Non-US Residents May Still Be Subject to FBAR Reporting Guidelines

Zach Smith International Tax Leave a Comment

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The IRS is bringing FBAR (FinCEN Report 114) enforcement suits against US citizens living abroad. The U.S. Department of Justice Tax Division recently brought suit to assess FBAR penalties of US$860,300 against a Canadian resident that is a dual-citizen of Canada and the United States. The citizen failed to report foreign bank accounts that he held in the years of …

The New Partnership Audit Rules: An Expansive Scope and Penalty Defenses

Jason Freeman Partnership Tax Leave a Comment

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The Bipartisan Budget Act of 2015 (“BBA”) was enacted into law on November 2, 2015.  Section 1101 of that act repeals the current TEFRA and Electing Large Partnership rules governing partnership audits and replaces them with a new centralized partnership audit regime that, in general, assesses and collects tax at the partnership level. On January 19, 2017, the Treasury released …

The Badges of Fraud

Jason Freeman Tax Fraud Leave a Comment

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Over the years, courts have developed a litany of so-called “badges” of fraud that may indicate that a taxpayer exhibited fraudulent intent.  These badges (or “flags” or indicators) of fraud may be used by the IRS as a basis to infer the existence of the level of intent necessary to assert a civil fraud penalty under Section 6663 of the Internal …

Why (Nearly) Every Partnership Agreement Should be Amended

Jason Freeman Partnership Tax Leave a Comment

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The new partnership audit rules generally take effect for tax years beginning in 2018—partnerships and their partners will ignore them at their peril.  The new rules, enacted under the Bipartisan Budget Act of 2015 (the “BBA”), dramatically change the regime that currently governs partnership tax audits, assessments, and collection.  The changes will impact not only how tax adjustments are assessed, …

Suspected Currency Structuring Leads to Enhanced Sentence for Tax Fraud

Jason Freeman Tax Fraud Leave a Comment

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In a recent opinion, the Fifth Circuit Court of Appeals upheld an above-Guidelines sentence in a criminal tax case involving indications of currency “structuring.”  The defendant, Nguyen, was charged with aiding and assisting in the preparation of a false and fraudulent tax return.  The 36-month sentence, handed down by the lower district court, was approximately 2 years longer than the …

Foreign-owned domestic disregarded entities: The new reporting requirements

Jason Freeman Uncategorized Leave a Comment

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Domestic disregarded entities wholly owned by foreign persons are now subject to new reporting obligations. The Treasury Department and the IRS recently issued final regulations (T.D. 9796) that treat such entities as domestic corporations rather than as disregarded entities for purposes of the reporting requirements under Sec. 6038A. The regulations are effective for tax years beginning on or after Jan. …

Federal Forfeiture and the Crime of “Structuring”

Jason Freeman Uncategorized Leave a Comment

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  A recent government report found that most IRS seizures for alleged violations of the federal “structuring” laws involved legal source funds from businesses. This finding is at odds with the formal purpose of the IRS’s forfeiture program: to interdict criminal enterprises. And that raises serious questions about the proper role of seizures and forfeitures–in federal law enforcement generally and particularly …

Department of Justice Issues Warning on the Eve of Tax Deadline: Willful Tax Violators Face Prosecution

Jason Freeman Uncategorized Leave a Comment

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The Department of Justice issued a public warning to taxpayers on the eve of this year’s tax filing deadline: Tax fraud carries serious consequences.  In a press release highlighting its recent criminal tax enforcement efforts, the DOJ warned that taxpayers who attempt to violate the federal tax laws should think twice and may face prosecution, prison and monetary fines and restitution. …

Federal Asset Forfeiture

Jason Freeman Uncategorized Leave a Comment

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In the past decade, government forfeitures through the Department of Justice’s Asset Forfeiture Program have ballooned to over $28 billion.  The DOJ, which has authority to seize property associated with violations of federal law through a process known as asset forfeiture, views forfeiture as an important law enforcement tool.  However, particularly because law enforcement officers generally have the authority to …