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William Byrnes (Texas A&M) tax & compliance articles

Archive for October, 2014

Heads of Tax Administration agree global tax actions

Posted by William Byrnes on October 27, 2014


OCDE_10cm_4c

The OECD/G20 Base Erosion and Profit Shifting (BEPS) Project and the move to automatic exchange of financial account information took centre stage when Heads of Tax Administration met on 23-24 October in Dublin, Ireland.  The FTA is the leading international body concerned with tax administration, bringing together the heads of tax administrations from the OECD, members of the G20 and large emerging economies.

More than forty delegations participated in the Ninth Meeting of the OECD Forum on Tax Administration (FTA) and agreed that ever greater co-operation will be necessary to implement the results of the BEPS project and automatic exchange of information.

Specifically they agreed:

  • A strategy for systematic and enhanced co-operation between tax administrations;
  • To invest the resources needed to implement the new standard on automatic exchange of information; and
  • To improve the practical operation of the mutual agreement process.

The communiqué released at the close of the meeting contains more details and contains links to the following publications that have just been released by the FTA:

Excerpted from the communiqué:  To support the implementation of these global initiatives, while improving service levels and operational efficiency, we as Commissioners with responsibility for tax administration and compliance management must work ever more closely together, share our knowledge, co-ordinate our actions and deal with tax administration aspects that may result from the BEPS work. Recognising the support of G20 Finance Ministers for further “co-ordination and collaboration by tax administrations on compliance activities on entities and individuals involved in cross border tax arrangements” we agreed the following actions:

• We are taking a significant step forward in global tax co-operation. We have agreed a strategy for systematic and enhanced co-operation between our tax administrations, based on existing legal instruments, that will allow us to quickly understand and deal with global tax risks whenever and wherever they arise. Along with the strategy, we have created a new international platform called the JITSIC1 Network to focus specifically on cross border tax avoidance, which is open to all FTA members on a voluntary basis. This new network integrates the existing cooperation amongst some of us into the larger FTA framework.

• We will invest the resources necessary to implement the new standard on automatic exchange of information and use the information to counter tax evasion wherever it arises, while protecting taxpayer confidentiality and ensuring the proper use of the information. We will ensure that common, secure and effective transmission systems are in place.

• We will improve the practical operation of the Mutual Agreement Procedure (MAP) so that issues of double taxation are addressed more quickly and efficiently in order to meet the needs of both governments and taxpayers and so assure the critical role of those procedures in the global tax environment. We have advanced work in this area which will be integrated with the result from the related 2015 BEPS action item. We will encourage competent authorities of all member countries to actively participate in the relevant activities (www.oecd.org/site/ctpfta/map-strategic-plan.pdf).

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

FATF Summary of Outcomes on Corruption

Posted by William Byrnes on October 24, 2014


International Financial Law Prof Blog.

The key objectives for this meeting were:

  • to discuss the FATF’s draft Guidance on Transparency and Beneficial Ownership, and incorporate feedback from anti-corruption experts to enhance the paper, and
  • to build on the previous discussions between the FATF and the G20 on anti-corruption issues, with a particular focus on measures to combat the misuse of corporate vehicles.

PREVENTING THE MISUSE OF CORPORATE VEHICLES … read on at International Financial Law Prof Blog.

Posted in Compliance, Money Laundering | Tagged: , | Leave a Comment »

IRS Announces 2015 Pension Plan Limitations; Taxpayers May Contribute up to $18,000 to their 401(k) plans in 2015

Posted by William Byrnes on October 23, 2014


The Internal Revenue Service announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2015.  Many of the pension plan IRS logolimitations will change for 2015 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.  However, other limitations will remain unchanged because the increase in the index did not meet the statutory thresholds that trigger their adjustment.  Highlights include the following:

  • The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,500 to $18,000.
  • The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $5,500 to $6,000.
  • The limit on annual contributions to an Individual Retirement Arrangement (IRA) remains unchanged at $5,500.  The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) between $61,000 and $71,000, up from $60,000 and $70,000 in 2014.  For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out range is $98,000 to $118,000, up from $96,000 to $116,000.  For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income is between $183,000 and $193,000, up from $181,000 and $191,000.  For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI phase-out range for taxpayers making contributions to a Roth IRA is $183,000 to $193,000 for married couples filing jointly, up from $181,000 to $191,000 in 2014.  For singles and heads of household, the income phase-out range is $116,000 to $131,000, up from $114,000 to $129,000.  For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
  • The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low- and moderate-income workers is $61,000 for married couples filing jointly, up from $60,000 in 2014; $45,750 for heads of household, up from $45,000; and $30,500 for married individuals filing separately and for singles, up from $30,000.

