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How Will the IRS Know About My Foreign Account?

Taxpayers who have financial assets outside the United States often ask the question "How will they (IRS) know about my Foreign Account?;" when they are considering how (or whether) to come clean and inform the IRS about their previously undisclosed foreign financial accounts.

For years, there was little public knowledge of the U.S. government’s foreign financial reporting requirements, and enforcement of those rules was not always very strict.

However, since 2008,  a string of scandals involving foreign banks and investigations by the U.S. government into various non-U.S. financial institutions has garnered international media attention and changed the way governments around the world deal with offshore financial accounts.


1. FATCA. In 2010, the U.S. Congress supplemented its existing international tax treaties and information exchange agreements by passing the Foreign Account Tax Compliance Act (“FATCA”).
    • The main goal of FATCA was to make it more difficult for U.S. taxpayers to hide assets in offshore accounts and entities and therefore to increase U.S. tax revenue by ensuring income from those accounts is reported in the U.S. Government officials have estimated that the U.S. loses between $40 billion and $70 billion a year in unpaid taxes on offshore assets.
    • FATCA requires worldwide financial institutions to report to the IRS certain information about accounts that are owned by U.S. persons (whom they identify through a variety of methods, including the request of Forms W-9).
    • While FATCA has drawn intense criticism from around the world (and in the U.S.), it now appears that the law is here to stay, and other governments have made similar strides in increasing the scope of their international tax information exchange.
2. Swiss Bank Program. The U.S. government recently ended their "Swiss Bank Program" a disclosure program that forced Swiss banks to reveal the ways in which they helped U.S. taxpayers evade taxes.
    • Over the three year program, the U.S. gathered information from 80 Swiss banks and collected over $1 billion in penalties from those banks.
    • The program also provided information to the IRS about other jurisdictions that may commonly hide U.S.-owned assets.

3. Data Mining. The IRS also continues to "Data Mine" to gather information provided by the more than 54,000 taxpayers who have filed under the IRS’ Offshore Voluntary Disclosure Program since 2009.

    • The U.S. will use this information to assess what other jurisdictions, foreign banks, and facilitators may be assisting U.S. clients in evading their tax obligations and to assist in future prosecutions.

4. Panama PapersIn April 2016 over 11.5 million financial and legal records from Panamanian law firm Mossack Fonseca where leak to the press, which underscores the risk of public disclosure of financial records related to undisclosed foreign financial accounts.

    • An anonymous source provided the information in the “Panama Papers” leak to various global news organizations that have since been reviewing the files in detail.
    •  The leak created a scandal for many high-profile politicians around the world and forced some to resign.
    • It was revealed that the firm had created over 2,800 companies in offshore havens for over 2,400 U.S. clients as well.
    • While many of these transactions are legal, U.S. taxpayers must fulfill various foreign information reporting requirements with the IRS related to non-U.S. financial accounts and entities, or they face substantial penalties for noncompliance.
    • In response to the Panama Papers, the U.S. government has also proposed and enacted new rules making it harder to conceal the identities of the true owners of companies.
    • The release of the Panama Papers is just the latest example in the ongoing movement around the world to make it harder for taxpayers to hide their assets offshore and evade taxes.
    • Nowhere has this movement been more pronounced than in the U.S., where government officials have repeatedly made clear that continuing to hide financial assets will get more and more dangerous and difficult, and that taxpayers should come forward as soon as possible to come into compliance with their U.S. tax and reporting obligations.

Marini & Associates, PA has assisted several hundred clients with coming into U.S. tax compliance and avoiding the draconian penalties that the IRS may impose on U.S. persons with undisclosed accounts.

Do You Have Undeclared Foreign Income?


 Want to Know if Which OVDP Program is Right for You?

Contact the Tax Lawyers at 
Marini& Associates, P.A.  
for a FREE Tax Consultation

Toll Free at 888-8TaxAid (888) 882-9243


Read more at: Tax Times blog

New US E Business Visa Route for Frustrated Central American, Chineese & Indian Investors

Citizenship applications for the Caribbean island of Grenada have boomed in the last three years.

