Saturday, May 12, 2012

Moneyball on Go-Forwards - Show Me the Data (5/12/12)

I had a comment posted today here as follows:
Many Americans Abroad Surprised by Tax Code's Nasty Bite
http://nyti.ms/JFY6x9
From the above article
FBAR forms filed in 2009 276,386
filed in 2011 618,134
The commenter was referring to statistics in the following article: Brian Knowlton, Many Americans Abroad Surprised by Tax Code's Nasty Bite (NYT 5/10/12), here.

I will use a separate blog entry to respond to this data.  My response is in the form of a question to which I hope readers will respond, particularly readers with some experience with criminal tax practice.

I suspect that the bulk of the delta filers between 2009 and 2011 (app 340,000, including the first time filers in 2010) are had accounts prior 2010 who did not join OVDI or do a quiet disclosure.  Let's just say that 250,00 of them are first time filers in 2010 or 2011 who had accounts in prior years but did not join OVDI or make a quiet disclosure.  They are the go-forward data set.

How many do you think will be (a) investigated criminally for past years or (b) prosecuted for past years?

Keep in mind that DOJ Tax CES prosecutes at most, say, 3,000 tax cases (max) of all sorts every year.

And, a related question, how do you think the IRS will investigate civilly -- well audit, even if not civilly (sorry for the pun -- in enough detail to consider significant civil penalties?  Keep in mind in this regard that well-advised taxpayers doing a go-forward will have self-selected a data set in which the IRS will not be able to assert or sustain significant penalties in the bulk of the cases.  And, if the IRS perceives that, will it nevertheless divert major resources -- which are limited and will take away from other enforcement efforts -- to chase down relatively small penalties?  Finally, keep in mind that the FBAR penalties the IRS asserts after this major audit enforcement initiative would then have to be followed by more civil litigation enforcement than either DOJ Tax or the Courts likely have otherwise uncommitted resources to handle.

55 comments:

  1. This is not a comment or answer to your specific questions, but you do ask good ones in the context of what Moneyball was all about.

    I watched Moneyball for the second time on the flight back to US of A. Great Movie!! Just finished the book too. Even if you don't like baseball you can enjoy this one. Maybe even more so if you are not a rabid sports fan and don't have a pre-disposed bias on how you think the game's business model works.

    Every game, or endeavor in life, often comes down to the numbers! You need to find the meaningful stats that tell you something valuable, and separate them from those that really don't provide any insight to what is happening in the game.

    This is kind of like finding the real way to measure FBAR compliance success. That there were 33,000 OVDI participants that the IRS trumpets about, really tells you nothing meaningful other than it is one more than 22,999. The increase in the number of FBARs filed doesn't tell you much if you have no real estimate or "meaningfully arbitrary" guesstimate of how many should be filing.

    Commissioner Shulman could learn something from this book, before he starts spouting his OVDI success numbers again, if he would just bother to read. In the game, it was about searching for the meaningful stats that actually determine the runs that mattered, not just a player batting average that others focused on. Maybe he will have time to read and learn something after he leaves his job.

    I hope you get some real answer comebacks, because the questions you pose are ones that I wonder about too.

    ReplyDelete
  2. IRS may have plan to do something if they want foreign banks to turn over info on US persons with peak balance over 50K from 2002 to 2010 (according to Charles Rettig). This would certainly target go-forward otherwise why they want to collect data going back as far as to 2002 ?

    ReplyDelete
  3. It should be safe for those who have less than 50K peak value to go-forward. I am not sure over 75K. That is certainly a big catch for IRS as they want to impose 27.5% penalty even in OVDI.

    Also, I would ask how much work for an audit when IRS wants to impose FBAR ? I don't see much of the work needed. Once they have the bank record, they check never-FBARed -- would they just send a notice to taxpayers on FBAR civil penalty ? Just like a speeding camera catching a speeding vehicle ?

    The whole FBAR enforcement is relatively new (particularly outside OVDI/OVDP), we really don't know how IRS is going to do.

