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December 2013 Archives

Tax Hikes Expected in Brazil to Counter Sluggish Economy

Brazil was a model for financial discipline during the global financial crises. While much of the world economy was slowing down or contracting, Brazil will was chugging along quite serenely. Unfortunately, as with all things-good or bad-, it came to an end. Now Brazil is preparing to face some tax hikes for the first time in years.

Some 50% of Pakistani Lawmakers Do Not Pay Taxes

Here in the United States, the federal government is concerned about private individuals evading taxes by putting their funds in offshore accounts. Occasionally, the tax evasion tactics of a politician come to light. But apparently in Pakistan, at least half of all lawmakers don't even bother to register with tax authorities, let alone pay any taxes.

New York Becomes Fourth State to Regulate Tax Preparers

Earlier this year, the IRS began an effort to regulate unlicensed tax preparers with testing and continuing education requirements. Interest groups opposed to such regulation, however, halted that effort. Since then, groups vying for such regulation have pushed states to take up the mantle and regulate these unlicensed tax preparers themselves. New York has just joined California, Oregon, and Maryland in stricter regulations.

OECD: Government Tax Revenues are Improving

The Organization for Economic Cooperation and Development (OECD) has indicated that 30 of its developed-country members have seen their tax revenues continue to recover in 2013 after the 2008-2009 global financial crisis. While pre-crisis revenues accounted for roughly 35% of GDP, in 2013 it is at 34.6%, which indicates that revenues are in fact returning, albeit slowly, to past levels.

IRS Delays Start of 2014 Tax Filing Season to January 31

The IRS has delayed the date it will start accepting tax filings by about ten days due to the 16-day government shutdown in October. The delay is necessary, the IRS states, because it needs more time to run tests on its systems. The agency is also in the middle of an overhaul to beef up security against fraudulent filings and the thieves that file fake returns for massive refunds. The original start date, January 21, would have worked if the shutdown had not impacted the agency at the height of its return-processing systems overhaul.

Increasing Number of Swiss Cantonal Banks Voluntarily Join U.S. Disclosure Program

Since UBS agreed to a $780 million penalty by U.S. authorities, the United States has been attempting to convince other Swiss banks to voluntarily aid the American government in finding its tax evaders. By using UBS as an example, the help of an agreement with the Swiss government, and a disclosure program, it seems that the United States is well on its way into cracking the armor that is the legendary Swiss bank secrecy laws.

First Swiss Bank Enrolls in US Tax Evasion Program

In a motion of compliance, Valiant Bank has become the first Swiss lender to confirm its enrollment in a US program intended to put a stop to the country's banking secrecy. The US has relentlessly pursued Swiss lenders since forcing UBS, Switzerland's largest bank, to pay a $780m fine for assisting American tax evaders in 2009.

IRS Not Prepared to Enforce FATCA

In spite of an $8.6 million spending spree and nearly 19 months to rally its troops in an effort to enforce a new law against offshore tax evasion that takes effect next year, the IRS remains unprepared. According to the Treasury Inspector General for Tax Administration, more IRS computer and staff improvements are necessary in order to administer the Foreign Account Tax Compliance Act.

"Big Four" Accounting Firm Ordered to Pay $100 Million to Client

In a case that is likely to have a chilling effect among tax professionals, a Kentucky judge has ordered accounting giant Grant Thornton to pay $100,200,000 to a former client, for selling what is being referred to as an "abusive tax shelter." The scheme, which would purportedly allow the client to move large sums of money from offshore accounts into the United States with minimal tax effects, was also utilized by other accounting giants, including KPMG and Ernst & Young. Many of these firms have paid large sums to the government to settle the matter.

Federal Government Continues Assault Against Offshore Accounts

Two U.S. Federal Courts have approved the issuing of summonses to five U.S. banks regarding transfers made for two foreign banks. The first bank, Zuercher Kantonalbank (ZKB), is in Switzerland, where the Department of Justice has aggressively pursued banks that have assisted U.S. taxpayers in concealing assets from the U.S. government. The second bank, Bank of N.T. Butterfield & Son, is affiliated with the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, Switzerland and the UK.

Swiss Banks to Cooperate with US

In what appears to be an attempt to shed its image as a haven for tax evaders, the Swiss government has cleared the first batch of banks to cooperate with U.S. authorities under a deal to stem tax evasion. The country once known for its misuse of famous banking secrecy has succumbed to international pressure.

Spanish Prime Minister's Closest Ally Convicted of Tax Evasion

Former regional leader for the ruling Popular Party in Castellon, Carlos Fabra, of eastern Spain was found guilty on four counts of tax evasion and ordered to pay a fine of €693,000 on top of the amount he already owed. Luckily for Fabra, he was acquitted of accepting bribes and influence peddling to end a ten-year-investigation.

What to Expect from the IRS on Bitcoin

With bitcoin surging in price over this year from $17 to $1,200, many invested in the virtual currency are wondering what sort of taxes they should expect to pay from gains, if any. While the Federal Reserve stated that "virtual currencies like bitcoin have legitimate uses and should not be banned," the IRS has failed to give any sort of guidance at this point.

Manny Pacquiao Battling Tax Evasion Accusations

Manny Pacquiao performed well in his recent fight against Brandon Rios, but unfortunately for Pacquiao, it appears he will be heading into another bout almost immediately - a bout with the Internal Revenue Service. The IRS claims the boxer has failed to paid taxes from 2008-2009 with back taxes amounting to $50 million.

Former UBS Banker to Stand Trial in US after Extradition

Raoul Weil, a former UBS banker who was charged by US authorities five years ago for helping rich Americans evade taxes with the aid of secret Swiss bank accounts, has agreed to stand trial in the US after being arrested in Italy. US authorities issued an international arrest warrant for Weil in early 2009.

Jury convicts former football player of tax evasion

Strident anti-tax arguments have increasingly gained a hearing in the U.S. in recent years. Political scientists make careers out of the tracing the roots of this. From Ayn Rand’s influential novel “Atlas Shrugged” to more recent Tea Party protests, the issue of excessive and arguably unjust taxation has been much on people’s minds.

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