Dear President Trump, Please Repeal FATCA

After posting Dear President Trump: Why I’m Leaving America, I received many responses, and some similar appeals. Some have focused on one particular law, FATCA, the Foreign Account Tax Compliance Act. Many people are surprised to learn that it was passed by Congress way back in 2010. However, its heart and soul comes from a vast array of agreements between America and foreign countries that implement this global financial disclosure law. It is a uniquely American law, yet FATCA now spans the globe with a network of reporting that is unparalleled in the world.

FATCA requires foreign banks and governments to hand over secret bank data about American depositors. Non-compliant institutions are frozen out of U.S. markets, so there is little choice but to comply. Under FATCA, non-U.S. banks worldwide want to know if all American customers are compliant with the IRS. The IRS announcement that its collections from offshore account issues have topped $10 billion is due in part to FATCA. Recently, one foreign leader asked President Trump if he would get rid of it. And one American–rather a former American–wrote this:

Taxing Passports

Dear President Trump: 

I realize that not paying taxes “makes (you) smart.” So you likely think I’m dumb for paying taxes to Canada, where I live. I think it makes me responsible. You probably would consider me “a nasty woman.” You might even call me a traitor because I have lived outside the United States for almost half a century, and relinquished American citizenship by becoming a citizen of the country I love—Canada—in 1973.

But hear me out on a real “total disaster.” The United States demands that I file tax returns to a country where I haven’t lived for 47 years just because I was born there. Even worse, the U.S. Treasury Department demands invasive information about all of my Canadian accounts. You see, Democrats, with support of some Republicans, passed the Foreign Account Tax Compliance Act (FATCA) back in 2010. It is nasty, believe me.

I know you’re a really, really smart guy because of that not paying taxes thing. So let’s talk about FATCA, which is complex, believe me. Imagine if all of Melania’s accounts—including personal, business and even joint accounts with you—had to be reported to Slovenia just because she was born there! Or, if all of your accounts were required to be reported to Scotland because your mother hailed from there. Or, if the Czech Republic demanded all of the financial records of your three oldest children because of their mother’s birthplace. You get the idea.

This may sound like fake news, but is quite real for Americans abroad, including anyone born in U.S. These Americans are under attack, but not from terrorists. This FATCA attack comes from U.S. government! Terrible. You want to strip U.S. citizenship from anyone who burns an American flag? Ironically, if it was that easy to ditch U.S. citizenship, I’m afraid there would be Stars and Stripes ablaze around the globe. In fact, renouncing is costly, complicated and sometimes devastating.

Yet, renunciations of U.S. citizenship soared under President Obama’s administration. These people didn’t renounce because they are traitors or tax cheats. Many are patriotic Americans who built lives and paid taxes from Australia to Zimbabwe. But, IRS wants to claim them and seize their financial records because of their birthplace. Others are Accidental Americans because parents were temporarily living in the U.S. when they were born (like London’s Boris Johnson), or because a U.S. hospital was the closest one for their birth (like a Canadian police officer). I know of one Canadian caught in the FATCA nightmare whose mother went into premature labor over 50 years ago on an overnight trip to Buffalo!

Many financial institutions Build the Wall by refusing accounts to anyone born in America. Sadly, there are so many people now wanting to shed American citizenship that some U.S. Consulates have waiting lists of a year. Some are no longer responding to requests. Armed with alternative facts, sanctions and penalties, the U.S. Treasury and IRS have forced financial institutions and governments around the globe to comply with FATCA through bully-boy tactics. Your Russian Putin pal signed on, and so did China, Iraq and Mexico. But not Iran, Syria or Eritrea.

It’s strange about Eritrea, because it is the only other nation on the planet that taxes its citizens living outside its borders. But this tiny African dictatorship at least makes it easier than America does. Eritrea requests expat citizens pay 2% of their income using one simple form. No demand for financial records. No imposition of unwanted citizenship on everyone born there. In contrast, some tax compliance thugs threaten Americans outside the U.S. that the IRS will “Lock them up” if these mainly middle class folks don’t file tax returns. Notably, you haven’t released your tax returns, so I have no idea if you have offshore accounts or if you reported them.