Below are details on both the adjusted and unchanged limitations.

Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans.  Section 415(d) requires that the Secretary of the Treasury annually adjust these limits for cost of living increases.  Other limitations applicable to deferred compensation plans are also affected by these adjustments under Section 415.  Under Section 415(d), the adjustments are to be made under adjustment procedures similar to those used to adjust benefit amounts under Section 215(i)(2)(A) of the Social Security Act.

Effective January 1, 2015, the limitation on the annual benefit under a defined benefit plan under Section 415(b)(1)(A) remains unchanged at $210,000.  For a participant who separated from service before January 1, 2015, the limitation for defined benefit plans under Section 415(b)(1)(B) is computed by multiplying the participant’s compensation limitation, as adjusted through 2014, by 1.0178.

The limitation for defined contribution plans under Section 415(c)(1)(A) is increased in 2015 from $52,000 to $53,000.

The Code provides that various other dollar amounts are to be adjusted at the same time and in the same manner as the dollar limitation of Section 415(b)(1)(A).  After taking into account the applicable rounding rules, the amounts for 2015 are as follows:

The limitation under Section 402(g)(1) on the exclusion for elective deferrals described in Section 402(g)(3) is increased from $17,500 to $18,000.

The annual compensation limit under Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $260,000 to $265,000.

The dollar limitation under Section 416(i)(1)(A)(i) concerning the definition of key employee in a top-heavy plan remains unchanged at $170,000.

The dollar amount under Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5 year distribution period is increased from $1,050,000 to $1,070,000, while the dollar amount used to determine the lengthening of the 5 year distribution period remains unchanged at $210,000.

The limitation used in the definition of highly compensated employee under Section 414(q)(1)(B) is increased from $115,000 to $120,000.

The dollar limitation under Section 414(v)(2)(B)(i) for catch-up contributions to an applicable employer plan other than a plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over is increased from $5,500 to $6,000.  The dollar limitation under Section 414(v)(2)(B)(ii) for catch-up contributions to an applicable employer plan described in Section 401(k)(11) or Section 408(p) for individuals aged 50 or over is increased from $2,500 to $3,000.

The annual compensation limitation under Section 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost of living adjustments to the compensation limitation under the plan under Section 401(a)(17) to be taken into account, is increased from $385,000 to $395,000.

The compensation amount under Section 408(k)(2)(C) regarding simplified employee pensions (SEPs) is increased from $550 to $600.

The limitation under Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased from $12,000 to $12,500.

The limitation on deferrals under Section 457(e)(15) concerning deferred compensation plans of state and local governments and tax-exempt organizations is increased from $17,500 to $18,000.

The compensation amount under Section 1.61 21(f)(5)(i) of the Income Tax Regulations concerning the definition of “control employee” for fringe benefit valuation remains unchanged at $105,000.  The compensation amount under Section 1.61 21(f)(5)(iii) is increased from $210,000 to $215,000.

The Code also provides that several retirement-related amounts are to be adjusted using the cost-of-living adjustment under Section 1(f)(3).  After taking the applicable rounding rules into account, the amounts for 2015 are as follows:

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for married taxpayers filing a joint return is increased from $36,000 to $36,500; the limitation under Section 25B(b)(1)(B) is increased from $39,000 to $39,500; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $60,000 to $61,000.

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for taxpayers filing as head of household is increased from $27,000 to $27,375; the limitation under Section 25B(b)(1)(B) is increased from $29,250 to $29,625; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $45,000 to $45,750.

The adjusted gross income limitation under Section 25B(b)(1)(A) for determining the retirement savings contribution credit for all other taxpayers is increased from $18,000 to $18,250; the limitation under Section 25B(b)(1)(B) is increased from $19,500 to $19,750; and the limitation under Sections 25B(b)(1)(C) and 25B(b)(1)(D) is increased from $30,000 to $30,500.

The deductible amount under Section 219(b)(5)(A) for an individual making qualified retirement contributions remains unchanged at $5,500.

