usually not taxable. However, if you redeem a life insurance policy for cash, any amount that you get that is more than the cost of the policy is taxable.
  • Qualified scholarship.  In most cases, income from this type of scholarship is not taxable. This means that amounts you use for certain costs, such as tuition and required books, are not taxable. On the other hand, amounts you use for room and board are taxable.
  • State income tax refund.  If you got a state or local income tax refund, the amount may be taxable. You should have received a 2014 Form 1099-G from the agency that made the payment to you. If you didn’t get it by mail, the agency may have provided the form electronically. Contact them to find out how to get the form. Report any taxable refund you got even if you did not receive Form 1099-G.

Here are some types of income that are usually not taxable:

  • Gifts and inheritances
  • Child support payments
  • Welfare benefits
  • Damage awards for physical injury or sickness
  • Cash rebates from a dealer or manufacturer for an item you buy
  • Reimbursements for qualified adoption expenses

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts has been famous over 50 years.

Anyone interested can try Tax Facts Online risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

Posted in Taxation | Tagged: , | 1 Comment »

Calculating an Individual Shared Responsibility Payment

Posted by williambyrnes on March 11, 2015


9dc30-6a00d8341bfae553ef01bb07b43355970d-piThe individual shared responsibility provision in the Affordable Care Act calls for you and your dependents to have qualifying health care coverage for each month of the year, qualify for a health coverage exemption, or make an Individual Shared Responsibility Payment when filing your federal income tax return.

In general, the annual payment amount is the greater of a percentage of your household income or a flat dollar amount, but is capped at the national average premium for a bronze level health plan available through the Marketplace. You will owe 1/12th of the annual payment for each month you or your dependents don’t have either coverage or an exemption.

If you must make a payment, you can use the worksheets located in the instructions to Form 8965, Health Coverage Exemptions, to figure the shared responsibility payment amount due.

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts has been famous over 50 years.

Anyone interested can try Tax Facts Online risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

 

Posted in Uncategorized | Leave a Comment »

IRS’s Top Ten Identity Theft Prosecutions 

Posted by williambyrnes on March 10, 2015


International Financial Law Prof Blog.

Continuing its enforcement push against refund fraud and identity theft, the Internal Revenue Service announced this week (IR 2015-9dc30-6a00d8341bfae553ef01bb07b43355970d-pi37) the Top Ten Identity Theft Prosecutions for Fiscal Year 2014 (FY14).  The ongoing efforts to bring identity thieves to justice remains a significant priority as part of the IRS’s comprehensive identity theft strategy focusing on preventing, detecting and resolving identity theft cases as soon as possible.

Statistical Information

In fiscal year 2014, the IRS initiated 1,063 identity theft related investigations. Criminal Investigation enforcement efforts resulted in 748 sentencings as compared to 438 in FY 2013, an increase of 75 percent. The incarceration rate rose 7.1 percent to 87.7 percent. The courts also imposed more jail time in 2014, with the average months of those being sentenced rising to 43 months as compared to 38 months in FY 2013. The longest sentence was 27 years.

Enforcement Efforts

During FY 2014, Criminal Investigation dedicated significant time and resources to bringing down identity thieves attempting to defraud the federal government.

The nationwide Law Enforcement Assistance Program provides for the disclosure of federal tax return information associated with the accounts of known and suspected victims of identity theft with the express written consent of those victims. There are now more than 755 state/local law enforcement agencies from 47 states participating. Since the start of the program, more than 6,776 requests were received from state and local law enforcement agencies.

The Identity Theft Clearinghouse (ITC) continues to develop and refer identity theft refund fraud schemes to CI Field Offices for investigation. Since its inception in FY 2012, it has received over 7,600 individual identity theft leads. These leads involved approximately 1.47 million returns with over $6.8 billion in refunds claimed.

CI continues to be the lead agency that investigates identity theft and is actively involved in more than 78 multi-regional task forces or working groups including state, local and federal law enforcement agencies solely focusing on identity theft.  CI has one of the highest conviction rates in all of federal law enforcement — at 93.4% — and is the only federal law enforcement agency with jurisdiction over federal tax crimes.  CI is routinely called upon to be the lead financial investigative agency on a wide variety of financial crimes including international tax evasion, identity theft and transnational organized crime.

“Identity theft is a crime that carries significant consequences, and these cases send a warning to criminals,” said Richard Weber, Chief, IRS-Criminal Investigation. “Our top 10 cases represent the seriousness of these crimes and the magnitude of the consequences that will be faced by those who victimize honest taxpayers and steal from hard-working Americans.”

Top Ten Identity Theft Cases

read about the top 10 at International Financial Law Prof Blog.

Posted in Uncategorized | Leave a Comment »

Distance Learning for Legal Education March 12-14 (Thursday – Saturday) in San Fran

Posted by williambyrnes on March 4, 2015


Register without delay (and without cost) for the Distance Learning for Legal Education workgroup next week (March 12-14, Thursday – Saturday) in exciting San Fran.