You can straighten this out with  an Executive Order for U.S. Treasury to stop tormenting  millions of  honest law-abiding folks who just want to live their lives in peace and protect their families and their privacy. You can urge Republicans in Congress to repeal FATCA and move to resident taxation as part of tax reform. Please ask your Chief of Staff to help. Mr. Priebus said FATCA is unconstitutional. The Republican National Committee even passed a resolution vowing to repeal FATCA and adopt residence based taxation. So dump FATCA, a “failing piece of garbage.” Please do it now. Make America Great Again, for all Americans.

Sincerely,

Lynne Swanson, a concerned former U.S. citizen”

For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not legal advice.

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IRS Professional Responsibility Lawyer Charged In Drug Distribution Conspiracy

As tax filing season gets underway, the IRS and Justice Department normally roll out enforcement examples of tax cheats who are caught and brought to justice. These accounts probably have some deterrent effect, particularly for taxpayers who are huddled over their tax returns. Let’s see, should you claim that iffy deduction? But this isn’t the usually timed story. Jack Vitayanon, an attorney adviser in the IRS’s Office of Professional Responsibility and an adjunct professor at Georgetown Law School, has been arrested and charged with conspiring with others to distribute at least 500 grams of methamphetamine.

As detailed in the complaint, Mr. Vitayanon conspired with others in Arizona and on Long Island to distribute meth for several years. Vitayanon recently negotiated with undercover special agents and shipped 460 grams of meth from his apartment in Washington D.C. to Long Island via Federal Express. The recipient of the package, acting at the direction of law enforcement, recorded an online video chat with Vitayanon on December 15, 2016 and during the recorded conversation Vitayanon was observed in his residence smoking what appeared to be meth from a glass pipe, according to the complaint.

(AP Photo/J. David Ake, File)

A search of the defendant’s Washington D.C. apartment executed pursuant to a court-authorized search warrant led to the seizure of additional quantities of suspected methamphetamine, drug paraphernalia, packaging materials and drug ledgers. “As alleged, the defendant – a federal attorney working for the IRS’s Office of Professional Responsibility – broke bad and supplemented his income by selling distribution quantities of methamphetamine,” stated United States Attorney Capers. “The defendant will now be held to account for his alleged criminal conduct.” 

The IRS said it could not comment on “specific personnel matters.” But the agency said it held its employees to “high standards and does not tolerate inappropriate behavior.” If there were questions about an employee’s conduct, the agency said it would work with law enforcement. Notably, of course, the charges in the complaint are merely allegations. Like all criminal defendants, this defendant is presumed innocent unless and until he is proven guilty. The government’s case is being prosecuted by the Office’s Long Island Criminal Section. Assistant United States Attorney Charles N. Rose is in charge of the prosecution.

Regardless of whether this defendant is ultimately convicted, it is worth remembering–especially at this time of year–that tax crimes too can be quite serious. Indeed, Al Capone was convicted not of murder, graft or racketeering, but of income tax evasion. No matter how you make your living, the tax laws apply. Deductions can be a problem. We generally pay tax on net income, not gross income. But for criminals, claiming expenses can be a problem. If you report your illegal income–which may be admitting to a crime–tax deductions can be limited.

Illegal payments generally aren’t deductible. And as the medical marijuana industry is learning, Section 280E of the tax code denies even plain vanilla tax deductions for those dealing in controlled substances. In the past, the leading trade publication for the marijuana industry reports that some in the industry are being pushed underground. Whatever your business, be careful out there.

For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not legal advice.

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Hey, My IRS Form 1099 Is Wrong … Maybe Intentionally

Did you receive any IRS Forms 1099 that you think are wrong? Maybe someone actually paid you $1,000, but reported that they paid you $10,000? The 1099 rules are complex and voluminous, and mistakes happen. But how should you handle it? And what if you think someone intentionally misreported? There’s no easy answer. Some reporting rules (for example, to lawyers and their clients) call for duplicate reporting that can make it seem as if $1,000 was really $2,000.