The applicable dollar amount under Section 219(g)(3)(B)(i) for determining the deductible amount of an IRA contribution for taxpayers who are active participants filing a joint return or as a qualifying widow(er) is increased from $96,000 to $98,000.  The applicable dollar amount under Section 219(g)(3)(B)(ii) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $60,000 to $61,000.  The applicable dollar amount under Section 219(g)(3)(B)(iii) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.  The applicable dollar amount under Section 219(g)(7)(A) for a taxpayer who is not an active participant but whose spouse is an active participant is increased from $181,000 to $183,000.

The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(I) for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $181,000 to $183,000.  The adjusted gross income limitation under Section 408A(c)(3)(B)(ii)(II) for all other taxpayers (other than married taxpayers filing separate returns) is increased from $114,000 to $116,000.  The applicable dollar amount under Section 408A(c)(3)(B)(ii)(III) for a married individual filing a separate return is not subject to an annual cost-of-living adjustment and remains $0.

The dollar amount under Section 430(c)(7)(D)(i)(II) used to determine excess employee compensation with respect to a single-employer defined benefit pension plan for which the special election under Section 430(c)(2)(D) has been made is increased from $1,084,000 to $1,101,000.

 

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Ten Things to Know About the Taxpayer Advocate Service

Posted by William Byrnes on October 20, 2014


Taxpayer AdvocateTen Things to Know About the Taxpayer Advocate Service

1. The Taxpayer Advocate Service (TAS) is an independent organization within the IRS and is your voice at the IRS.

2. We help taxpayers whose problems are causing financial difficulty. This includes businesses as well as individuals.

3. You may be eligible for our help if you’ve tried to resolve your tax problem through normal IRS channels and have gotten nowhere, or you believe an IRS procedure just isn’t working as it should.

4. The IRS has adopted a Taxpayer Bill of Rights that includes 10 fundamental rights that every taxpayer has when interacting with the IRS:

Taxpayer Bill of Rights

  • The Right to Be Informed.
  • The Right to Quality Service.
  • The Right to Pay No More than the Correct Amount of Tax.
  • The Right to Challenge the IRS’s Position and Be Heard.
  • The Right to Appeal an IRS Decision in an Independent Forum.
  • The Right to Finality.
  • The Right to Privacy.
  • The Right to Confidentiality.
  • The Right to Retain Representation.
  • The Right to a Fair and Just Tax System.

Our TAS Tax Toolkit at TaxpayerAdvocate.irs.gov can help you understand these rights and what they mean for you. The toolkit also has examples that show how the Taxpayer Bill of Rights can apply in specific situations.

5. If you qualify for our help, you’ll be assigned to one advocate who will be with you at every turn. And our service is always free.

6. We have at least one local taxpayer advocate office in every state, the District of Columbia, and Puerto Rico.  You can call your advocate, whose number is in your local directory, in Pub. 1546, Taxpayer Advocate Service — Your Voice at the IRS, and on our website at irs.gov/advocate. You can also call us toll-free at
877-777-4778.

7. The TAS Tax Toolkit at TaxpayerAdvocate.irs.gov has basic tax information, details about tax credits (for individuals and businesses), and much more.

8. TAS also handles large-scale or systemic problems that affect many taxpayers. If you know of one of these broad issues, please report it to us at www.irs.gov/sams.

9. You can get updates at

10. TAS is here to help you, because when you’re dealing with a tax problem, the worst thing you can do is to do nothing at all.

Posted in Taxation | Tagged: | 1 Comment »

Miscellaneous Deductions Can Cut Taxes

Posted by William Byrnes on October 15, 2014


IRS logoMiscellaneous Deductions Can Cut Taxes

You may be able to deduct certain miscellaneous costs you pay during the year. Examples include employee expenses and fees you pay for tax advice. If you itemize, these deductions could lower your tax bill. Here are some things the IRS wants you to know about miscellaneous deductions:

Deductions Subject to the Two Percent Limit.  You can deduct most miscellaneous costs only if their total is more than two percent of your adjusted gross income. These include expenses such as:

  • Unreimbursed employee expenses.
  • Expenses related to searching for a new job in the same line of work.
  • Certain work clothes and uniforms.
  • Tools needed for your job.
  • Union dues.
  • Work-related travel and transportation.

Deductions Not Subject to the Two Percent Limit.  Some deductions are not subject to the two percent limit. They include:

  • Certain casualty and theft losses. Generally, this applies to damaged or stolen property that you held for investment. This includes items such as stocks, bonds and works of art.
  • Gambling losses up to the amount of your gambling winnings.
  • Losses from Ponzi-type investment schemes.