Ashley Dymond (Hastings) and Gary Heald (Georgetown) have accomplished an extraordinary job of designing the agenda, graciously hosted by Hastings College of Law in San Fran.  This is the Work Group’s 8th gathering as a distinct workgroup since 2011, and 14th including 2010’s Future Eds and AALS.

Why should a Dean approve a travel budget for this workgroup?  The American Bar Association initially acquiesced to an online LL.M. in 1998.  Yet, it is since the initial inception of the Work Group in 2010 that most of the 47 LL.M.s offered online by 29 ABA full approved law schools have been founded.  As of 2015, a majority of ABA law schools offer the opportunity for an online academic experience for J.D. students.  One ABA law school has received a variance to offer a hybrid, partially residential / partially online, JD.

Who attends?  Deans, Administrators, and Faculty from at least 83 ABA law schools and other stakeholders, such as foreign and U.S. academic institutions, publishers, and technology companies, have attended.  Normally between 50 – 75 per workshop, and 100 for the AALS breakfasts.

What is the deliverable for a Dean?  Guaranteed, collaborative engagement in discussions, writing, and editing that create the attached Work Group’s recommendations.  These best practice recommendations have been designed to adoptable by institutions and stakeholders through their adaptability and will form a component of a Distance Education policy. Everyone becomes a contributor, hence the name “work group”.  Attendees become the leader of the distance education pedagogical and policy discussions at home institutions.

There is no fee – but the host Hastings needs an RSVP for food and beverage.  Thus, please register by Thursday March 5th for the headcount – everything you need to know about location, transportation, accommodation is on the website.

Effectiveness of Distance Learning for Legal Educationhttp://ssrn.com/author=339796 

Much obliged for you to share this workshop with your colleagues – William Byrnes

Posted in Courses, Education Theory | Tagged: | Leave a Comment »

International Financial Law Blog headlines

Posted by williambyrnes on March 3, 2015


FATF Action on Terrorist Finance

The ISIL phenomenon shows a new type of terrorist organisation with unique funding streams that are crucial to its activities; cutting off this financing is therefore critically important.
Three Swiss bankers face U.S. obstruction charges in tax case and soon extradition

Roger Keller, a onetime client adviser in Zurich at Wegelin & Co, was one of three bankers at the now-defunct Swiss private bank charged in a 2012 indictment in New York federal court for helping U.S. taxpayers hide more than $1.2 billion in assets.
Anti Trust Division 2014 Total in Criminal Fines Collected

The Department of Justice collected $1.861 billion in criminal fines and penalties resulting from Antitrust Division prosecutions in the fiscal year that ended on Sept. 30, 2014. The Department of Justice collected $1.861 billion in criminal fines and penalties resulting…
FinCEN Launches Web page to Assist FBAR Filers

FinCEN has launched a Web page to assist those individuals and institutions required to file a Report of Foreign Bank Account (FBAR).
New Roth 401(k) Rollovers Maximize After-Tax Contribution Value

While the non-Roth after-tax contribution option offered wealthy clients a way to increase their 401(k) account values in the past, it did little to mitigate the current or future tax bite. The increasingly widespread availability of in-plan Roth 401(k) rollovers, however, has changed the retirement income planning landscape, creating new opportunities for higher income clients who wish to truly maximize their 401(k) contributions using after-tax dollars.
How Does HSBC Group CEO Avoid Paying UK Tax ?

Non-dom status can confer several tax advantages on those who claim the status compared with those domiciled in the UK. These include advantages in how inheritance tax is applied, but can also exempt worldwide income earned from outside the UK from incurring UK taxes – a system known as the remittance basis.
SEC to Target Deals Giving Visas to Rich Foreign Investors

Bloomberg reported that — The SEC is preparing sanctions against as many as two dozen immigration lawyers, people familiar with the matter said, for collecting deal fees from foreign investors trying to access the EB-5 visa program, which grants U.S….

85th Country Signs Up For Global FATCA (Automatic Tax Information Exchange)

The Seychelles became the 85th signatory of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

Will a New Fiduciary Standard Fix the Advisor-Client Conflict of Interests for Retirement Accounts?

A retiree who receives conflicted advice when rolling over a 401(k) balance to an IRA at retirement will lose an estimated 12 percent of the value of his or her savings if drawn down over 30 years. If a retiree receiving conflicted advice takes withdrawals at the rate possible absent conflicted advice, his or her savings would run out more than 5 years earlier.
Overcoming Sequence of Return Risk in Retirement Income

Sequence of return risk is one of these critical, yet too often overlooked, decumulation-stage issues that can make or break your client’s retirement income withdrawal strategy—luckily, this type of risk can often be diminished by incorporating annuities into the mix, safeguarding the client’s retirement resources in the process.
February FATCA Updates: GIINs and IDES

On 1 February, the IRS published its second 2015 FATCA GIIN list of “approved FFIs” (a list of the financial firms that have registered on the IRS FATCA portal). This is the analysis of that list.
Longevity Pegged Annuities – What CPAs Need to Know About the New Rules

The Treasury Department made sparks fly when it recently issued final regulations governing qualified longevity annuity contracts (QLAC).

