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Re: Insight Into IRS Approach to Offshore Evasion

Posted: Thu Dec 08, 2016 1:36 pm
by john
JHyre wrote:Fascinating (for me anyway) story of tax evasion, banker marketing info to governments for personal profit and disappearing, along with some insight into how the IRS goes after offshore evasion. For the more technically minded, the linked articles are very good. In particular, one of those articles in turn links to a PDF of an IRS agent's rather thorough report on how the IRS views offshore evasion, and why it needed (and received) broad powers to go after it. I tried to attach a PDF of that report, but it was too big, I can email it for those who are interested.

It could also be that my concept of "fun" reading is warped. To skip the initial tax jargon, scroll down about 20% of the way to the Greenfield story, just past the "Greenfield decision".

http://procedurallytaxing.com/grinches- ... mons-tale/

John Hyre


Very interesting Article! Thanks for sharing. However, the "How Grinch Stole Christmas" reference more accurately reflects the dubious activities of offshore tax evasion scam artists (and their "hear no evil, see no evil" clientele). :wink:

Re: FATCA repeal introduced to the house of reps

Posted: Thu Dec 08, 2016 2:12 pm
by JHyre
john,

I think the writer was writing with tongue firmly planted in cheek. Professors of tax law are generally not fans of tax evasion. Especially professors who worked for the IRS for 20 or so years.

Interesting stuff for certain values of "interesting".

John Hyre

Re: FATCA repeal introduced to the house of reps

Posted: Thu Dec 08, 2016 3:36 pm
by john
JHyre wrote:john,

I think the writer was writing with tongue firmly planted in cheek. Professors of tax law are generally not fans of tax evasion. Especially professors who worked for the IRS for 20 or so years.

Interesting stuff for certain values of "interesting".

John Hyre


John, I accept your interpretation. Always appreciate receiving interesting stuff from you! :wink:

Re: FATCA repeal introduced to the house of reps

Posted: Fri Dec 09, 2016 7:18 am
by admin
That was a pretty good read. Makes me wonder how many millions of dollars the irs spends to get 1 dollar of tax revenue, especialy the high cost cases involving foreign jurisdictions.

Re: FATCA repeal introduced to the house of reps

Posted: Sat Dec 10, 2016 12:21 am
by Zenth
Statistically, the IRS collects about ten dollars for every dollar it spends to audit someone..

Re: FATCA repeal introduced to the house of reps

Posted: Sat Dec 10, 2016 7:40 am
by admin
Yea it is super cheap to send a letter to grandma for a little more info about her big win in vegas, but once you cross international lines all the costs go up. Thus, facta designed to get all the private finacial institutions to just email them every ones info. Even people that are not being audited nor even american citizens.

I had a look at a few international banks and brokers around the world last year. Almost all of them require a filing a tax withholding declaration for the u.s. irs, regardless of your nationality, to open an account. That brings u.s. over reach to a whole new level.

Re: FATCA repeal introduced to the house of reps

Posted: Sat Dec 10, 2016 7:49 am
by admin
Here is an article about trump repealing facta. What is interesting is the comperative stats of financial health of american expats vs. Other expats.

I would tend to say that our own experience with our clients tends to follow that pattern. Never examined it closely.

https://www.thestreet.com/story/1391501 ... fatca.html

Re: FATCA repeal introduced to the house of reps

Posted: Wed Jan 11, 2017 10:10 am
by admin
this is worth quoting at length, from the irs report to congress, from the tax payer advocacy office yearly report. I have not read the full report, but this from the intro to the intro:
https://taxpayeradvocate.irs.gov/report ... ull-report

FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA): The IRS’s Approach to
International Tax Administration Unnecessarily Burdens Impacted Parties, Wastes
Resources, and Fails to Protect Taxpayer Rights
Problem
The Foreign Account Tax Compliance Act (FATCA) was passed in 2010 in response to IRS and
congressional concerns that U.S. taxpayers were not fully disclosing the extent of financial assets held
abroad. The concerns giving rise to FATCA are understandable. Nevertheless, the IRS’s approach to
implementing FATCA and related international provisions has created significant compliance burdens
and risk exposures to a variety of impacted parties including non-resident aliens, U.S. citizens living
abroad, and foreign financial institutions (FFIs).
Analysis
The IRS has adopted an enforcement-oriented regime with respect to international taxpayers. Its
operative assumption is that all such taxpayers should be suspected of fraudulent activity, an outlook
that causes the IRS to mistrust stakeholders, dismiss useful comments and suggestions, and misallocate
resources. This perspective has resulted in the IRS unnecessarily freezing over 102,000 refund claims of
non-resident aliens, many of which were filed by low risk international students, and proposing Internal
Revenue Code (IRC) Chapter 3 and Chapter 4 regulations that would explicitly make the availability
of credits and refunds to covered taxpayers contingent on the actions of withholding agents. U.S.
expatriates have also reported suffering significant banking “lock-out” as a result of FATCA, while all
U.S. citizens are potentially subject to the revocation or denial of passports in the case of certain tax
liabilities. FFIs also continue to face regulatory uncertainty, reputational risk, and ongoing expenditures
regarding FATCA and related information reporting obligations. The IRS could achieve better results
and reduce hardships placed on taxpayers and FFIs if it took a collaborative, service-based approach
that focused on identifying the relatively few bad actors and recognizing the good faith efforts of the
compliant majority.
Recommendations
The National Taxpayer Advocate recommends that the IRS implement policies and procedures for
reviewing and issuing Chapter 3 and Chapter 4 refund claims that mirror those processes currently in
place with respect to domestic taxpayers under IRC § 31 and related regulations; adopt a same country
exception that excludes from FATCA coverage financial accounts held in the country in which a U.S.
taxpayer is a bona fide resident; protect taxpayers from harsh application of the law allowing revocations
and denials of passports by broadly interpreting discretionary exclusions, encouraging expansive
definitions of humanitarian exceptions, and allowing for an administrative appeal and notification of
TAS assistance before passport revocation or denial occurs; and reduce burdens on FFIs by adopting
a collaborative model of tax administration that encourages FFIs to correct erroneous reporting and
focuses on providing the clarity and consistent guidance needed for reasonable, cost-effective compliance
with FATCA.