But more generally, incorrect Forms 1099 are not uncommon. At a minimum, one can read the 1099 regulations broadly, erring on the side of reporting. When in doubt, issue a Form 1099, many say. A few observers may even think of issuing IRS Forms 1099 in a kind of punitive way, to turn the tax tables on someone. If you receive a Form 1099 you think is wrong, you can ask the payor to correct it. They can destroy the incorrect one if they have not already sent it to the IRS. If it’s too late, they can issue a corrected form.

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Issuers face penalties for errors, but most of those penalties apply to failures to issue the forms. There are a few examples of private lawsuits over tax reporting forms. But the IRS won’t get involved, and most such suits fail. So stick to trying to get your situation corrected, or explained to the IRS on your return. Issuing Forms 1099 is something businesses do to verify that payments were made, and to help support tax deductions. Of course, by issuing a Form 1099, you are generally also sticking the recipient with paying taxes on the item. In that sense, some IRS Forms 1099 may conceivably be issued with a kind of punitive intent.

Last year, boxer Floyd Mayweather Jr. sent an IRS Form 1099 to a strip club to report that he dropped $20,000. Mayweather Promotions LLC sent the form to the Hustler Club for $20,000, mostly cash tips for dancers. The club claimed it didn’t see the money paid to the ‘independent contractors.’ Still, the club must report it. Forms 1099 are critical to tax returns, and you are almost guaranteed an audit or tax notice if you fail to report one. Each Form 1099 is matched to your Social Security number, so the IRS can easily spew out a tax bill if you fail to report one. It matters a lot, especially now that the IRS has six years to audit, not three.

Forms 1099 are supposed to be mailed to the taxpayer by January 31st, though some companies issue the forms throughout the year when they issue checks. Although the initial deadline is January 31, issuers of the forms have traditionally not been required to file copies of all Forms 1099 with the IRS until the end of February. That one month delay was helpful, allowing a window of time to address errors. So contact the issuer if you receive one you believe is in error.

However, there is an important change in 2017 (covering 2016 Forms 1099-MISC). For those forms reporting non-employee compensation in box 7 of 1099-MISC, January 31, 2017 was the due date for sending forms to the taxpayer and to the IRS. For that category, there is no one month reporting delay. Forms 1099 are controlled by your Social Security number, so even if an issuer has your old address, the information will be reported to the IRS (and your state tax authority).

Forms 1099 remind you that you earned interest, received a consulting fee, or were paid some other kind of income. There are many varieties, including 1099-INT for interest, 1099-DIV for dividends, 1099-G for tax refunds, 1099-R for pensions and 1099-MISC for miscellaneous income. These forms are sent by payors to you and the IRS. If you don’t include the reported item on your tax return, the IRS issues a notice.

In fact, apart from wages, whatever you were paid, is likely to be reported on a Form 1099. Companies big and small churn them out. If you’re in business–even as a sole proprietor–you also may need to issue them. The most common is Form 1099-MISC, which can cover just about any kind of income. Consulting income, or non-employee compensation is a big category.

If you don’t receive a Form 1099, you may not want to ask for it. If you don’t receive a Form 1099 you expect, just report the income. Reporting extra income that doesn’t match a Form 1099 is not a problem. The IRS does not consider that a mismatch. Only the reverse is a problem.

If you call or write the payor asking for a Form 1099, the payor may issue it incorrectly. Alternatively, you may end up with two, one issued in the ordinary course (even if you never received it), and one issued because you asked for it. The IRS computer may think you had twice the income you really did.

For example, if you settled a lawsuit, don’t ask for a Form 1099. Just report it, if it is income. Generally, everything is income, including money for settling a lawsuit. One of the few exceptions is lawsuit recoveries for physical injuries. Damages for physical injuries are tax-free under Section 104 of the tax code. Yet only physical injuries and physical sickness qualify, one of 10 things to know about taxes on legal settlements.

For alerts to tax articles, email me at Wood@WoodLLP.com. This article is not legal advice.

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IRS Form 1099 Or Form W-2?