Posted in Uncategorized | Leave a Comment »

Obtaining and Claiming a Health Coverage Exemption

Posted by williambyrnes on March 2, 2015


In its 9th Health Care Tax Tip, the IRS emphasized how a taxpayer may obtain and claim exemption from health care coverage required by law under the 9dc30-6a00d8341bfae553ef01bb07b43355970d-piAffordable Care Act (Obama Care).  The Affordable Care Act requires you and each member of your family to have minimum essential coverage, qualify for an insurance coverage exemption, or make an individual shared responsibility payment when you file your federal income tax return.

If a taxpayer meets certain criteria, then the taxpayer may claim to be exempt from the requirement to have “qualifying health coverage”.  If the taxpayer is found to be exempt, then the taxpayer will not have to pay the tax penalty called a “shared responsibility payment” when filing the 2014 federal income tax return.  But for any month that the taxpayer does not qualify for the exemption, then the taxpayer will need to have minimum essential coverage for that month or pay a month’s worth of penalty.

A taxpayer may seek exemption from coverage depending upon the type of exemption for which the taxpayer may be eligible.  A taxpayer can obtain some exemptions only from the Health Care Marketplace, while others exemptions may be claimed when filing the annual tax return.

A taxpayer may be exempt if:

  • The minimum amount for the annual premium is more than eight percent of the taxpayer’s household income
  • The Taxpayer has a gap in coverage that is less than three consecutive months
  • A taxpayer may qualify for an exemption for one of several other reasons, including having a hardship that prevents the taxpayer from obtaining coverage, or belonging to a group explicitly exempt from the requirement

A taxpayer must claim or report coverage exemptions on Form 8965, Health Coverage Exemptions, and attach it to Form 1040, Form 1040A, or Form 1040EZ.

Health Care Marketplace Exemption Certificate Number If a coverage exemption is granted from the Health Care Marketplace, then the Market Place will send a notice with a unique Exemption Certificate Number (ECN).  The taxpayer must enter the ECN in Part I, Marketplace-Granted Coverage Exemptions for Individuals, of Form 8965 in column C.  If the Marketplace has not sent the ECN before a taxpayer files a tax return, then the taxpayer must complete Part I of Form 8965 and enter “pending” in Column C for each person listed.

If a taxpayer claims the exemption on the tax return, then the taxpayer does not need an ECN from the Marketplace.  With the tax filing season underway, most exemptions for 2014 are only available by claiming them on the tax return.

If the taxpayer’s income is below the tax filing threshold and thus the taxpayer is not required to file a tax return, then the taxpayer is eligible for an exemption and does not have to file a tax return to claim it.  But if the taxpayer chooses to file a tax return, the taxpayer must use Part II, Coverage Exemptions for Your Household Claimed on Your Return, of Form 8965 to claim a health coverage exemption.

Other IRS-granted coverage exemptions may be claimed on your tax return using Part III, Coverage Exemptions for Individuals Claimed on Your Return, of Form 8965.

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts has been famous over 50 years.

Anyone interested can try Tax Facts Online risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

Posted in Taxation | Tagged: , , , | Leave a Comment »

United Capital Expands $2B Through Hiring

Posted by williambyrnes on February 27, 2015


read about United Capital’s hiring strategy, reported on by Investment News Service – on the International Financial Law Prof Blog

 

Posted in Wealth Management | Tagged: | Leave a Comment »

Byrnes and Perryman’s Analysis of the FATCA GIIN Lists June 2014 – February 2015 | Kluwer International Tax Blog

Posted by williambyrnes on February 25, 2015


Byrnes and Perryman’s Analysis of the FATCA GIIN Lists June 2014 – February 2015 | Kluwer International Tax Blog.

Since the publication of the U.S. Treasury’s original GIIN list 1 June 2014, HaydonPerryman (FATCA systems designer for several tier 1 financial institutions) and I (primary author, Lexis Guide to FATCA Compliance) have been analyzing on a monthly basis the list that the USA provides of “approved FFIs” (foreign financial institutions). On 1 February, the IRS published its second 2015 FATCA GIIN list of “approved FFIs” (a list of the financial firms that have registered on the IRS FATCA portal). Global FFI Registration has reached 153,797.

  • But from what countries are these registrations?
  • Are these DCFFI registrations or PFFIs?
  • Which countries are leading in the registration compliance and which are lagging?
  • Has FFI registration growth by country and region been measured over the past eight months?

Wolters Kluwer has published our complete analysis on the International Tax Law blog.

Posted in FATCA | Tagged: | Leave a Comment »

IRS Checklist of Credits and Deductions for Children

Posted by williambyrnes on February 25, 2015


In Tax Tip 2015-14, the IRS discussed the potential reduction of the amount of taxes owed for a year that tax credits and deductions associated with children may provide to the parents.