    ReplyDelete
  4. Speaking IRS' willingness to spend its limited resource on FBAR catching, I can only say for my own experience inside OVDI. I was asked to turn in my all bank records (over 400 pages and 6 lbs !) because I claimed my peak value around 70K. It took them three months to go through these docs. For what ? I guess it might be too close to 75K -- a big catch on penalty ! Of course, mine would be over 75K if RRSP is included. And they still try to get me to pay for penalty based on over 75K. I see the effort they have put into -- 3 months IRS agent (maybe he works for a few cases together), but it would at least take him 1 months of time.

    So if IRS is willing to go through folks (minnows like me) inside OVDI -- why won't they scan bank records from offshore banks to find out FBAR violators ?

    ReplyDelete
    Replies
    1. ij,
      did they ask for all these documents in one go or was it a piece meal request. My case has been assigned to an examiner and they asked for some docs which i have sent. I am interested in knowing
      if the request for documents come in drips or they request all these in one go.

      Delete
    2. "Anonymous May 13, 2012 8:58 AM"

      I was asked to turn in ALL financial docs to IRS, and I did right away. I paid over $200 to collect some old docs -- so the money was well spent in that regard.

      Delete
  5. Even processing the OVDI things takes significant resources, if they're handling expats. They have to pour through reams of paper full of grocery bills and payment of dog taxes etc looking for maximum balances.

    Processing a criminal case is likely much more difficult for the IRS, as there the subject is presumably less cooperative. Maybe we'll find out what "reasonable cause" really is....

    ReplyDelete
  6. Jack, when you say "Finally, keep in mind that the FBAR penalties the IRS asserts after this major audit enforcement initiative would then have to be followed by more civil litigation enforcement than either DOJ Tax or the Courts..."
    Are you refering to the fact that the IRS would recommend DOJ to file a suit to get those penalties?
    But the IRS itself cannot get the penalties until the suit has taken place?

    ReplyDelete
    Replies
    1. If the taxpayer pays, the IRS can get the money. But usually, the taxpayer would pay only if he or she agrees with the penalty. The alternative for the IRS will be to get DOJ Tax or a local AUSA (or an IRS attorney designated a special AUSA) to bring the suit. Before the IRS does that, it will strive mightily to reach an agreement with the taxpayer.

      The taxpayer will have some incentive to settle because a suit will be expensive for the taxpayer. But, I suspect that, in the management of its and, indirectly, the courts' resources, the IRS and DOJ Tax will only be under a lot of pressure to settle. That should be good for the taxpayers.

      Jack Townsend

      Delete
  7. I know this post is about the go forwards.
    But could we also say that the IRS is more likely to address the Quiet Disclosures first? We've seen that happen with the schiavo case. At least that's their message, and it seems that Quiet Disclosures are handed out to them (not that it would be difficult for them to create a list of first time filers).
    Both QDs and Go Forward could potentially be assessed similar FBAR penalties. Could practitioners relate audits they might have represented that involve foreign accounts and their outcome?

    ReplyDelete
  8. Form 8938 asks for details of when an account was opened. What prevents the IRS sending automatic penalty notices to folk who indicate accounts opened in prior years for which there is no FBAR?

    I'm not saying they will do this, just that they could. It would certainly be consistent with their current policy of shaking down as many people as they can, for largely undeserved penalties. Like us, the IRS too is in a numbers game. Even if less than 10% of automatic penalty recipients roll over and play dead that's still a very nice earner for them, and represents money they likely would not be able to extract using full FBAR penalties, either OVDI or other.

    ReplyDelete
  9. The form 8938 only asks whether the account was opened or closed during the taxable year. It is important in this regard, that neither the Form 8938 nor the FBAR asked when the account was opened. Of course, the IRS can rightly infer that failure to state that the account was opened in the year of the Form 8938 is a statement that it existed on 12/31 of the preceding year, but that is not as useful as if the IRS had asked the question of the year that the account opened. Some very targeted audits could be achieved with some limited additional questions on the Form 8938 and the FBAR, but the IRS / FinCEN has wisely chosen not to ask those questions.

