The Tax Code provides that when a person fails to pay taxes in a timely fashion, the Internal Revenue Service is authorized to assess penalties and interest on the tax bill. The penalty is assessed as a percentage of the tax owed, and if the debt remains unpaid, the penalty percentage increases. Over time, what was once a relatively manageable tax bill can burgeon into a towering debt.
The Foreign Account Tax Compliance Act is back in the news again. But the legislation is making waves not in Washington, D.C., but rather an ocean away in the halls of Parliament. Legislators in the United Kingdom have expressed admiration for FATCA and, in a recently released committee report on offshore tax evasion, suggested that the government adopt a similar measure for UK citizens.
The U.S. is not the only nation going after alleged instances of offshore tax evasion. Germany has also been aggressively hounding Swiss banks that it believes its citizens have used to shelter income from the reach of taxing authorities. Germany has negotiated a deal with Switzerland to combat tax evasion, but now some German lawmakers want to create a new agreement that is similar to the account holder information disclosures that we have discussed previously on our Miami tax blog.
Florida residents may remember the March resignation of Richard Rober, the onetime mayor of Port Richey. He left office after he learned that he would be facing tax fraud charges in connection with the water treatment business he once ran with his wife. He and his spouse pleaded guilty to the charges, and today a federal judge handled down their sentences.
Eight years ago, two business partners and friends, one a man from Florida, decided to enter into real estate investing. One man principally did the fundraising, while the other, who lived in Naples, was supposed to do the purchasing. But according to charges leveled by federal prosecutors, much of that money was used instead for his personal benefit.
HSBC appears to be the latest bank caught in the searchlight trained on offshore tax evasion. The U.S. Department of Justice has been investigating claims that Swiss branches of that bank aided U.S. taxpayers with offshore bank accounts shelter income from the reaches of the Internal Revenue Service.
A number of prior posts on our Miami tax law blog have dealt with the increasing reach of the Foreign Account Tax Compliance Act, or FATCA. It appears that the U.S. Treasury Department is continuing to make progress in getting other nations to agree to its terms. After reaching deals with a number of European nations and Japan, Treasury has made clear that other countries have two options when deciding to comply with FATCA.
Florida Senator Marco Rubio has recently introduced legislation that would provide another change to the nation's Tax Code. But unlike some of the broad, sweeping changes legislators have debated in recent months and which will constitute a significant portion of the political discourse during this fall's campaigns, Sen. Rubio's proposal is narrow and designed to apply to a rarified group of Americans: Olympic athletes who medal in their events.
Late last week, the United States announced it has submitted a new request to Switzerland for information regarding the accounts of former clients of Credit Suisse who are suspected of not paying their U.S. taxes. The new request comes after a Swiss court blocked an earlier effort.
Miami is the source of approximately $280 million in illegitimately claimed tax refunds, according to a recently released report by the Treasury Inspector General for Tax Administration, the body that monitors the Internal Revenue Service. The report documents the increase in identity theft and tax fraud and suggests steps that the IRS should continue to take in order to address them.