Reports have emerged that Grenada’s citizenship by investment program, introduced in 2014, is being used to fast-track US E2 visa applications.

Grenada is the only Caribbean country with a fast-track citizenship program, which signed a Commerce and Navigation Treaty with the USA. As a result, Grenada’s citizens are eligible for the US E2 non-immigrant visa. This means Grenadians can secure and US E2 visa with a substantial investment in a US-based business and employing some US citizen or US resident staff.

The rise in Grenadian citizenship applications is partly attributed to the ever-increasing backlog of immigration applications in the US. Citizens of China, El Salvador, Guatemala and India in particular are facing severe delays, with some facing a 10-year wait.

As a result, wealthy foreign investors are applying for citizenship in Grenada and then filing an application for an E2 visa for the US.  The E2 visa category is a non-immigrant visa category which can continue to be extended as long as the business continues in the US.  This may be preferable for some wealthy investors who wish to avoid the possible tax consequences of a green card.

The Grenada citizenship program as a route to gaining an E2 visa may be worth considering for some. However, requires  a significant investment. In some cases you can gain an E2 visa as an investor after investing say tens of thousands of dollars. Much less than the minimum cost of $200,000 for the Grenada Citizenship by investment program.  

The Grenada citizenship program may be worth considering for nationals of Countries not on the E2 Treaty Investor or E1 Treaty Trader country List. It should be noted that Grenada is on the E2 Treaty Investor list.  Not on the E1 Treaty Trader list.  In most cases this probably does not make much difference.

Requirements for Grenada Citizenship 

According to a report published by Forbes, a minimum investment of $200,000 (US) will secure Grenadian citizenship within 12 weeks. Once citizenship is obtained an investor, along with his or her family, can submit an application for an E2 visa in the US. The Forbes report claims that an investor’s entire family could be in the US within 8 weeks.

Overall, obtaining Grenadian citizenship and then applying for a US E2 visa could take less than six months. Once in the US, an investor can acquire an Employment Authorization Document for a spouse, enabling them to work anywhere in the country.

Investors can also send their children to US schools, qualifying for in-state tuition rates and they can travel back and forth freely to their country of origin to take care of business operations back home.
Aside from meeting the requirements for citizenship in Grenada, applying for a US E2 visa would involve incorporating a US company, establishing an office with a legitimate phone number and possibly a website. An investor would need to register with the Inland Revenue Service (IRS), open a bank account and deposit a large sum of money (>$100,000).

Additionally, a viable business plan will be required to establish a company in the US, potentially via a franchise purchase. Meanwhile, any investor would need to speak a basic level of English and have managerial or executive experience, or at the very least, have an idea of how to run their business.

With the possibility of having to wait 10 years and with President Trump ‘attacking’ the H1B and L1 visas, those who can afford to are opting for citizenship in Grenada followed by an application for an E2 visa. So far, the E2 Treaty Investor visa has not made it on to Trump’s radar.

Not Qualify for an E Visa?
Need to Quickly Acquire Citizenship in Grenada?

Contact the Lawyers at 
Marini& Associates, P.A.  
for a FREE Tax Consultation
Toll Free at 888-8TaxAid (888) 882-9243


Read more at: Tax Times blog

All That You Wanted to Know About Form 706NA – Part I

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Read more at: Tax Times blog

50% Owner Liable for Trust Fund Penalty Despite Not Having Primary Responsibility For Taxes.

A district court has determined on summary judgment that a 50% owner of a member-managed company, who was required to sign off on all significant decisions and actions relating to the company, was liable for the trust fund recovery penalty under Code Sec. 6672.

The court found that his role in the company established that he was a responsible person, regardless of whether the other owner had primary responsibility for the company's taxes; and he was found to have acted willfully where he knew (or should have known) that the taxes were unpaid but continued to pay other creditors instead.

U.S. v.Commander, (DC NJ 4/3/2017) 119 AFTR 2d ¶2017-620

 Have a Tax Problem?
Contact the Tax Lawyers at
Marini & Associates, P.A.
 for a FREE Tax Consultation Contact US at or
or Toll Free at 888-8TaxAid (888 882-9243).


Read more at: Tax Times blog