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Monthly Archives: September 2012

A $200,000 UBS Account Grew Into A $21 Million IRS Penalty

Another former holder of a secret UBS AG account got off with probation Tuesday, when federal sentencing guidelines suggested a sentence of six months to a year. But it’s hard to argue that 84-year-old Jules Robbins, a World War II vet who settled in Long Island and built a nice business (Webster Watch) importing and selling watches to the likes of Kmart and Family Dollar Stores, got off cheaply.

Here’s his intriguing tale, as pieced together from documents on file at the U.S. District Court for Southern New York. (Robbins’ lawyers declined further comment.) In 1967, Robbins made a $200,000 deposit into an account with UBS in Vaduz, Liechtenstein, in the name of a Swiss foundation. In 2000, he transferred the account’s balance into a different UBS account in the name of a sham Hong Kong corporation, Waldenburg Finance Ltd.

By the end of 2007, the $200,000, largely invested in U.S. stocks, had grown to $41.7 million, a 14% annual average compounded return and three points better than the S&P 500. In addition to apparently smart stock picking, the account benefitted from decades of tax evasion; during that period, Robbins never reported the account, or any of its capital gains or other earnings to the Internal Revenue Service.
Then came 2008, not a good year for Robbins. The market crashed, and the securities in his Swiss account “lost approximately half of their value” according to a pre-sentencing memo filed by his attorneys. Plus, the federal government was closing in on the names of U.S. customers with unreported accounts at UBS. Robbins hired lawyers, filed back FBARs, sent $1 million to the IRS and began putting together accurate amended returns for 2002 through 2007.

As part of his 2010 plea deal, Robbins agreed to pay a hefty FBAR penalty—$20.8 million, or 50% of that bull market 2007 balance of $41.6 million. That was more than was left in the account and Robbins was forced to tap assets outside his UBS account to pay the penalty. In their sentencing memo, Robbins’ lawyers said the penalty wiped out 78% of his net worth. By contrast, California real estate developer Igor Olenicoff paid just $52 million in back taxes, fines and civil fraud penalties for hiding more than $200 million off shore.

“Unlike a defendant with an undisclosed cash account, Mr. Robbins is paying a penalty on the basis of unrealized gains that have long since evaporated,’’ his attorneys noted in their sentencing memo.

If you have Unreported Income From Swiss Banks, contact the Lawyers at Marini & Associates, P.A. for a FREE Consultation at www.TaxAid.usor www.TaxLaw.msor Toll Free at 888-8TaxAid (888 882-9243).

Call US before Uncle Sam finds you!




Read more at: Tax Times blog

Instructions – New Streamlined Filing for Non-Resident & Non-Filer U.S. Taxpayers!

On June 26, 2012, the IRS announcednew Streamlined Filing Compliance Procedures for non-resident U.S. taxpayers to go into effect on September 1, 2012. These new procedures are for non-residents including, but not limited to, dual citizens who have not filed U.S. income tax and information returns. The IRS website now has specific instructions for this Streamlined Compliance Procedure. 

Taxpayers utilizing this procedure will be required to file delinquent tax returns, with appropriate related information returns (e.g. Form 3520 or 5471), for the past three years and to file delinquent FBARs (Form TD F 90-22.1) for the past six years. Payment for the tax and interest, if applicable, must be remitted along with delinquent tax returns.

In addition, retroactive relief for failure to timely elect income deferral on certain retirement and savings plans where deferral is permitted by relevant treaty is available through this process. The proper deferral elections with respect to such arrangements must be made with the submission.


This procedure is available for non-resident U.S. taxpayers who have resided outside of the U.S. since January 1, 2009 and who have not filed a U.S. tax return during the same period. These taxpayers must present a low level of compliance risk as described below.

Amended returns submitted through this program will be treated as high risk returns and subject to examination, except for those filed for the sole purpose of submitting late-filed Forms 8891 to seek relief for failure to timely elect deferral of income from certain retirement or savings plans where deferral is permitted by relevant treaty.

It should be noted that this relief is also available under the Offshore Voluntary Disclosure Program.

All tax returns submitted under this procedure must have a valid Taxpayer Identification Number (TIN). For U.S. citizens, a TIN is a Social Security Number (SSN). For individuals that are not eligible for an SSN, an Individual Taxpayer Identification Number (ITIN) is a valid TIN. Tax returns filed without a valid SSN or ITIN will not be processed. For those who are ineligible for an SSN, but who do not have an ITIN, a submission may be made through this program if accompanied by a complete ITIN application.