9dc30-6a00d8341bfae553ef01bb07b43355970d-pi

• Dependents.  In most cases, a taxpayer can claim a child as a dependent.  For each dependent, the taxpayer may deduct $3,950 from taxable income.  However, for high income taxpayers, the amount of allowed deduction decreases.

• Child Tax Credit.  A taxpayer may be able to claim the Child Tax Credit for each of the qualifying children under the age of 17. The maximum credit is $1,000 per child.  However, if a taxpayer receives less than the full amount of the Child Tax Credit, then the taxpayer may be eligible for the “Additional Child Tax Credit”.

• Child and Dependent Care Credit. A taxpayer may be able to claim this credit if the taxpayer paid for the care of one or more qualifying persons. Dependent children under age 13 are among those who qualify.  The care must be paid for so that the taxpayer could work or could look for work.

• Earned Income Tax Credit (EITC).  If in 2014 a taxpayer earned less than $52,427 from work, the taxpayer may qualify for the EITC.  The EITC may be worth as much as $6,143.  The EITC is available regardless of whether the taxpayer has children.

• Adoption Credit.  A taxpayer may be eligible to claim a tax credit for certain costs paid for adoption of a child.

• Education tax credits.  An education credit can help a taxpayer with the cost of higher education.  There are two credits that are available. The American Opportunity Tax Credit and the Lifetime Learning Credit may both reduce the amount of tax owed.

If the credit reduces the tax owed to less than zero, the taxpayer may receive a refund of the extra amount.  Even if the taxpayer does not owe any taxes for the year, the taxpayer may still qualify.

• Student loan interest.  A taxpayer may be able to deduct interest paid on a qualified student loan.  This benefit is available even for taxpayers that do not itemize tax deductions.

• Self-employed health insurance deduction.  If a taxpayer was self-employed in 2014 and paid for health insurance, then the taxpayer may be able to deduct premiums paid during the year. This may include the cost to cover children under age 27, even if they are not claimed as a dependent!

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts has been famous over 50 years.

Anyone interested can try Tax Facts Online risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

Posted in Taxation | Tagged: , , , , , | Leave a Comment »

Are My Tips Taxable?

Posted by williambyrnes on February 23, 2015


9dc30-6a00d8341bfae553ef01bb07b43355970d-piThe IRS disclosed certain tax tips in a recent publication (2015-13) that may help a taxpayer file and report “tip” income correctly.

• Show all tips on the 1040 tax return.  All tips received during a calendar year must be added up and included on the federal tax return.  This even includes the value of tips that are not in cash.  Examples of non-cash tips include items such as tickets, passes or other items when provided by a customer for work or service.

• All tips are taxable.  Tips paid directly by a customer and tips added by a customer to a credit card are both to be included in taxable income. As well, tips received under a tip-splitting agreement with other employees, such as in a restaurant, are to be included.

• Report tips to the employer.  If an employee receives $20 or more in tips in any one month, the employee must report the tips for that month to the employer.  Tips reported to the employer include cash, check and credit card tips but does not include the value of any noncash tips.  The employer must withhold federal income, Social Security and Medicare taxes on these reported tips.

Daily tip log.  Use the IRS’ Publication 1244, Employee’s Daily Record of Tips and Report to Employer, to record your tips.

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts has been famous over 50 years.

Anyone interested can try Tax Facts Online risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

Posted in Taxation | Tagged: , | Leave a Comment »

Working Group for Distance Learning in Legal Education Spring 2015 Meeting Hosted by Hastings

Posted by williambyrnes on February 17, 2015


Download BestPracticeRecommendationsforDistanceLearningforLegalEducation 2015 (or contact williambyrnes@gmail.com)

Dates: Thursday, March 12, 2015 at 12:00PM – Saturday, March 14, 2015 at 12:00PM (PST) < Register Here >

Location: UC Hastings College of the Law (Sky Room – 100 McAllister Street, San Francisco, CA, 94102)

The Working Group for Distance Learning in Legal Education is a loosely structured alliance of law educators collaborating to provide increased opportunities for faculty, students, and other participants to access high quality, innovative, and interactive online legal education.

Officially organized in November 2011, the Working Group is an outgrowth of the Program for the Legal Profession’s Future Ed Series. To date, the Working Group has focused on three major priorities:

  1. Providing model policies and information for law schools engaged in distance learning programs.
  2. Developing recommended practices and standards for emerging distance learning programs in legal education.
  3. Providing comments and policy recommendations for accreditation bodies that regulate distance learning in legal education, including the American Bar Association.

Members of the Working Group meet three times a year, with substantive meetings in the fall and spring, and an update gathering at the American Association of Law Schools annual meeting in January. Membership is open to academics and professionals associated with accredited law schools in the U.S., and others working in the distance learning field concerned with legal education are welcome to attend meetings and participate, as appropriate, in Working Group matters.

Please contact Ashley Dymond for further information at dymonda@uchastings.edu or < Register Here >

Posted in Education Theory | Tagged: , | Leave a Comment »

TJSL Hosted Moscow State University Professors and Students | Thomas Jefferson School of Law

Posted by williambyrnes on February 13, 2015


TJSL Hosted Moscow State University Professors and Students | Thomas Jefferson School of Law.

