DOJ Allows Israeli Bank to Pay its Way Out of Jail After Stealing Billions from USA

Bank Leumi, an Israeli bank, has entered into a deferred prosecution agreement with the Justice Department after disclosing that it had aided and assisted U.S. taxpayers to prepare and present false tax returns to the IRS by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world. The agreement between the Bank Leumi Group and the Department of Justice marked the first time that an Israeli bank admitted to such criminal conduct which spanned over a 10-year period and included services and products designed to keep U.S. taxpayer accounts concealed at Bank Leumi locations all over the world.

 

The Bank Leumi Group has agreed to pay the United States a total of $270 million, of which $157 million represents the penalty for taxpayer accounts held at the Leumi Private Bank in Switzerland. The penalty permits certain Swiss banks to avoid prosecution by making a full and complete disclosure of their U.S. taxpayer-held accounts and paying substantial penalties. The agreement further provided that Bank Leumi Luxembourg and Leumi Private Bank will cease to provide banking and investment services for all accounts held or beneficially owned by U.S. taxpayers.

IRS Commissioner John Koskinen commented that the agreement against Leumi Bank was another historical event in the international tax area. He added that the IRS would not tolerate the use of offshore accounts to escape taxation, and that it would continue to focus on this priority area.

 

If you need assistance concerning the tax treatment of foreign assets, do not hesitate to contact a tax lawyer in Orange County.   Not even the foreign banks are immune to the efforts being taken by the US government.  The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax prosecutions and IRS matters concerning foreign assets. You can reach the Wilson Tax Law Group at 714-463-4430.

 

DOJ Allows Israeli Bank to Pay its Way Out of Jail After Stealing Billions from USA

Bank Leumi, an Israeli bank, has entered into a deferred prosecution agreement with the Justice Department after disclosing that it had aided and assisted U.S. taxpayers to prepare and present false tax returns to the IRS by hiding income and assets in offshore bank accounts in Israel and elsewhere around the world. The agreement between the Bank Leumi Group and the Department of Justice marked the first time that an Israeli bank admitted to such criminal conduct which spanned over a 10-year period and included services and products designed to keep U.S. taxpayer accounts concealed at Bank Leumi locations all over the world.

 

The Bank Leumi Group has agreed to pay the United States a total of $270 million, of which $157 million represents the penalty for taxpayer accounts held at the Leumi Private Bank in Switzerland. The penalty permits certain Swiss banks to avoid prosecution by making a full and complete disclosure of their U.S. taxpayer-held accounts and paying substantial penalties. The agreement further provided that Bank Leumi Luxembourg and Leumi Private Bank will cease to provide banking and investment services for all accounts held or beneficially owned by U.S. taxpayers.

IRS Commissioner John Koskinen commented that the agreement against Leumi Bank was another historical event in the international tax area. He added that the IRS would not tolerate the use of offshore accounts to escape taxation, and that it would continue to focus on this priority area.

 

If you need assistance concerning the tax treatment of foreign assets, do not hesitate to contact a tax lawyer in Orange County.   Not even the foreign banks are immune to the efforts being taken by the US government.  The Orange County Tax Attorneys at Wilson Tax Law Group have experience in federal tax prosecutions and IRS matters concerning foreign assets. You can reach the Wilson Tax Law Group at 714-463-4430.

 

IRS Increases the FBAR Penalty for People with Offshore Accounts

In efforts to increase offshore tax compliance, the IRS just made brand new changes to its current offshore disclosure programs. 

The streamlined procedures have been expanded to accommodate a wider group of U.S. taxpayers who have unreported foreign financial accounts.  This is a very good thing because now more people can use the procedures than could have before.

The original streamlined procedures announced in 2012 were available only to non-resident, non-filers. Taxpayer submissions were subject to different degrees of review based on the amount of the tax due and the taxpayer’s response to a “risk” questionnaire.

The expanded streamlined procedures are available to a wider population of U.S. taxpayers living outside the country and, for the first time, to certain U.S. taxpayers residing in the United States. The changes include:

 • Eliminating a requirement that the taxpayer have $1,500 or less of unpaid tax per year;

 •  Eliminating the required risk questionnaire;

 •  Requiring the taxpayer to certify that previous failures to comply were due to non-willful conduct.

For eligible U.S. taxpayers residing outside the United States, all penalties will be waived. For eligible U.S. taxpayers residing in the United States, the only penalty will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue.

 Offshore Voluntary Disclosure Program (OVDP) Modified: The changes announced today also make important modifications to the OVDP. The changes include:

 •  Requiring additional information from taxpayers applying to the program;

 •  Eliminating the existing reduced penalty percentage for certain non-willful taxpayers in light of the expansion of the streamlined procedures;

  •  Requiring taxpayers to submit all account statements and pay the offshore penalty at the time of the OVDP application;

 • Enabling taxpayers to submit voluminous records electronically rather than on paper;

 • Increasing the offshore penalty percentage (from 27.5% to 50%) if, before the taxpayer’s OVDP pre-clearance request is submitted, it becomes public that a financial institution where the taxpayer holds an account or another party facilitating the taxpayer’s offshore arrangement is under investigation by the IRS or Department of Justice.

I will add more in a later post.  You can find the news release here.   Please contact the Wilson Tax Law Group if you have questions about offshore bank account disclosures or FBAR matters under the July 1, 2014 or transitional procedures.  We have handled numerous offshore cases.

