Use of foreign banks to hide assets is a well-known tactic for avoiding tax obligations. We know that individuals who attempt to avoid their taxes can face criminal charges that lead to high financial penalties and potential imprisonment, but what happens to a bank if it is complicit in the crime?
Tax laws take years to examine. Once they go into effect, there is generally a period of confusion before taxpayers fully understand the impact of the law. Take the recent Tax Cuts and Jobs Act (TCJA) as an example. The law passed a few years ago and was fully in effect for the 2018 tax filing season and yet the Internal Revenue Service (IRS) is still publishing guidelines to help taxpayers navigate this law.
The Internal Revenue Service (IRS) has started 2019 strong. In addition to collecting taxes in April, the agency has also already finished up seven big tax cases. These cases targeted three specific professions:
Tax evasion. It sounds like the type of crime that is used by the government to prosecute heinous offenders who have otherwise hidden evidence and appear innocent of wrongdoing. When people think of tax evasion crimes they may think of Al Capone and other mafia leaders or drug lords. In reality, tax evasion is a crime on its own. One the Internal Revenue Service (IRS) can use to recoup funds from any taxpayer that fails to meet their tax obligations and potentially put the accused behind bars.
Cristiano Ronaldo, soccer superstar from Portugal, has agreed to plead guilty to charges of tax evasion. Ronaldo entered a Madrid court this past Tuesday and plead guilty, agreeing to pay a fine of $21.6 million dollars for his alleged tax fraud crimes.
The Supreme Court of the United States issued a decision last year that will change the future of online shopping. The decision, Wayfair v. South Dakota, resulted in the ability of states to tax online purchases. Previously, a state would need to establish that the online business had a physical presence within the state in order to charge a state sales tax on an online transaction.
The United States Department of Justice (DOJ) has joined in the fight against tax evasion. A recent case involving a Swiss bank provides an example of the government’s interagency efforts to hold those who evade tax obligations accountable for their wrongdoing. The agency has reached a settlement with the Swiss bank after it states the bank admitted to “conspiring to defraud the United States on taxes, commit tax evasion and file false federal tax returns from 2002 through 2012.”
The United States Attorney for the Southern District of Texas recently announced an obstetrician gynecologist out of Houston, Texas agreed to a plea deal after facing allegations of tax evasion. The government accused the physician of failing to file income tax returns for the last twenty years.
Retirement is a time to get out there and explore. You have planned, saved and taken steps to ensure you are healthy enough to make the most of this stage of life. Why not use this well-earned time to enjoy a different part of the world?
Over the last decade, offshore account compliance has been at the top of the IRS priority list. The first of the Offshore Voluntary Disclosure Programs began in 2009. The strong interest led the IRS to create several iterations over the years.