Posted in Uncategorized | Leave a Comment »

Longevity Pegged Annuities – What’s Changed With The Final Regulations

Posted by williambyrnes on February 12, 2015


Nysscpa-site-logo

 

Longevity Pegged Annuities – What CPAs Need to Know About the New Rules (William Byrnes & Robert Bloink)

The Treasury Department made sparks fly when it recently issued final regulations governing qualified longevity annuity contracts (QLAC).

read the full story at CPA Journal of the New York Society of Certified Public Accountants http://viewer.zmags.com/publication/8df8c3b9#/8df8c3b9/66

Posted in Financial, Retirement Planning | Tagged: , | Leave a Comment »

Two Powerhouses Announce Joint International Tax LLM

Posted by williambyrnes on January 27, 2015


Logo Starting September 2015, University of Amsterdam will offer an Advanced LL.M. of International Taxation in English, limited to just 25 annual candidates from around the world.  Applications for one of these seats are open until April.

Renown international tax academic and lawyer Dr. Dennis Weber shared with the Financial Law Prof: “The Advanced LL.M. of International Tax Lawis a full-time, one-year program.  The curriculum covers both the established framework of international tax law and emerging issues. A fundamental premise is that a proper understanding of this area of the law requires studying both the “big picture” and the technicalities.”

Weber-dennis-hoogleraar-fdr-fotograaf-gerth-van-roden-web“Moreover”, he continued, “the OECD BEPS project is on every tax counsel’s mind, and such discussions normally involve The Netherlands because, as a business friendly jurisdiction for fifty years, it has attracted multinational operations, employment and tax revenue using a ‘carrot’ policy.  Other countries are competing for multinationals’ operations, employment and tax revenue with a ‘stick’ policy of imposing high compliance costs to dissuade international activities.  The next five years will be an interesting time as the G20 goes head to head to try to peel away these operations and tax revenue from each other.”

“The IBFD is very excited about joining forces with the University of Amsterdam to create an LLM with a teaching programme that is based firmly on the research activities of both institutions and offers a combined theoretical and practical analysis of international tax law.” elaborated Prof. Dr Pasquale Pistone, Chair of the IBFD’s Academic Committee.

“There has never been a more exciting time to study international tax law than now” continued Dr. Joanna Wheeler, “the topic is firmly on the public agenda and you can see the whole field developing before your eyes just by reading the news.”

“I am delighted that the longstanding relationship between the UvA and IBFD has resulted in such a promising LLM programme, a programme that takes a holistic and policy-oriented view to taxation and that perfectly fits the current era.” said Prof. Dr Stef van Weeghel.  Dr. Weber added, “Studying international tax law in one of the most relaxed cities in the world: a perfect combination.”

Prof. William Byrnes iterated “Dr. Dennis Weber has developed a game changer in Europe with his international tax program, combining the academic quality of University of Amsterdam with the industry reputation of the IBFD.”

Learn more about international students studying in Amsterdam via YouTube

 

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IRS Provides Obamacare Relief With Removal of Tax Penalties for Advanced Premium Tax Credit Payment

Posted by williambyrnes on January 27, 2015


Notice 2015-09 provides limited relief for taxpayers who have a balance due on their 2014 income tax return as a result of reconciling advance payments of the premium tax credit against the premium tax credit allowed on the tax return.

9dc30-6a00d8341bfae553ef01bb07b43355970d-piThis Notice provides limited relief for taxpayers who have a balance due on their 2014 income tax return as a result of reconciling advance payments of the premium tax credit against the premium tax credit allowed on the tax return. Specifically, this Notice provides relief from the penalty under § 6651(a)(2) of the Internal Revenue Code for late payment of a balance due and the penalty under § 6654(a) for underpayment of estimated tax. To qualify for the relief, taxpayers must meet certain requirements.  This relief applies only for the 2014 taxable year.

This relief does not apply to any underpayment of the individual shared responsibility payment resulting from the application of § 5000A because such underpayments are not subject to either the § 6651(a)(2) penalty or the §6654(a) penalty.

A taxpayer may receive assistance in paying premiums for coverage in a qualified health plan through advance payments of the premium tax credit. Advance credit payments are made directly to the insurance provider. The amount of the advance credit payments is determined when an individual enrolls in a qualified health plan through an Exchange and is based on projected household income and family size for the year of coverage. A taxpayer claims the premium tax credit on the income tax return for the taxable year of coverage. The amount of the credit is based on actual household income an family size for the year reflected on the tax return. Under § 36B(f)(2) and § 1.36B- 4(a)(1)(i) of the Income Tax Regulations, a taxpayer must reconcile, or compare, the amount of premium tax credit allowed on the tax return with advance credit payments.

Changes in the circumstances on which the advance credit payments are based could result in a difference between the amount of advance credit payments and the premium tax credit to which the taxpayer is entitled. If advance credit payments are more than the premium tax credit allowed on the return, the difference (excess advance payments) is treated as additional tax and may result in either a smaller refund or a larger balance due (or, if the premium tax credit allowed is more than the advance credit payments made, the excess credit amount may result in a larger refund or lower balance due).