    Moreover and this is something that I hope to address some is the potential interplay in using IRS return information, directly or indirectly, to start or further FBAR investigations (audits).

    Jack Townsend

    ReplyDelete
  10. Read in The International Herald Tribune today- "New tax rules hit citizens with weak ties to US". The article is mostly on accidental american. However, some interesting statistics: 33,000 disclosures (OVDI/OVDP. FBAR's forms filed in 2009: 276,386 and 2011: 618,314. Average of $133,000 was paid after voluntary disclosures as quoted by IRS. So, appreas that mostly minnows are being caught - and whales are absconding. So much for the success of these disclosure programs. And, 1780 people gave up US citizenship last year, 8 times compared to 2008.

    ReplyDelete
  11. Jack

    For someone who is opting out (or doing QD/go forward and gets audited) AND who has reasonably good facts and circumstances, can the huge jump in FBAR filings in 2011 be used in support of a claim of reasonable cause ? [ It seems clear that a lot of people were unaware of the FBAR filing requirements prior to 2011.]

    Also, the IRS mentions several times that "similarly situated taxpayers should be treated similarly", and I believe their manual also suggests that penalties should be applied (or not applied) consistently. If VD opt outs were treated more harshly than say QDs with similar facts (who are similarly situated except that they didn't join the program) , that would seem to violate their own guidance ?

    To be clear, I am NOT suggesting that QDs should be treated harshly, I am just saying that opt outs should be treated the same as QDs for the most part, and it does not seem that the IRS has instituted any sort of visible jihad against QDs -- for now at least.

    ReplyDelete
  12. I don't know where it is leading us to. All this is becoming such a scary mess that I get second thoughts of not doing anything even now. Past years i din't know and was a honest ignorant error. Amnesty is ridiculously named amnesty. I know many folks who chose to stay silent this year too. And since my amount is over the 75K threshold, I'm getting inclined towards being silent as well even though I don't like that route. Fear of getting caught due to first time FBAR is making me loose my sleep. Why IRS is not giving some clear guidelines, what does it gain by taking curses from everyone? I hope this blog enlightens us on going forward and gives me confidence on the go forward route. I guess I've another month to finalize :(

    ReplyDelete
    Replies
    1. Have you declared your account on your 1040 B and mentioned it was over $10K?
      If so, then why would you not file your FBAR?

      Delete
  13. In my view, QD and FD is like take a chance to see if IRS will pick you up or not. This is unknown to all of us.

    In case for being picked out, I do think OVDI participants will have a stronger position to argue for less FBAR penalty (when opting-out). Not that I am in the program, this is just a common sense. We raise white flag -- telling all our story to IRS -- so they save a lot time to dig us out.

    So the question is really -- would IRS bother to scan taxpayers' past sin when the offshore bank records come in -- if so, what is the threshold level ?

    I am sure -- nobody knows -- until we see stories comes out.

    ReplyDelete
  14. I hope practitioners will provide that information at some point, when the data becomes available, to be able to give us better guidance.
    The problem with FBAR deliquency is that regardless of the cost of audit for them, because of the high FBAR penalties, the IRS could potentially recoup that cost.
    It seems that if they wanted to, they could still go after pretty much anyone, even with the smallest accounts, and still end up making money with penalties.

    ReplyDelete
  15. ij

    I don't understand. I thought you were in the program.

    ReplyDelete
    Replies
    1. ”AnonymousMay 14, 2012 6:35 PM“,

      Yes,I am still in the program. After reading IRS asking for 50K over offshore from 2002 to 2010, I feel good about being in the program -- and in a stronger position to fight for my RRSP. I don't think everyone with offshore non-compliance should be in OVDI, just follow your heart

      Delete
    2. ij, what is the $50K youre talking about? the inlieu of penalty they asked from you?

