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Fort Worth Tax Law Blog

Swiss bank reserves $24 million to pay U.S. tax fine

In May, the U.S. Justice Department reported reaching a plea agreement with Credit Suisse AG. The bank pleaded guilty for helping U.S. taxpayers evade taxes. Under the plea agreement, the bank will pay a penalty of $2.6 billion. The plea came after years of investigations.

As this big settlement made headlines, more than 100 Swiss banks quietly signed onto a Justice Department voluntary disclosure program. These banks will avoid indictments for their part in helping American clients hide assets offshore. The banks must pay fines and give information on their wealth management businesses to the Internal Revenue Service.

Swiss bank EFG International AG recently said that it put aside 21.4 million Swiss francs or $24 million to cover expected penalties related to a U.S. tax evasion probe.

Texas business owner arrested on charges of tax fraud

Owning a business requires sound record keeping when tracking expenses. Whether filing a corporate return or a schedule C on your individual return improper deductions designed to lower personal income may lead to a tax fraud investigation.

This week, a federal court in Texas unsealed an indictment against the owner of a corporation. Allegations contained in a four-count indictment claim the owner made willful and material false statements on his personal tax return.

The charges cover federal income tax returns from 2007 to 2010. He purportedly under-reported the income he earned during these years.

New stiffer penalties for Offshore Voluntary Disclosure Program

Compliance with the law routinely depends upon a carrot and stick approach.

We recently discussed the new streamlined filing measure for those who have failed to disclose foreign accounts. For Americans living abroad it was good news: an expanded program and reduced penalties.

The story is much different for anyone in the U.S. who willfully failed to disclose an offshore account. These individuals will face much larger tax penalties after August 4, 2014. This post will explain the change in approach.

Chinese residents may receive more scrutiny from IRS

In 2010, Congress sought to close the tax gap by going after those who failed to pay tax on their offshore accounts. The law, titled the Foreign Account Tax Compliance Act or FATCA, went into effect this week.

U.S. persons (citizens, residents and entities) need to disclose any foreign accounts which more than $10,000 each year or face serious penalties.

For the past three years, the number of Chinese immigrants to the U.S. each year has been second only to Mexico. Almost 80 percent of the EB-5 investor visas went to Chinese nationals. In general, only wealthy individuals can qualify for investor visas, because investment requirements start at $500,000. Wealth left in Chinese accounts is generally subject to U.S. tax laws. 

Update on offshore disclosure: IRS aims for wider compliance

One of the threads we've been developing in this blog is offshore account disclosure.

In recent years, U.S. authorities have been cracking down aggressively on taxpayers who allegedly failed to meet foreign account disclosure requirements. In our May 12 post, for example, we wrote about a tax evasion case involving H. Ty Warner, the founder of "Beanie Babies" toys.

The judge gave a sentence of probation in that case rather than a prison term.

In today's post, we will take note of some of the changes that the IRS announced this week that are supposed to make offshore compliance easier for taxpayers.

Is all income taxable or are there exceptions?

Uncle Sam has been hard up for cash in recent years. Last year, for example, the long-running budget battles between the president and Congress led to a partial shutdown of the federal government that lasted for more than two weeks.

But just because the U.S. government needs revenue does not mean that every conceivable type of income is taxable. That just isn't the way the federal tax code is set up.

In this post, we will discuss the difference between taxable and nontaxable income.

Alimony and income matching: TIGTA concerned about discrepancy

Divorce is a common experience in modern America.

To be sure, a couple of generations ago it wasn't. But there has been a sociological sea-change on the issue. And as research by a University of Texas professor, Jennifer Glass, has shown, the rate in Texas exceeds the national average.

With so many divorces occurring, a lot of money changes hands in alimony payments. These payments are tax deductible for the person paying them, but are considered taxable income for the recipient.

In this post, we will take note of recent report showing a discrepancy between the amount of alimony income that is supposed to be reported and the amount that is actually reported.

Worker classification in the construction industry: an update

It’s been awhile since we last wrote about the issue of worker classification in the construction industry in Texas.

It has long been known that the percentage of workers in the construction industry here who are improperly classified is very high. As we noted in our August 22 post last year, one study put it at 40 percent.

The issue does not only have consequences for payroll tax compliance. It also affects workers’ compensation eligibility and Fair Labor Standards Act compliance.

In this post, we will take note of the fact that both business and labor groups are arguing that Texas requires more regulation to clarify the applicable standards.

Tax levy basics: what is it and what does it do?

It's been awhile since we've discussed the difference between a tax levy and a tax lien.

To be sure, the words themselves sound rather dry. But if it's a matter of having your wages seized or making it difficult to sell your house, being clear on what the terms mean is important.

In this post, then, we will explain what a tax levy does and how it differs from a tax lien.

Congress seeks to revise back tax collection policies

Unpaid tax bills can haunt Americans for years. Currently, the Internal Revenue Service (IRS) deals with tax collection for unpaid bills in a myriad of potentially frustrating ways. However, individuals who fail to pay their taxes on-time may soon have to face an even more frightening debt collection foe than the IRS.

New York Senator Chuck Schumer recently inserted a provision into a large piece of tax legislation that would require the IRS to turn over millions of outstanding tax bills to privately funded debt collectors. A similar program was previously repealed after numerous complaints were filed insisting that private debt collectors were treating debtors in harassing ways.

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