There are many expenses that you can’t deduct. For example, you can’t deduct personal living or family expenses. You claim allowable miscellaneous deductions on Schedule A, Itemized Deductions.

Posted in Taxation | Tagged: , | 2 Comments »

SEC Investor Bulletin: Trading Suspensions

Posted by William Byrnes on October 13, 2014


SECThe SEC’s Office of Investor Education and Advocacy is issuing this Investor Bulletin to help educate investors about the SEC’s rules and regulations related to trading suspensions.  The federal securities laws generally allow the SEC to suspend trading in any stock for up to ten business days.  This bulletin answers some of the typical questions we receive from investors about trading suspensions.  A list of companies whose stock is currently subject to an SEC trading suspension, or which previously has been subject to an SEC trading suspension, may be found here.

Why would the SEC suspend trading in a stock?

The SEC may suspend trading in a stock when the Commission is of the opinion that a suspension is required to protect investors and the public interest.  Circumstances that might lead the Commission to suspend trading include:

  • A lack of current, accurate, or adequate information about the company, for example, when a company is not current in its filings of periodic reports;
  • Questions about the accuracy of publicly available information, including in company press releases and reports, about the company’s current operational status, financial condition, or business transactions;
  • Questions about trading in the stock, including trading by insiders, potential market manipulation, and the ability to clear and settle transactions in the stock.

Why couldn’t the SEC forewarn investors that it was about to suspend trading in a stock?

The SEC cannot announce that it’s working on a suspension.  We conduct this work confidentially to maintain the effectiveness of any related investigation we may be conducting.  Confidentiality also protects a company and its shareholders if the SEC ultimately decides not to issue a trading suspension.  The SEC is mindful of the seriousness of suspensions, and carefully considers whether it is in the public interest and for the protection of investors to order a trading suspension.

What happens when the ten business day suspension period ends?

The SEC will not comment publicly on the status of a company when the ten-day suspension period ends because the company may still have serious legal problems.  For instance, the SEC may continue to investigate a company to determine whether it has defrauded investors.  The public would not know if the SEC is continuing its investigation unless the SEC publicly announces an enforcement action against the company.

Furthermore, when an SEC trading suspension ends, a broker-dealer generally may not solicit investors to buy or sell the previously-suspended over-the-counter (“OTC”) stock until certain requirements are met.  Before soliciting quotations or resuming quotations in an OTC stock that has been subject to a trading suspension, a broker-dealer must file a Form 211 with the Financial Industry Regulatory Authority (“FINRA”) representing that it has satisfied all applicable requirements, including those of Rule 15c2-11 and FINRA Rule 6432.

Among other things, Rule 15c2-11 requires broker-dealers to review and maintain certain documents and information about the company, including in certain cases:

  1. the company’s state of organization, business line, and names of certain control affiliates;
  2. the title and class of the securities outstanding; and
  3. the company’s most recent balance sheet and its profit and loss and retained earnings statement.

No broker-dealer may solicit or recommend that an investor buy an OTC stock that has been subject to a trading suspension unless and until FINRA has approved a Form 211 relating to the stock.  If there are continuing regulatory concerns about the company, its disclosures, or other factors, such as a pending regulatory investigation, a Form 211 application may not be approved.

However, limited or “unsolicited” trading can occur in an OTC stock that has been subject to a trading suspension after the suspension ends but before a Form 211 is approved.  This may allow investors to trade the stock when a broker or adviser has not solicited or recommended such a transaction.  Even though such trading is allowed, it can be very risky for investors without current and reliable information about the company.

Will trading automatically resume after ten days?

It depends on the market where the stock trades.  Different rules apply in different markets.

For stocks that quote in the OTC market (which includes stocks quoted on the Bulletin Board and OTC Link (f/k/a Pink Sheets)), quoting doesnot automatically resume when a ten-day suspension ends.  Before OTC stock quoting can resume after a suspension period, SEC regulations require a broker-dealer to review specific information about the company in accordance with Exchange Act Rule 15c2-11 and FINRA Rule 6432.  If a broker-dealer does not have confidence that a company’s financial statements are reasonably current and accurate in all material respects, especially in light of the questions that may have been raised by the SEC suspension action, then a broker-dealer may not publish a quote for the company’s stock.  The OTC markets function through dealer systems where only broker-dealers may quote and facilitate trading in OTC stocks.