      Delete
    3. "Anonymous May 15, 2012 7:32 AM"

      Read this article about $50K

      http://www.forbes.com/sites/irswatch/2012/01/10/deja-vu-yet-another-irs-fbar-voluntary-disclosure-initiative-2/

      Delete
  16. Jack

    The IRS seems to take the position that the FBAR law (31 USC 5314 and 5321) allows it to assess a per year per account penalty. I have read the statute and I don't quite see that it supports the IRS position. It seems to me that the alternative interpretation of 10K/report (i.e. per FBAR form) is a more reasonable interpretation.

    I doubt the matter has ever been litigated, but if it were, would the IRS's interpretation stand up in court ? I gather that under the SC's Chevron ruling, courts are supposed to defer to federal agency rulings. On the other hand, could a court consider that applying multiple penalties to small accounts would lead to absurd results and indicate that the IRS's interpretation of the statute is incorrect ?

    I doubt the IRS would try to apply these penalties except in cases with multiple large accounts where it really suspects willfulness, but feels unable to prove it (and in that case, the taxpayer in question may well consider that he/she got off easily with just the non-willful penalty).

    [ In the Williams case, I think the Government asked for a 100K penalty/account, but that was for only one year and the accounts were large, so the result was not absurd]

    ReplyDelete
    Replies
    1. 1. I have not researched the question in depth, but tend to agree that the FBAR nonwillful maximum penalty should be $10,000 per form rather than per account per year.

      2. I am not sure that this IRS position is entitled to Chevron deference. At best Skidmore deference, which is a lesser form of deference and may mean that it is persuasive only if it is persuasive (which is a weak or nonexistent form of deference).

      3. I think that in interpreting the nonwillful penalty, a court could consider that the IRS's interpretation could be more draconian than the willful. Indeed, the application of the penalty in a draconian fashion could implicate the excessive fines constitutional prohibition.

      4. I agree that the IRS will not have the incentive to apply the nonwillful penalty in a draconian manner except in the most extreme of cases. By analogy, as you note, in Williams and the multitude of criminal cases, the IRS does not seek the max.

      Thanks for your very good comments.

      Jack Townsend

      Delete
  17. Jack

    Thanks very much, and a followup question. Would it be correct to say that the Chevron (higher) standard of deference to administrative agency rulings is more likely to be applicable on matters that involve the agency's particular deep subject matter expertise: as an example, matters involving the IRS and complex tax issues, or matters involving the SEC and complex securities issues ? If that were so, then the FBAR per account penalty would be on weaker grounds still, since it doesn't seem to involve any special agency expertise, but just reading the statute and inferring the intent of Congress.

    On the other hand, if the level of deference accorded by courts depends more on  how the statute is framed, how much leeway Congress gave the agency involved, how the agency itself justifies its conclusion, then that is another matter.

    ReplyDelete
  18. I don't think that the courts grade Chevron deference based on the perception of the expertise of particular agencies.  At least it is not in the articulated Chevron standard.  Now, what is possible is that a court, without articulating notions of its imagination of the expertise of the agency,  may use that in its application of Chevron deference in a case at hand.  But I don't think any court would articulate that as a relevant consideration and then set about to determine the relative expertise of an agency in deciding the case.

    Jack Townsend

    ReplyDelete
  19. I am interested in cheap oakley sunglasses very much, so I concern on clearance oakley sunglasses, well, ray ban wayfarer wholesale also sounds good.

    ReplyDelete
  20. Jack,

    You say


    "Finally, keep in mind that the FBAR penalties the IRS asserts after this
    major audit enforcement initiative would then have to be followed by
    more civil litigation enforcement than either DOJ Tax or the Courts
    likely have otherwise uncommitted resources to handle.
    "


    I gather from some previous comments on the blog that there *may* be other methods the IRS could collect, using other debt collection tools.