Taxable year 2014 is the first year for which taxpayers will be required to reconcile advance credit payments with the premium tax credit.

The Service will abate the § 6651(a)(2) penalty for taxable year 2014 for taxpayers who (i) are otherwise current with their filing and payment obligations; (ii) have a balance due for the 2014 taxable year due to excess advance payments of the premium tax credit; and (iii) report the amount of excess advance credit payments on their 2014 tax return timely filed, including extensions (Line 46 of Form 1040 or Line 29 of Form 1040A).

Further, the Service will waive the § 6654 penalty for taxable year 2014 for an underpayment of estimated tax for taxpayers who have an underpayment attributable to excess advance credit payments if the taxpayers (i) are otherwise current with their filing and payment obligations; and (ii) report the amount of the excess advance credit payments on a 2014 tax return timely filed, including extensions.

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FINRA Changes Regulatory Priorities – Pushing “Best Interest of Client” in 2015 Over “Suitability Standard”

Posted by williambyrnes on January 26, 2015


read about it on International Financial Law Prof Blog

Posted in Compliance | Tagged: | Leave a Comment »

What’s WIth the Offshore Voluntary Disclosure Program’s “Non-Willful” Narratives?

Posted by williambyrnes on January 26, 2015


International Financial Law Prof Blog

the IRS’s 2015 versions of the two streamlined procedures OVDP forms (Form 14653 and Form 14654) require taxpayers to “provide a “narrative statement of facts” explaining their failure to disclose their offshore assets, or the agency …. read about it on International Financial Law Prof Blog

 

Posted in FATCA | Tagged: , | Leave a Comment »

Is Insider Trading Still a Crime after U.S. v Newman?

Posted by williambyrnes on January 26, 2015


read about it at International Financial Law Prof Blog and download the case.

Citing U.S. v. Newman, judge throws out insider trading guilty pleas over IBM deal, more insider trading cases expected to be dropped ….

 

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Premium Tax Credit Brings Changes to Your 2014 Income Tax Returns

Posted by williambyrnes on January 26, 2015


When filing your 2014 federal income tax return, you will see some 457c5-6a00d8341bfae553ef01b7c7029b32970b-pichanges related to the Affordable Care Act. Millions of people who purchased their coverage through a health insurance Marketplace are eligible for premium assistance through the new premium tax credit, which individuals chose to either have paid upfront to their insurers to lower their monthly premiums, or receive when they file their taxes. When you bought your insurance, if you chose to have advance payments of the premium tax credit, the Marketplace estimated the amount based on information you provided about your expected household income and family size for the year.

If you received the benefit of advance credit payments, you must file a federal tax return and reconcile the advance credit payments with the actual premium tax credit you are eligible to claim on your return.  You will use IRS Form 8962Premium Tax Credit (PTC) to make this comparison and to claim the credit. If your advance credit payments are in excess of the amount of the premium tax credit you are eligible for, based on your actual income, you must repay some or all of the excess when you file your return, subject to certain caps.

If you purchased your coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement from your Marketplace. You should receive this form by early February.

Form 1095-A will provide the information you need to file your taxes, including the name of your insurance company, dates of coverage, amount of monthly insurance premiums for the plan you and other members of your family enrolled in, amount of any advance payments of the premium tax credit for the year, and other information needed need to compute the premium tax credit.

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts is famous.

Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction.  Call 1-800-543-0874.

Posted in Taxation | Tagged: , | Leave a Comment »

The FDIC Wants to Sell You a Failing Bank – Interested?

Posted by williambyrnes on January 20, 2015


The FDIC has opened an online market place to dispose of failing banks — read about it at International Financial Law Prof Blog.

The ability to bid applies to FDIC-insured financial institutions of any size that may be interested in acquiring a failing institution from the FDIC.

Posted in Compliance, Wealth Management | Tagged: | Leave a Comment »

Welcome this week from University of Amsterdam Centre for Tax Law

Posted by williambyrnes on January 19, 2015


Logo_uva1 Welcome from Amsterdam !  Each year the Amsterdam Centre for Tax Law (of the University of Amsterdam Law Faculty) organizes its Winter Course on International Tax Law.

This year theme is “Tax treaty application“.  The Winter Course on International Tax Law focuses on the practical problems of tax treaty application. It aims at bringing the participants’ knowledge up-to-date with recent OECD developments, major issues on tax treaty interpretation, as well as relevant case-law on tax treaties around the world.

Prof. Dennis Weber, Director of the ACTL,  has assembled a leading program faculty including Prof. Peter Watel(UvA) (who lectured me at a UvA tax student 23 year ago); Prof. Hein Vermeulen (UvA/PwC);  Prof. Stef van Weeghel (UvA/PwC); Prof. Bruno De Silva (UvA); Prof. Otto Marres (UvA/KPMG); Prof. Joanna Wheeler(IBFD/UvA); Jasper Arendse (Directorate of International Affairs Dutch Ministry of Finance); Melinda Brown (OECD); and myself, Prof. William Byrnes.