In contrast to stocks that trade in the OTC market, stocks that trade on an exchange resume trading as soon as an SEC suspension ends.

If the suspended stock resumes trading, why is it trading at a much lower price?

The trading suspension may raise serious questions and cast doubts about the company in the minds of investors.  While some investors may be willing to buy the company’s stock, they will do so only at significantly lower prices.

Take precautions following an SEC trading suspension: check for reliable information.

Investors should be very cautious in considering an investment in a stock following a trading suspension.  At the very least, investors should assure themselves that they have current and reliable information about a company before investing.

  • Research the Company: Always research a company before buying its stock, especially following a trading suspension.  Consider the company’s finances, organization, and business prospects.  This type of information often is included in filings that a company makes with the SEC.
  • Review the Company’s SEC Filings: This information is free and can be found on the Commission’s EDGAR filing system.  Some companies are not required to file reports with the SEC.  These are known as “non-reporting” companies.  Investors should be aware of the risks of trading the stock of such companies, as there may not be current and accurate information that would allow investors to make an informed investment decision.
  • Be Skeptical: Investors should always ask why someone provides them a “hot” tip. Investors should also do their own research and be aware that information from online blogs, social networking sites, and even a company’s own website  may be inaccurate and sometimes intentionally misleading:

If current, reliable information about a company and its stock is not available, investors should consider seriously whether this may be a good investment.

Why would the SEC suspend trading of a stock when it knows that such action will hurt current shareholders?

The SEC suspends trading in a security when it is of the opinion that the suspension is required in the public interest and to protect investors.  Because a suspension often causes a dramatic decline in the price of the security, the SEC suspends trading only when it believes that the public may be making investment decisions based on a lack of information, or false or misleading information.  A suspension may prevent potential investors from being victimized by a fraud.

How can investors find out if the stock will trade again after a suspension?

Investors can contact the broker-dealer who sold you the stock or a broker-dealer who quoted the stock before the suspension. Ask the broker-dealer if it intends to resume publishing a quote in the company’s stock.

If there is no market to sell my security, what can investors do with their shares?

If there is no market to trade the shares, they may be worthless.  Investors may want to contact their financial or tax advisers to determine how to treat such a loss on their tax returns.

What can investors do if the company acted wrongfully and they have lost money?

If investors want to get their money back, they will need to consider taking legal action on their own.  The SEC cannot act as their lawyer.  Investors must pursue all of their legal remedies themselves or with the assistance of legal counsel they engage themselves.  For more information about how to protect your legal rights, including finding a lawyer who specializes in securities law, read our flyer, How the SEC Handles Your Complaint or Inquiry.

To learn how to file an arbitration action against a broker-dealer, investors can contact the Director of Arbitration at FINRA.  FINRA also offers mediation as an option before going to arbitration.

Where can investors get information about trading suspensions?

Investors can find a list of companies whose stocks have been suspended by the SEC since October 1995 on our website.

Posted in Compliance, Uncategorized | Tagged: , | Leave a Comment »

International Wealth Management Considerations for American Expatriates

Posted by William Byrnes on October 10, 2014


by Edward D. Nieto

Expatriates often require international financial services to manage their investments, minimize their tax burdens, comply with offshore tax reporting requirements, and manage their wealth through tax and estate planning. An expatriate’s financial and tax situation becomes more complex when assets are acquired, investments are made, and-or business activities are conducted overseas. American expatriates have additional banking and tax reporting requirements that require special considerations when managing wealth. International banking is vastly becoming more difficult for Americans due to new reporting requirements under the Foreign Account Tax Compliance Act. In many cases, foreign banks are closing the bank accounts of Americans and preventing the purchase of investment products due to the cost and time involved with compliance. …

read Edward Nieto’s article at AdvisorFYI

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Tax Treatment of Offshore Real Estate Holdings and Foreign Housing Expenses

Posted by William Byrnes on October 6, 2014


AdvisorFYI » Tax Treatment of Offshore Real Estate Holdings and Foreign Housing Expenses.

by Mr. Edward D. Nieto

The Internal Revenue Service (IRS) does not require that offshore real estate be reported as a foreign financial asset such as a personal residence or a rental property held by an American expatriate or a United States Government employee working overseas.1It is only when the real estate is held through a foreign entity such as a corporation, partnership, trust or estate, that the interest in the entity needs to be specified and reported as foreign financial asset if the total value of all specified foreign financial assets is greater than the applicable reporting threshold.2

Read on at AdvisorFYI » Tax Treatment of Offshore Real Estate Holdings and Foreign Housing Expenses

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BEPS – China and India: Official Responses to UN BEPS Questionnaire | Let’s Talk Tax

Posted by William Byrnes on October 6, 2014


BEPS – China and India: Official Responses to UN BEPS Questionnaire | Let’s Talk Tax.