    The statute only mentions the method of bringing a suit, but doesn't say that is the only method. Does the fact that this method is specifically mentioned imply that other methods are excluded ? After all, the method of bringing a suit is always available to the government for any penalty, so I might assume that when Congress specifically lists this method, it wants to emphasize that this is the ONLY method available for collection.

    Also, there seems to be no provision in the statute for any administrative appeal, a hearing before an administrative judge etc. before the penalty is considered entered. Does this also imply that Congress did indeed intend the lawsuit in federal court as a necessary prelude to collection (absent a settlement, of course) ?

    ReplyDelete
  21. Came across this "In the case of violations involving a “transaction,” the maximum penalty was $25,000 or the amount of the transaction (not to exceed $100,000), whichever was greater."
    on pg. 11. here,

    http://www.hbtlj.org/v07p1/v07p1_sheppard.pdf

    In case of the above, what exactly do they mean by "transaction"? Does it mean the act itself of sending money to the account in the native country? 

    ReplyDelete
  22. Only if the transaction were the reportable event. FBAR reporting is not transactional reporting, but account and high balance reporting.  Hence another part of the BSA applies.

    Jack Townsend

    ReplyDelete
  23.  Also, the penalties referred to are for the old FBAR rule. The new rule is 100K/50% of the balance.

    Although I think there is an extremely good argument that at least for the non-willful penalty, the 'report' referred to in the statute is the entire FBAR form, not on a per account basis. Indeed, you are only required to file one form per year, not n reports, one per account.


    Otherwise you end up with lots of absurdities. A good example is that if you have > 25 (say 200) accounts, you are only required to file an FBAR form, but not report all accounts. So if you do not file an FBAR form, the possible penalty could only be 10K, whereas if you had 5 accounts, your penalty could be 50K.

    ReplyDelete
  24. Is a voluntary disclosure(not the 2012 OVDI) different from a QD?  I heard that some CPAs/attorneys send in the voluntary disclosure packages to the IRS, notifying the IRS openly of the disclosures instead of the quiet disclosure.


    Is this not liable to make the IRS come guns blazing at the taxpayer, instead of the QD? Or would it be somehow better than a QD in that the IRS would consider the fact that the minnow has come in on their own and still show some discretion in this type of VD? What about FBAR penalties? Could they not end up being more excessive than the OVDI?

    ReplyDelete
  25.  Can the QD be QAR (qualified amended returns)? I don't know how one does that either!

    ReplyDelete
  26. The QD should qualify as a QAR, provided that the other requirements for QD are met (most particularly that civil fraud is not involved).

    Jack Townsend

    ReplyDelete
  27. By the way, this is a bit of an anomaly.  The amended returns submitted in the OVDI process probably will not qualify as QARs, although I think practitioners should try to shoehorn them in as QARs.  I would appreciate hearing from readers on that issue.

    Jack Townsend

    ReplyDelete
  28.  Jack

    So on opt out, a taxpayer could claim that the amended returns should count as qualified amended returns and hence should not be liable for the accuracy related penalty (and hence do not have to show reasonable cause for waiver) ?


    I see that  Treasury regulations say  that the following would not be a QAR.


    The date on which the Commissioner announces by revenue ruling, revenue
    procedure, notice, or announcement, to be published in the Internal
    Revenue Bulletin (see 601.601(d)(2)), a settlement initiative to
    compromise or waive penalties with respect to a listed transaction


    This is not exactly a listed transaction, but the settlement initiative would seem to mean that once the VD program was announced, the QAR could not be claimed to reduce penalties ? The regulations refer mostly to tax shelters, so one has to shoehorn them to make them apply to offshore account cases.

    It also seems to me that when amended returns are submitted as part of a 'contract' (the offshore VD contract), they would not
    count as QARS ?

     I would very much appreciate hearing your thoughts on the matter.

    ReplyDelete
  29. I was told that normally the QD's are sent in at seperate times and if IRS finds them, they consider it an admission of guilt, but the  Voluntary disclosure - where they send in the amended Returns and delinquint FBARs along with a letter, almost like the OVDI  pacakge except for being in the program - are the QARs.