My topic examines the protocols, mechanisms and expanding scope of information exchange via bilateral and multilateral agreements.  FATCA, OECD CRS and Global Initiatives, EU Expanded Savings Directive EOI, TIEAs fall within this topic, as well as tax certification forms and validation, data collection, discernment and distribution.

The Amsterdam Centre for Tax Law (ACTL) is the tax law research centre of the University of Amsterdam. ACTL members conduct research into various subjects of tax law, with a strong emphasis on Corporate Taxation, International Tax Law and European Tax Law.

Posted in Courses, FATCA, information exchange, international taxation | Tagged: | Leave a Comment »

Federal Government After Decades Tries To Stop Local Authorities From Profiting on Asset Seizure Abuse Justified by Federal Law (But What About State Abuse)?

Posted by williambyrnes on January 19, 2015


Read the Notice sent to State Enforcement today, and links of previous coverage of this issue – at http://lawprofessors.typepad.com/intfinlaw/2015/01/federal-government-after-decades-tries-to-stop-local-authorities-from-profiting-on-asset-seizure-abu.html

 

01701_11_1_coverUse your Lexis subscription to access LexisNexis’ Money Laundering, Asset Forfeiture and Recovery and Compliance: A Global Guide – This treatise by William Byrnes with commentary and analysis of hundreds of AML experts from over 100 countries,  is designed to provide the compliance officer accurate analyses of the AML/CTF Financial and Legal Intelligence, law and practice in the nations of the world with the most current references and resources. This multi-volume treatise is organized around five main themes: 1. Money Laundering Risk and Compliance; 2. The Law of Anti-Money Laundering and Compliance; 3. Criminal and Civil Forfeiture; 4. Compliance and 5. International Cooperation.  As these unlawful activities can occur in any given country, it is important to identify the international participants who are cooperating to develop methods to obstruct these criminal activities.

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Luxembourg’s Amazon Deal is State Aid Because of Lack of Diligence, EU Commission Preliminary Conclusion

Posted by williambyrnes on January 16, 2015


EU Commission Will Calculate State Aid via a Transfer Pricing Audit of the Difference of the Ruling from an Arm’s Length Benchmark – See today’s decision links and analysis in article)

decision and analysis with links available at  http://lawprofessors.typepad.com/intfinlaw/2015/01/luxembourgs-amazon-deal-is-state-aid-because-of-lack-of-diligence-eu-commission-preliminary-conclusi.html

(78) While tax rulings that merely contain an interpretation of the relevant tax provisions without deviating from administrative practice do not give rise to a presumption of a selective advantage, rulings that deviate from that practice have the effect of lowering the tax burden of the undertakings concerned as compared to undertakings in a similar legal and factual situation. To the extent the Luxembourgish authorities have deviated from the arm’s length principle as regards the contested tax ruling, the measure should also be considered selective.

(79) Since the contested tax ruling fulfils all four conditions under Article 107(1) TFEU, the Commission takes the view, at this stage, that it constitutes State aid within the meaning of that provision.

 

practical_guide_book

Lexis’ Practical Guide to U.S. Transfer Pricing (2015), 28 chapters from 50 expert contributors (3,000 pages) led by international tax Professor William Byrnes,  is designed to help multinationals cope with the U.S. transfer pricing rules and procedures, taking into account the international norms established by the Organisation for Economic Co-operation and Development (OECD). It is also designed for use by tax administrators, both those belonging to the U.S. Internal Revenue Service and those belonging to the tax administrations of other countries, and tax professionals in and out of government, corporate executives, and their non-tax advisors, both American and foreign.

Posted in international taxation, Transfer Pricing | Tagged: , , | Leave a Comment »

Tax Season: Ready, Set, Go !

Posted by williambyrnes on January 16, 2015


IRS Starts 2015 Tax Season; Free File Opens Today, 

IRS YouTube Videos:

9dc30-6a00d8341bfae553ef01bb07b43355970d-piThe nation’s 2015 tax filing season begins today and a growing array of online services is available to assist taxpayers.  Understanding the Affordable Care Act and how this impacts a taxpayer will be a popular feature this year.

Taxpayers have until Wednesday, April 15, 2015 to file their 2014 tax returns and pay any tax due. The IRS expects to receive about 150 million individual income tax returns this year. Like each of the past three years, more than four out of five returns are expected to be filed electronically.

The IRS Free File program, available at IRS.gov, will open Friday for taxpayers, and the IRS will begin accepting and processing all tax returns on Tuesday, Jan. 20.

This year’s return will include new questions to incorporate provisions of the Affordable Care Act (or ACA). The majority of taxpayers – more than three out of four – will simply need to check a box to verify they have health insurance coverage. For the minority of taxpayers who will have to do more, www.IRS.gov/aca features useful information and tips regarding the premium tax credit, the individual shared responsibility requirement and other tax features of the ACA.

