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Faced 5+ Years in Prison

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Covered by NYDaily News. Las Vegas man accused of threatening a prominent attorney and making vile remarks.

Faced 10+ Years in Prison

People Vs. Anna Sorokin

Covered by New York Times, and other outlets. Fake heiress accused of conning the city’s wealthy, and has an HBO special being made about her.

Faced 3+ Years in Prison

People Vs. Genevieve Sabourin

Accused of stalking Alec Baldwin. The case garnered nationwide attention, with USAToday, NYPost, and other media outlets following it closely.

Faced Potential Charges

Ghislaine Maxwell Juror

Juror who prompted calls for new Ghislaine Maxwell trial turns to lawyer who defended Anna Sorokin.

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New Streamlined FBAR Filing

New ‘Streamlined’ FBAR Filing

If you work with clients whom you believe have funds in foreign countries, it makes sense to inform them that they are obligated to file a Foreign Bank and Financial Account Report, TD F 90-22.1, also referred to as the FBAR. If they live mainly overseas, they may benefit from some of the recent revisions in IRS procedures for persons who neglected to file FBARs in the past.

All U.S. persons who have a financial interest in or signatory authority over foreign financial accounts with a total account balance upwards of $10,000 at any point during the calendar year must file an FBAR. U.S. citizens, as well as permanent legal residents, or “green card” holders, and those who are physically present in the U.S. for more than 183 days during the calendar year qualify as U.S persons and are responsible for filing. Intentionally neglecting to file an FBAR can result in both criminal and civil penalties

The civil penalty is the greater of 50% 

of the account balance, or $100,000. The IRS can assess this fine annually. Over the last few years, the IRS has had a number of programs under which errant taxpayers who did not file FBARs could be spared the criminal penalties and just pay a lower civil penalty. The latest version is the 2012

Offshore Voluntary 

Disclosure Program (OVDP). In this version, taxpayers are required to file eight years of amended returns along with multiple additional documents, checks for overdue taxes, a 20% “accuracy related” penalty on the taxes pursuant to Internal Revenue Code Section 6662, interest on the totals, plus a onetime “offshore penalty” equivalent to 27.5% of the highest balance in the offshore accounts. Late filing and late payment penalties (under Internal Revenue Code Sections 6651(a)(1) and (2)) could also apply according to the specific circumstances.

For persons for whom their combined offshore account balances never exceeded $75,000 at any time during the past eight years, the penalty is reduced from 27.5% to 12.5% under OVDP. All other penalties continue to apply. The penalty can be as low as 5% penalty in very rare situations.

The IRS’ website offers an explanation of the 2012 OVDP in a list of more than 50 FAQs, many with subparts. There is also an OVDP hotline one can call for answers to their questions that inevitably arise after reading the FAQs. Nonetheless, for taxpayers venturing for the first time into the OVDP, and its alternative programs, there are multiple pitfalls. 

Towards the end of the summer season, the IRS put new, more efficient, Filing Procedures for non-resident, non-filer U.S. taxpayers who “unwittingly” failed to file FBARs, but then were apprised of their responsibility and wished to comply. Non-residents, including dual citizens, who have not filed U.S. tax returns may be able to take advantage of the new provisions. Ironically, if tax returns were filed then the so-called Streamlined Procedure is not an option.

The new Streamlined Filing Compliance 

Procedures became effective on the 1st of September. Qualifying taxpayers will only 

Be required to file three years of  tax returns instead of the usual eight under OVDP. The IRS does not levy FBAR fees or any other 

penalties on people who qualify. Participants 

fill out a questionnaire, which asks such potentially incriminating questions as “Did you know you had a Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1, filing requirement when you failed to file an FBAR?” and “If you used a tax professional, did you disclose the existence of the accounts/entities you hold outside your country of residence to your tax professional?” 

To be eligible for the Streamlined Procedure, taxpayers must have resided outside of the U.S. since Jan. 1, 2009, must not have filed a U.S. tax return during the same period, and are required to present a “low level compliance risk.” To be considered a low level compliance risk, the tax due for 2009, 2010 and 2011 must be less than $1,500 in each of those years. That said, even if the tax due is that low, the presence any of the following factors would cause compliance risk to rise and render the taxpayer ineligible to participate.

These factors are:

  • If any of the returns submitted through this program claim a refund;
  • If there is material economic activity in the U.S.;
  • If the taxpayer has not declared all of his or her income in his or her country of residence;
  • If the taxpayer is under audit or investigation by the IRS;
  • If FBAR penalties have been previous-ly 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 or her country of residence;
  • If the taxpayer has a financial interest in an entity or entities located outside his or her country of residence;
  • If there is U.S. source income; 
  • If there are indications of sophisticated tax planning or avoidance.

If the IRS finds that the application Streamlined Compliance Procedure does not qualify, the taxpayer may not participate in the basic OVDP, and may also be required to submit to a complete audit and could possibly incur full blown FBAR penalties, and even criminal prosecution. Attorneys should never recommend the Streamlined Compliance Procedure to their clients without laying out all the risks.

A lot of immigrants, and even U.S citizens who live abroad, hold accounts for which they are responsible for filing an FBAR. The IRS continues to ramp up its enforcement activities with a multitude of international agreements and more abundant resources dedicated to seeking out unreported foreign income. As a result, many taxpayers are subject to potentially confiscatory penalties, and it is in their best interest to consider all of their options carefully.


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