    My question is, if one does full disclosure of income in QD and there are no bad facts (am not sure if the foreign accounts in native land count as bad facts) and pays all the back taxes, interest, accuracy penalty and any other tax related penalty - would these QD's still be considered as QARs?

    ReplyDelete
  30. First, I am not sure that "normally" QDs are sent in at separate times.  I know some practitioners do that on the notion that the IRS is less likely to put the various filings together for purposes of audit and/or criminal investigation.  If that is the reason for separate filings at separate times, I think there is at least a theoretical risk that the IRS could perceive that as an attempt to impair or impede the functioning of the IRS. This is a bigger issue than I can get into here, but just be wary and make sure that, if there is separate filings, there is some credible independent reason to do separate filings.

    QDs are not an admission of guilt, but certain as to the matters reported on the QD, they are admissions if the IRS ever needs to treat them as admissions -- either civilly or criminally.

    Finally QDs are accompanied, where possible, only by payment of tax and interest.  So long as it looks like a qualifying QAR (generally true for amended returns), the IRS will not assess the accuracy related penalty, but could, if it chose, investigate whether fraud is involved and it can assert the civil fraud penalty (75%).

    Jack Townsend

    ReplyDelete
  31. Jack

    Why do you say that amended returns submitted in the OVDI will likely not be considered QARs  (on opt out, one presumes, since otherwise it does not matter) ? Is it because the person submitted them only after sending an initial disclosure letter to the IRS and hence at the time the amended returns were sent in, it could be said the IRS 'knew' about the returns ?

    ReplyDelete
  32. That was just my hunch that the IRS will not want them to qualify.  But since there is no authority, I think practitioners should treat it as an open issue and make the argument that QARs are all amended returns except those disqualified (and these do not appear to be among those that are disqualified).

    Jack Townsend

    ReplyDelete
  33.  Mr Townsend

    This is usual information. Thank you very much. Even if the IRS does not accept that OVDI returns are QARs, it is at least a case where a good argument could be made.  That is the good thing about having left the OVDI (as I have): you don't have to put up with arbitrary IRS rules that have no backing in regulations and statutes.

    These will serve as useful negotiating positions on opt out: you give a little on such issues, the IRS gives a little on the FBAR penalty (technically, the FBAR penalties are supposed to be distinct from tax penalties, but ultimately, I think the final $$ sum is what the IRS will look at).

    ReplyDelete
  34. PleaserepealfbarMay 24, 2012 at 2:54 PM

    One of the questions on the naturalization form is - have you committed a crime for which you have not been arrested?

    Does entering the OVDI mean admission of crime even though no criminal proceedings are brought about and should the yes box be checked for the question

    Also is FBAR filing requirement applicable to H1B visa holders (non-immigrant visa holders who do not have permanent residence or green card), who file as resident aliens for tax purposes?

    The regulation 4.26.16.3.1.1  (07-01-2008) says that - A "resident" of the United States is a permanent resident. "Permanent resident" is not defined in the FBAR instructions, regulations, or statute. The definition of "resident alien" found in IRC § 7701(b) is not applicable for FBAR purposes, (I.E. resident for FBAR DOES NOT equal resident alien for tax purposes). The plain meaning of the term " resident" (in this context, someone who is living in the U.S. and not planning to permanently leave the U.S.) should be used for FBAR examination purposes.
    HOWEVER, the current FBAR form defines a resident as a resident alien.Does this mean a non-immigrant can file amended tax returns without going in for OVDI since the fbar penalty is not applicable?

    ReplyDelete
  35. I will only respond to the first because I am out of time for a while to try to answer all or even many of the comments.

    Is the entrance into OVDI and even staying in the OVDI penalty regime an admission of guilt of a crime for any purposes, including naturalization.  The answer is no.  The IRS does not ask for a complete mea culpa statement admitting guilt of a crime (although some of the statements required are close).  But much more would have to be shown even if the files were available for immigration purposes and likely they would not be.  So, no admission of guilt of a crime and certainly no finding of guilt of a crime in the process.