, a tax manager at Mazars, has written am informative article:

United Nations Subcommittee on Base Erosion and Profit Shifting (BEPS) had invited the developing countries to provide feedback by answering the UN Questionnaire including 10 questions. This summary focuses on the responses provided by China and India.

China and India responses to BEPS QuestionnaireBoth China and India confirmed that BEPS is very important issue for them and shared the global concern. ….

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

Learn About the Federal Tax System

Posted by William Byrnes on October 6, 2014


IRS logo

Want to learn about the federal tax system?  

Did you know there’s a free, online program to help teachers and students learn the “hows” and “whys” of taxes? The IRS calls it “Understanding Taxes.” It was designed by the IRS and teachers to make learning about federal taxes as easy as A-B-C.

  • Accessible (web-based)
  • Brings learning to life
  • Comprehensive

Here are six more reasons to check out the Understanding Taxes program:

1. There are thirty-nine easy, relevant and fun lessons available 24/7.

2. A student can quickly look through the program and skip around.

3. A series of tax tutorials guides through the basics of tax preparation.  Another feature is a chance to test knowledge through tax trivia. There’s also a glossary of tax terms.

4. Teachers can customize the interactive program.  It’s easy to add to a school’s curriculum.

5. No need to register or login to use the program.

6. The program is a great way to learn about the history and theory of taxes in the USA.

IRS YouTube Videos:

Posted in Courses, Tax Policy | Tagged: , | Leave a Comment »

Jury Determines 150-Percent FBAR Penalty and U.S. Seeks FBAR Related Forfeiture of $12 Million!”

Posted by William Byrnes on October 4, 2014


International Financial Law Prof Blog.

In Zwerner, the government assessed civil FBAR penalties equivalent to 50 percent of the highest account balance for each of tax year 2004, 2005, 2006 and 2007, aggregating $3,488,609.33 for an account that appears to have had a high balance of $1,691,054 during the relevant time period! The IRS asserted a 75-percent civil income tax fraud penalty for tax years 2004, 2005 and 2006. …  The jury trial in Zwerner began on May 19, 2014 …

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ÉTICA Y COMPLIANCE: AMORES REÑIDOS

Posted by William Byrnes on October 3, 2014


ÉTICA Y COMPLIANCE: AMORES REÑIDOS.

a colleagues blog about compliance (in Spanish)

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Crackdown on Fashion Industries Money Laundering for Drug Cartels

Posted by William Byrnes on October 3, 2014


read it on International Financial Law Prof Blog

Extensive law enforcement operations have revealed evidence that money laundering activities and Bank Secrecy Act (BSA) violations are pervasive throughout the Los Angeles Fashion District, which includes more than 2,000 businesses. ,,, more than 1,000 federal, state and local law enforcement officials were in the Fashion District, where they executed dozens of search warrants and arrest warrants linked to businesses suspected to be engaged in money laundering schemes and evasions of required BSA reporting.

Posted in Financial Crimes | Tagged: , , , | 1 Comment »

Is FATCA failing? Here is my reply. (Haydon Perryman)

Posted by William Byrnes on October 2, 2014


FATCA & CRS Training. Advice. Consultancy.

Is FATCA failing? A reply.

This is a question that can be asked given that only 104K of FFIs had registered on the IRS Portal by September 24, 2014.

http://apps.irs.gov/app/fatcaFfiList/flu.jsf

When you compare 104K to the IRS estimate that between 400K and 600K need to register, 104K does indeed look small.

On the face of it that means there are a lot of Non Participating FFIs out there. A look at the regulations will tell us that withholding starts in 2014.

It is a fact that the regulations state that withholding starts in 2014. But let me ask a question: is that actually what happens in reality?

Withholding occurs on NP-FFI (Non Participating FFIs) and RAH (Recalcitrant Account Holders).