“Our employees will be working hard again this season to help the nation’s taxpayers,” IRS Commissioner John Koskinen said. “We encourage people to use the tools and information available on IRS.gov, particularly given the long wait times we anticipate on our phone lines. As always, taxpayers can benefit by filing electronically.”

Koskinen announced that taxpayers can begin preparing their returns using the Free File system on Friday, Jan. 16. Available only at IRS.gov, Free File offers two filing options:

• Brand-name software, offered by IRS’ commercial partners to about 100 million individuals and families with incomes of $60,000 or less; or

• Online fillable forms, the electronic version of IRS paper forms available to taxpayers at all income levels and especially useful to people comfortable with filling out their own returns.

E-file, when combined with direct deposit, is the fastest way to get a refund. More than three out of four refund recipients now choose direct deposit. People who e-file make fewer mistakes, and it costs nothing for those who choose Free File.  In all, 14 software companies will be participating in this year’s Free File program.

Taxpayers who purchase their own software can also choose e-file, and most paid tax preparers are now required to file their clients’ returns electronically. In addition to Free File, commercial software companies also are currently available for taxpayer use.

The IRS will begin accepting and processing all returns – whether e-file, Free File or paper tax returns — on Jan. 20.

Like last year, the IRS expects to issue more than nine out of 10 refunds within 21 days. Again, the fastest way to get a refund is to e-file and choose direct deposit. It takes longer to process paper returns, it will likely take an additional week or more to process paper returns meaning that those refunds are expected to be issued in seven weeks or more.

Health Care Basics

The Affordable Care Act requires that a taxpayer and each member of their family either has qualifying health insurance coverage for each month of the year, qualifies for an exemption , or makes an individual shared responsibility payment when filing their federal income tax return.  Some moderate-income taxpayers may also qualify for financial assistance to help cover the cost of health insurance purchased through the Health Insurance Marketplace. Taxpayers will fall into one or more of the following categories:

• Check the box. Most taxpayers will simply check a box on their tax return to indicate that each member of their family had qualifying health coverage for the whole year. No further action is required.

Qualifying health insurance coverage includes coverage under most, but not all, types of health care coverage plans. Taxpayers can use the chart on IRS.gov/aca to find out if their insurance counts as qualifying coverage.

• Exemptions. Taxpayers may be eligible to claim an exemption from the requirement to have coverage.  Eligible taxpayers need to complete the new IRS Form 8965, Health Coverage Exemptions, and attach it to their tax return.  Taxpayers must apply for some exemptions through the Health Insurance Marketplace. However, most of the exemptions are easily obtained from the IRS when filing a return.

• Individual Shared Responsibility Payment. Taxpayers who do not have qualifying coverage or an exemption for each month of the year will need to make an individual shared responsibility payment with their return for choosing not to purchase coverage. Examples and information about figuring the payment are available on the IRS Calculating the Payment page.

• Premium Tax Credit.  Taxpayers who bought coverage through the Health Insurance Marketplace should receive Form 1095-A, Health Insurance Marketplace Statement, from the Marketplace by early February. This form should be saved because it has important information needed to complete a tax return.

If the Form 1095-A is not received by early February, contact the Marketplace where coverage was purchased. Do not contact the IRS because IRS telephone assistors will not have access to this information.

Taxpayers who benefited from advance payments of the premium tax credit must file a federal income tax return. These taxpayers need to reconcile those advance payments with the amount of premium tax credit they’re entitled to based on their actual income. As a result, some people may see a smaller or larger tax refund or tax liability than they were expecting.  Use IRS Form 8962, Premium Tax Credit (PTC), to calculate the premium tax credit and reconcile the credit with any advance payments.

The IRS also reminded taxpayers that a trusted tax professional can also provide helpful information about the health care law. A number of tips about selecting a preparer and national tax professional groups is available on IRS.gov.

The IRS urges all taxpayers, especially those claiming the premium tax credit, to make sure they have all their year-end statements in hand before they file their return. This includes Forms W-2 from employers, Forms 1099 from banks and other payers, and, for those claiming the premium tax credit, and Form 1095-A from the Marketplace. Doing so will help avoid refund delays and the need to file an amended return later.

Tax Facts on Individuals & Small Business

2014_tf_on_individuals_small_businesses-m_1Due to a number of recent changes in the law, taxpayers are currently facing many questions connected to important issues such as healthcare, home office use, capital gains, investments, and whether an individual is considered an employee or a contractor.  Financial advisors are continually looking for competitive information to help them provide the best answers for their clients and to obtain new clients.  National Underwriter’s Tax Facts series is the only resource written specifically for the financial advisor and producer providing fast, clear, and authoritative answers to pressing questions, and it does so in the convenient, timesaving, Q&A format for which Tax Facts is famous.

Anyone interested can try Tax Facts on Individuals & Small Business, risk-free for 30 days, with a 100% guarantee of complete satisfaction.  For more information, please call 1-800-543-0874.

Posted in Taxation, Uncategorized | Leave a Comment »

 
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