    Jack Townsend

    ReplyDelete
  36. Jack,

    I have the same question as Pleaserepealfbar.  If you could just notate a yes or no on whether fbar rules apply to non-immigrants, it would be great since i have so many collegues that are in the same boat and considering leaving America vs. paying a 1/3 of their life for a small amount of taxes.  I understand you are stapped for time, but if you can respond it would be appreciated  by a ton of non-immigrants that are anxious.

    ReplyDelete
  37. PleaserepealfbarMay 24, 2012 at 4:44 PM

    Thanks Jack

    ReplyDelete
  38. Could you be more precise what you mean by non-immigrants?  I am a non-immigrant -- born here and lived here all my life.  The question is easily answered as to me.  I don't think that is what you have in mind.  Are you talking about resident aliens who are not immigrants?  Just be more precise so that I can answer yes or no and feel like I have given a useful answer.

    Jack Townsend

    ReplyDelete
  39. "
     I am a non-immigrant -- born here and lived here all my life. "
    LOL.

    ReplyDelete
  40. The FBAR requirements do apply to a non-immigrant as you define it -- a U.S. citizen by birth and longtime U.S. resident.

    Jack Townsend

    ReplyDelete
  41. What i meant was whether the fbar reporting requirements apply to people on non-immigrant visas such as H1 and L1 who are US residents for tax purposes. As noted by pleaserepealfbar, regulation 4.26.16.3.1.1 seems to suggest that fbar reporting applies only to permanent residents and citizens and thereby by implication it DOES NOT apply to non-immigrant visa holders who are US residents for tax purposes.  However, fbar instructions seems to suggest that fbar reporting applies to ALL US rtax residents including H1 and L1 visa holders. So, the question facing most H1 and L1 visa holders is whether they are required to comply with FBAR reporting though the regulation states applicability only to permanent residents and US citizens whereas fbar instructions state that it appluies to ALL US tax residents.

    ReplyDelete
  42. Jack,

    Excellent question by Anonymous and pleaserepealfbar below. Does the fbar reporting requirements apply to non-immigrant visa holders who are US residents for tax purposes. I looked up the citation 4.26.16.3.1.1 and it suggests that fbar reporting applies only to GC and USC, but not other US tax residents, whereas the TDF 90-22.1 suggests that ALL US tax residents have to report FBAR.  

    ReplyDelete
  43. Follow the FBAR form instructions.  My understanding is that all U.S. residents file the FBAR.  Same is true for answering the question on Schedule B of the Form 1040 (individual income tax return).

    Jack Townsend

    ReplyDelete
  44. A lot of places you mention assessment of whether the tax payer is a candidate for criminal prosection as IRS only prosecutes material misconduct. can you help define "material" in terms of dollar income or tax threshold or in terms of foreign account balance threshold

    ReplyDelete
  45. I can define materials. That is a judgment call made by an experienced professional after developing all the facts and circumstances in close communication with the taxpayer and with such other due diligence as is required by those facts and circumstances.

    Jack Townsend

    ReplyDelete
  46. The reference to Michael Lewis's Moneyball, makes me want to draw your attention to his recent Princeton Graduation address.  If you have not seen this, I really recommend it, and it is not that long...  I posted it here.
    http://isaacbrocksociety.ca/2012/06/09/michael-lewis-the-extra-cookie/ Also last night on PBS, there was a good interview with Michael about his address...http://www.pbs.org/newshour/bb/entertainment/jan-june12/michaellewis_06-13.html In my opinion, they are both worth your time.  

    ReplyDelete

Please make sure that your comment is relevant to the blog entry. For those regular commenters on the blog who otherwise do not want to identify by name, readers would find it helpful if you would choose a unique anonymous indentifier other than just Anonymous. This will help readers identify other comments from a trusted source, so to speak.