Update:  The IRS has published FAQ's for the Transition Rules drawing a clear line as to who can qualify for the pre-July 1, 2014 penalty rates.

Q: What if I made a request for OVDP pre-clearance before July 1, 2014, but not a full voluntary disclosure? 

A: A taxpayer will not be considered to be currently participating in OVDP for purposes of receiving transitional treatment unless, as of July 1, 2014, he has mailed to IRS Criminal Investigation his voluntary disclosure letter and attachments as described in OVDP FAQ 24.  Thus, a taxpayer who makes an offshore voluntary disclosure as outlined in FAQ 24 on or after July 1, 2014 will not be eligible for transitional treatment under OVDP, even though he may have made a request for OVDP pre-clearance before July 1, 2014.

These transitional FAQs can be found here.

The FAQ for the effective-July 1, 2014 OVDP can be found here.

 

IRS Increases the FBAR Penalty for People with Offshore Accounts

In efforts to increase offshore tax compliance, the IRS just made brand new changes to its current offshore disclosure programs. 

The streamlined procedures have been expanded to accommodate a wider group of U.S. taxpayers who have unreported foreign financial accounts.  This is a very good thing because now more people can use the procedures than could have before.

The original streamlined procedures announced in 2012 were available only to non-resident, non-filers. Taxpayer submissions were subject to different degrees of review based on the amount of the tax due and the taxpayer’s response to a “risk” questionnaire.

The expanded streamlined procedures are available to a wider population of U.S. taxpayers living outside the country and, for the first time, to certain U.S. taxpayers residing in the United States. The changes include:

 • Eliminating a requirement that the taxpayer have $1,500 or less of unpaid tax per year;

 •  Eliminating the required risk questionnaire;

 •  Requiring the taxpayer to certify that previous failures to comply were due to non-willful conduct.

For eligible U.S. taxpayers residing outside the United States, all penalties will be waived. For eligible U.S. taxpayers residing in the United States, the only penalty will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue.

 Offshore Voluntary Disclosure Program (OVDP) Modified: The changes announced today also make important modifications to the OVDP. The changes include:

 •  Requiring additional information from taxpayers applying to the program;

 •  Eliminating the existing reduced penalty percentage for certain non-willful taxpayers in light of the expansion of the streamlined procedures;

  •  Requiring taxpayers to submit all account statements and pay the offshore penalty at the time of the OVDP application;

 • Enabling taxpayers to submit voluminous records electronically rather than on paper;

 • Increasing the offshore penalty percentage (from 27.5% to 50%) if, before the taxpayer’s OVDP pre-clearance request is submitted, it becomes public that a financial institution where the taxpayer holds an account or another party facilitating the taxpayer’s offshore arrangement is under investigation by the IRS or Department of Justice.

I will add more in a later post.  You can find the news release here.   Please contact the Wilson Tax Law Group if you have questions about offshore bank account disclosures or FBAR matters under the July 1, 2014 or transitional procedures.  We have handled numerous offshore cases.

Update:  The IRS has published FAQ's for the Transition Rules drawing a clear line as to who can qualify for the pre-July 1, 2014 penalty rates.

Q: What if I made a request for OVDP pre-clearance before July 1, 2014, but not a full voluntary disclosure? 

A: A taxpayer will not be considered to be currently participating in OVDP for purposes of receiving transitional treatment unless, as of July 1, 2014, he has mailed to IRS Criminal Investigation his voluntary disclosure letter and attachments as described in OVDP FAQ 24.  Thus, a taxpayer who makes an offshore voluntary disclosure as outlined in FAQ 24 on or after July 1, 2014 will not be eligible for transitional treatment under OVDP, even though he may have made a request for OVDP pre-clearance before July 1, 2014.

These transitional FAQs can be found here.

The FAQ for the effective-July 1, 2014 OVDP can be found here.

 

Welcome to the Wilson Tax Law Blog - a Newport Beach Tax Attorney Blog

The Wilson Tax Law Group is a tax firm serving the Newport Beach and Yorba Linda areas.  This blog is meant to be both a service to our clients, where we can post IRS, California Franchise Tax Board, FBAR, and Orange County property tax news that may be of interest to them.  It will also be a place where we will post on topics that are of interest to us and other tax professionals following hot tax topics of the moment.  Sometimes, those areas will intersect, because we handle cutting edge cases including tax audits and tax planning for marijuana dispensaries (sales tax and income tax) and defending taxpayers in criminal investigations of the FBAR penalties.  This blog will be constantly evolving, so please give us feedback in the comments section if you think of future topics you would like to read more about.

For more information on our firm, read about our Newport Beach and Yorba Linda area tax attorney at wilsontaxlaw.com.

Welcome to the Wilson Tax Law Blog - a Newport Beach Tax Attorney Blog

The Wilson Tax Law Group is a tax firm serving the Newport Beach and Yorba Linda areas.  This blog is meant to be both a service to our clients, where we can post IRS, California Franchise Tax Board, FBAR, and Orange County property tax news that may be of interest to them.  It will also be a place where we will post on topics that are of interest to us and other tax professionals following hot tax topics of the moment.  Sometimes, those areas will intersect, because we handle cutting edge cases including tax audits and tax planning for marijuana dispensaries (sales tax and income tax) and defending taxpayers in criminal investigations of the FBAR penalties.  This blog will be constantly evolving, so please give us feedback in the comments section if you think of future topics you would like to read more about.

For more information on our firm, read about our Newport Beach and Yorba Linda area tax attorney at wilsontaxlaw.com.