The U.S. Department of Justice is considering actions against taxpayers who wrongfully used the Streamlined Procedures to assert non-willful conduct. As quoted in Tax Notes Today:
The use of Bitcoin has both legal and potentially illegal applications. Bitcoin is just a contemporary version of the Informal Value Transfer System, ("IVTS") which in some countries is known as the Hawala. The IVTS has been used for international money transfers according to the Financial Crimes Enforcement Network (FinCen) for the following reasons:
"IVTS-type networks operate in parallel with formal financial institutions or as a substitute or alternative for them. United States citizens, persons (legally or illegally) residing in this country from foreign countries, and individuals living in other nations may prefer or need to use IVTS in lieu of formal financial institutions for various reasons as described below:
What happens when a taxpayer operates a cash based business and lacks adequate books and records according to the IRS? The IRS can use any reasonable method to reconstruct the taxpayers income and expenses. (See, Estate of Rodrigo F. Fenta, et al. v. Commissioner, TC Summary Opinion 2015-4 )
According to Tax Notes Today (January 23, 2015) Boris Johnson the Mayor of London has settled tax claims of the IRS. The claim arose because Johnson who holds U.S and U.K. citizenship sold his residence at a gain and failed to report the gain for U.S. income tax purposes. Johnson, who apparently travels to the U.S. and had pending travel plans must have feared that the IRS/DOJ would detain Johnson on entry into the U.S. under Internal Revenue Code Section 7402. As stated in Tax Notes Today,
Voluntary Disclosures take two forms, Offshore and Domestic. There has been a great deal of attention paid to Offshore Voluntary Disclosure Programs, but little attention has been paid to the Domestic program.
In a series of Frequently Asked Questions releases December 31, 2014, The Congressional Research Service provides some guidance on when non-U.S. citizens may be subject to U.S. income taxes.
The future for offshore tax planning, also known as "aggressive tax planning" is likely to be limited to if not curtailed by the global exchange of information agreement signed in October, 2014 by 51 countries and growing. The link below is to a video summary of the predicted consequences of the new agreement.
The just passed budget deal known as Consolidated and Further Continuing Appropriations Act, 2015 contains a reduction in funding for the IRS. The Bill provides a reduction in total IRS funding of $346 million less than last fiscal year.
The recent decision of the U.S.Tax Court, in Gerd Topsnik, (2014) makes it clear that an "informal" surrender of a Green Card, while recognized under immigration laws is not recognized for tax purposes.
Welcome to 1984 30 years later!
One of the most famous quotes from George Orwell's 1984 is "Big Brother is Watching You.". This quote is more true now than at any time in past. At the just concluded Global Forum on Tax Transparency convened by the OECD/G20 51 countries signed on to the automatic exchange of tax information.