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Monthly Archives: April 2012

Another FBAR conviction

On April 20, 2012, in a huge win for the government, a jury found Attorney Rick Matsa of Ohio guilty of one count of willfully failing to file a Report of Foreign Bank and Financial Accounts (FBAR).

The Justice Department and Internal Revenue Service (IRS) announced on April 20, 2012 that attorney Aristotle “Rick” R. Matsa, of Worthington, Ohio, was convicted of numerous tax fraud and obstruction of justice related offenses, including witness tampering and making a false statement.
In addition, Rick Matsa and his mother, Loula Z. Matsa, were convicted of conspiracy to obstruct justice, commit perjury, and make false statements, following a five-week trial in Columbus, Ohio, before the Honorable Edmund A. Sargus Jr.
Attorney Matsa faces a potential sentence of 108 years imprisonment and a fine of up to $3.25 million.  In addition, mother Loula Matsa faces a potential sentence of five years imprisonment, a fine of $250,000 Read this article to learn how to get FBAR help to avoid this tragedy happening to you.
If you’re a U.S. citizen, or if you have permanent residence status (a ‘green card’) or visa, you must declare any income earned in the U.S. or abroad on your annual IRS tax filing. This includes investment income, bank account interest, and any other asset that generates income.
If you you’ve failed to report income and filing an FBAR , you can be prosecuted for federal tax evasion – a felony – which as Attorney Matsa and his mother found out, is a felony which carries huge jail time and staggering fines.
The IRS’s focus and attention is all about offshore accounts. From criminal to audits, the IRS is training and hiring huge amounts of new staff to crack down on people they feel are breaking the law.
 Department of Justice's take on this conviction:

“Today’s verdict shows that attorneys and other professionals who violate the tax laws or who attempt to obstruct justice will be held accountable for their actions,” said Assistant Attorney General for the Tax Division Kathryn Keneally. “Those who illegally attempt to hide their income and assets from the IRS through fraudulent trusts or offshore bank accounts will be prosecuted and punished.”

“Those Americans who file accurate, honest and timely tax returns can be assured that the government will hold accountable those who don’t,” said Rick A. Raven, Acting Chief, IRS Criminal Investigation.”


The experienced Tax Attorneys at Marini and Associates, PA can help you resolve your FBAR Problems!

We want our clients to make the best decision when they are presented with uncomfortable facts in this highly-aggressive FBAR enforcement climate.

We’ve helped clients understand how to weigh advantages of the 2012 Offshore Voluntary Disclosure Initiative (OVDI)and calculate risks when confronted with other choices such as “quiet” or “soft” disclosure and expatriation, along with the risk of doing nothing. 

It has never been more important to get FBAR help than it is now!
For FBAR HELP contact the Tax Attorneys at Marini and Associates PA, at our website www.TaxLaw.ms or call usToll Free at (888) 882-9243 (888 8TAXAID).

Read more at: Tax Times blog

States review more Federal Tax Returns looking for Additional Revenue.

The Internal Revenue Service made almost 9 billion disclosures of tax returns or return information in calendar year 2011 to Congress, federal agencies, and other entities allowed to receive the information in accordance with the tax code, the Joint Committee on Taxation said April 24.
The total number of disclosures was higher than the 7.03 billion made in 2010, but significantly above the 7.59 billion in 2009 and the 5.42 billion in 2008, according to the JCT's annual disclosure report (JCX-38-12).

Disclosures to individual states represented the highest number of disclosures, at 6.91 billion. Information was released to state tax officials to administer state tax laws.

A copy of the JCT report Disclosure Report For Public Inspection Pursuant To Internal Revenue Code Section 6103(P)(3)(C) for Calendar Year 2011.

Read more at: Tax Times blog

TAX GAP – Sources of Noncompliance and Strategies to Reduce It

Noncompliance cannot be attributed to a single source, but is found with a variety of taxes and categories of taxpayers, a Government Accountability Office (GAO) official said in congressional testimony on April 19. (GAO-12-651T).
While individual income tax accounts comprise the largest segment of the tax gap, corporate income tax and employment tax are also "significant," said James White, director of strategic issues for GAO.

In addition, misreporting by individuals-involving business income, non-business income, deductions and credits-is noteworthy, he said. "Much of this misreporting can be attributed to sole proprietors underreporting receipts or over-reporting expenses," White said. "Unlike wage and some investment income, sole proprietors' income is not subject to withholding and only a portion is reported to IRS by third parties," he added.

The gross tax gap is the difference between the estimated amount taxpayers owe and the amount they voluntarily and timely pay for a tax year. It was $450 billion for tax year 2006. The net tax gap, which takes into account revenue collected through enforcement actions and late payments, was $385 billion. Multiple approaches must be taken to reduce the tax gap, White said, including the following: enhancing information reporting by third parties to IRS; ensuring high-quality services to taxpayers; devoting additional resources to enforcement; expanding compliance checks before IRS issues refunds; leveraging external resources, such as paid tax return preparers and whistleblowers; modernizing information systems; and simplifying the Code. For more of White's testimony.

IRS must overcome "institutional impediments" to effectively deal with the tax gap, J. Russell George, the Treasury inspector general for tax administration, said in testimony before a panel of the House Oversight and Government Reform Committee on April 19.

George found problems with IRS's estimate that it would eventually collect, via enforced and other late payments, an estimated $65 billion due for tax year 2006 when the estimated gross tax gap was $450 billion. "Both types of payments were estimated using IRS data of prior revenue and late payments received," he said. "However, the IRS does not have good data on the amounts that are paid late without enforcement efforts, and amounts to be collected in future years were estimated using data on payment patterns from earlier years." For more of George's testimony.

Read more at: Tax Times blog

UBS head calls tax flap ‘Economic War'.

Switzerland’s tax disputes with the United States and some European nations are “an economic war’’ putting 20,000 jobs at risk, the CEO of Swiss banking giant UBS AG has been quoted as saying. 

Switzerland has recently tried to shed its image as a tax haven, signing deals with the United States, Germany and Britain to provide greater assistance to foreign tax authorities seeking information on their citizens’ accounts in the Alpine nation.

But the tax agreements have drawn fire from Switzerland’s nationalist People’s Party, which won more than a quarter of the vote in last year’s general election, with some lawmakers saying they will try to block the treaties through referendums.
Sergio Ermotti, who was appointed CEO of Switzerland’s largest bank in November in the wake of a trading scandal, says Switzerland now is “stuck in the middle of economic warfare’’ and its opponents’ goal is to weaken UBS and the next biggest bank, Credit Suisse, according to Zurich Sunday newspaper SonntagsZeitung.

The banks’ rivals seek a share of their combined foreign assets of 2.2 trillion Swiss francs ($2.42 trillion), forcing UBS to cut costs and imperiling 20,000 jobs, Ermotti also was quoted in the Sunday paper as saying.

Read more at: Tax Times blog