FATCA has been factored into on boarding. For those who doubt this, just try opening an account – you’ll soon find that there are questions in the onboarding process that address…

View original post 1,115 more words

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Is FATCA failing? What do the October 1st numbers say?

Posted by William Byrnes on October 1, 2014


International Financial Law Prof Blog.

Haydon Perryman and I have had long running discussions about different aspects of FATCA.  I think that I bring an academic, albeit American, perspective.  He certainly brings the practical, Tier 1, institution perspective.

FATCA_roll

The two most interesting debates that we hold are regarding documentation (the W8s and acceptable equivalents by IGA) and the pool of FFIs (including EAG members) that should register to acquire a GIIN.  Last month, the GIIN list included 99,861 FFIs (mind you that a substantial number of these registrations are not unique, but instead represent affiliates within EAGs) – see our previous analysis links below.  It is October and only 104,344 are now registered, less than 5,000 these past thirty days.

Non-IGA Countries = 149

Only 5,257 (5%) of these 104,344 registrations are from the 149 countries that have not had an IGA announced with the US.  That means that these 149 countries are already having a 30% FATCA chapter 4 withholding imposed by US withholding agents on most of their US financial investments. Chapter 4 withholding is on more types of income/payments than Chapter 3 withholding (albeit the harshest gross proceeds withholding is not yet imposed).

But at least Bonaire, Sint Eustatius and Saba registration is up almost 100%! (well, 12 to 22 is a less exciting number to report).

download for free –> LexisNexis® Guide to FATCA Compliance

IGA Countries = 101

Which country had the most movement?  … read on at International Financial Law Prof Blog.

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The IRS’ International Collection Efforts Not Up to Par, TIGTA Audit Finds

Posted by William Byrnes on October 1, 2014


International Financial Law Prof Blog.

International tax noncompliance remains a significant area of concern for the IRS. However, the IRS’s collection efforts need to be enhanced to ensure that delinquent international taxpayers become compliant with their U.S. tax obligations.

 

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FDIC Forces Merrick Bank To Stop Deceptive Payment Protection Credit Card Practices

Posted by William Byrnes on October 1, 2014


International Financial Law Prof Blog.

The Bank marketed the “PAYS Plan,” a payment protection credit card add-on product that was sold from 2008 to 2013 to consumers who had a Bank credit card. The PAYS Plan provided a benefit payment towards a consumer’s monthly credit card payment following certain life events such as involuntary unemployment, disability, and hospitalization.

The FDIC determined that the Bank violated federal law prohibiting unfair and deceptive practices by, among other things: …

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How to make FATCA even more complicated

Posted by William Byrnes on October 1, 2014


FATCA & CRS Training. Advice. Consultancy.

The September 2014 Award for making FATCA even more complicated goes to the US IRS.

This award is well deserved as with just a little effort this complication could have made been avoided.

The subject is one of country codes. A dry subject even at the best of times but the IRS have managed to make it quite interesting and also made it more difficult for practitioners.

A foreign financial institution (FFI) needs a GIIN. GIINs are provided by the IRS upon completion of registration on the IRS FATCA Portal.

The last three digits of the GIIN contain the ISO 3166 Code of the Country to which the FFI belongs for FATCA purposes.

ISO 3166 Codes are well established:

http://www.iso.org/iso/country_codes.htm

ISO 3166 Codes also make FATCA slightly easier to wield because the last three digits of the GIIN, in theory, tell you which IGA to apply (if applicable).

It is…

View original post 6,841 more words

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Sexual Violence during War and Peace

Posted by William Byrnes on October 1, 2014


Dr. Jelke Boesten, Kings College (London) (faculty profile and books)

http://www.palgrave.com/page/detail/sexual-violence-during-war-and-peace-jelke-boesten/?K=9781137383440

book coverThe idea that rape is widely used as a weapon of war has taken root in international institutions, influencing how post-conflict justice and transitional justice are perceived and pursued. Despite this global attention, there has been no progress eradicating or even mitigating sexual violence in war or in peace and very little progress prosecuting crimes of sexual violence. With particular reference to post-conflict justice, this book asks what sexual violence means from a socio-political perspective and in what ways contemporary “peacetime” violence is linked to wartime rape. Evidence from Peru and the internal armed conflict of 1980-2000 shows that acts of wartime rape are deeply embedded in existing configurations of gender and power and that sexual violence serves not only wartime terror but also peacetime hierarchies.

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