Compliance Risk Determination

The IRS will determine the level of compliance risk presented by the submission based on information provided on the returns filed and based on additional information provided in response to a Questionnaire required as part of the submission.

Low risk will be predicated on simple returns with little or no U.S. tax due. Absent any high risk factors, if the submitted returns and application show less than $1,500 in tax due in each of the years, they will be treated as low risk and processed in a streamlined manner.

The risk level may rise if any of the following are present:

· If any of the returns submitted through this program claim a refund;
· If there is material economic activity in the United States;
· If the taxpayer has not declared all of his/her income in his/her country of residence;
· If the taxpayer is under audit or investigation by the IRS;
· If FBAR penalties have been previously assessed against the taxpayer or if the taxpayer has previously received an FBAR warning letter;
· If the taxpayer has a financial interest or authority over a financial account(s) located outside his/her country of residence;
· If the taxpayer has a financial interest in an entity or entities located outside his/her country of residence;
· If there is U.S. source income; or
· If there are indications of sophisticated tax planning or avoidance.


Other Considerations

Taxpayers who are concerned about the risk of criminal prosecution should be advised that this new procedure does not provide protection from criminal prosecution if the IRS and Department of Justice determine that the taxpayer's particular circumstances warrant such prosecution.

Taxpayers concerned about criminal prosecution because of their particular circumstances should be aware of and consult their legal advisers about the Offshore Voluntary Disclosure Program (OVDP), announced on January 9, 2012, which offers another means by which taxpayers with undisclosed offshore accounts may become compliant.

It should be noted, however, that once a taxpayer makes a submission under the new procedure described in this document, OVDP is no longer available.

It should also be noted that taxpayers who are ineligible to use OVDP are also ineligible to participate in this procedure.

If you would like to avail yourself of this new Amnesty, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at or or Toll Free at 888-8TaxAid (888 882-9243).


Read more at: Tax Times blog

End of Banking Secrecy for Switzerland?

Swiss Banker are all shaking their heads saying, ‘In 40 years of operations we’ve never had a crisis like this one – a war like the one being waged against the Swiss banking system. We’re in the artillery sights of every country and every day there are new attacks’,” recounted Paolo Bernasconi, a business law professor at St Gallen University and former Ticino public prosecutor.

"Many bank directors are unable to leave Switzerland because they risk being arrested.”

The storm sweeping through the Swiss banking sector can also have terrible consequences for those not directly involved. In August, the two teenage sons of a Geneva banker who flew to the US on holiday were detained by customs officials on arrival and grilled about their father’s activities.

“For 50 years, Swiss banks have lived by the following rule: we strictly uphold Swiss legislation while ignoring foreign legal norms. This has earned us a great deal of money – not just for the banks, but us as well,” Bernasconi said.

“Today we’re paying the price. But it’s not just those who were responsible in the past who are paying for it, but the new generation as well; they are losing their jobs and suffering from the impact of the crisis.”

Not so long ago, bank directors and politicians claimed that banking secrecy was “not negotiable”. But they underestimated the speed with which attitudes were changing in the international fight against tax evasion.

In 2009 when the G20 and the Organisation for Economic Co-operation and Development (OECD) officially took up the battle against banking secrecy, Switzerland was placed on a grey list of countries accused of not cooperating on tax matters. 

To avoid ending up on a blacklist, Switzerland was obliged to urgently adopt a range of OECD standards, including ending the historic distinction between tax fraud and tax evasion, which was unacceptable for other countries.

Under pressure from the US, the Swiss were also forced to hand over data on thousands of clients of Swiss banks to American authorities.

To avoid the automatic exchange of tax information, which would effectively mean the end of banking secrecy, the government is currently pursuing a new path – negotiating bilateral tax treaties, known as Rubik accords, with interested countries.

Bilateral tax agreements have already been signed with Germany, Britain and Austria. Switzerland has agreed to levy a punitive retroactive tax on undeclared capital to regularize the past and apply a withholding tax to future interest income from those accounts.

But right-of-centre Swiss parties have launched a referendum against the three Rubik treaties already signed.

These tax agreements serve as a guaranteed amnesty for Swiss bankers who today can no longer risk leaving Switzerland. 

In the face of such unprecedented attacks, will the Swiss banking industry be able to survive the death of banking secrecy or is there a risk it will lose huge amounts of managed funds?

If you have Unreported Income From Swiss Banks, contact the Lawyers at Marini & Associates, P.A. for a FREE Consultation at www.TaxAid.usor www.TaxLaw.msor Toll Free at 888-8TaxAid (888 882-9243).

Call US before Uncle Sam finds you!




Read more at: Tax Times blog