Some people ask ‘1099 or W-2?’ as if they were asking how you take your coffee. With all the tax forms coming these days, it’s good to remember the difference. Form W-2 is for employees, and includes details about tax withholding, remittance to the IRS and state taxing authorities. In contrast, Form 1099 reports payments to independent contractors. Any Form W-2 or 1099 you receive also goes to the IRS. IRS uses Forms 1099 for easy computer matching of Form 1099 data against tax returns. But how do you know which form? We’ll come back to that question.

The deadline is Jan. 31 for mailing Forms 1099 to taxpayers, but the payer generally has until the end of February to send all its Forms 1099 to the IRS. This year (2017, for 2016 payments), the IRS moved up the filing date for Forms 1099-MISC reporting non-employee compensation in box 7. The reporting date to the IRS for those forms is January 31, the same as the due date for forms to be issued to recipients. If there is an error on a Form 1099 tell the payer immediately.

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There may be time to correct it before sending it to the IRS. If the payer has already dispatched the incorrect form to the IRS, ask the payer to send in a corrected form. But there’s hardly anything more fundamental than the difference between employee and independent contractor. Some workers sue their ’employers’ over this, claiming they were misclassified and are really employees, no matter what they might be called. Sometimes, the IRS and other agencies go after companies too for the same thing.

You probably can’t do much at tax time on such big questions. However, you can check out IRS tax form Form 8919. You can also check out what the IRS says about uncollected Social Security and medicare tax. Employers should know if they are hiring independent contractors or employees. IRS says you might need Form 8919 if you thought you were getting a W-2. The IRS might even have already determined (via Form SS-8) that you are an employee. If you’re an employee, taxes have to be taken out. That means you’ll receive an IRS Form W-2.

In contrast, if you’re an independent contractor, you’ll get full pay with no deductions. Of course, you are liable for your own taxes. But what if you’re the employer not the recipient? This is one of the more momentous decisions in business. It goes beyond taxes, covering workers’ compensation, unemployment insurance, state and federal wage and hour laws, pension laws, nondiscrimination laws and more. It also impacts employer liability, since employees are agents of the company.

It’s hard to think of a more pivotal issue. Yet this decision is made thousands of times a day all over America. If you’re the worker, you may be tempted to say “1099,” figuring you’ll get a bigger check that way. You may in the short run, but you’ll actually owe higher taxes. As an independent contractor, you not only owe income tax, but self-employment tax too. In contrast, if you’re an employee, you pay only one-half the Social Security tax.

Apart from tax law, employee status carries a host of nondiscrimination laws, pension and benefits laws and wage and hour protections. They all apply to employees but not to independent contractors. For all of these reasons, employers have big incentives to use independent contractors. Many start ups and tech companies rely on the branding that uniformity can provide, but don’t want all of the costs and liabilities of employees.

The answer in many cases is independent contractors. Done carefully, such arrangements can work fine and be legitimate. However, some employers push the envelope to treat workers as independent contractors who are clearly employees if anyone bothers to look. That’s where the IRS and many other agencies come in. Government entities and private parties in lawsuits have reason to probe. There are several prevailing legal standards, but many of them boil down to how much control company has over worker. Yet the area is nuanced, and some control won’t convert independent contractors to employees. The area is heating up, with many believing that inappropriate worker status determinations are a major tax loophole. If you’re an employer, be careful.

For alerts to future tax articles, email at Wood@WoodLLP.com. This discussion is not legal advice.

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Missing An IRS Form 1099? Why Not To Request It

Deep into IRS Form 1099 season, many people are watching their mailbox for those tell-tale tax forms. Each Form 1099 is important, matched to your Social Security number. That way the IRS can spew out a tax bill if you fail to report one. But should you ask for one that doesn’t arrive? We’ll come back to that question. There is more angst this year than usual, since the IRS has changed the filing date for some Forms 1099.

This year, the IRS moved up the filing date–for IRS copies going to the IRS–to January 31, for Forms 1099-MISC reporting non-employee compensation in box 7. January 31 is the normal due date for the forms to be issued to recipients. But in the past, companies issuing the form had an extra month or two thereafter to send the forms to the IRS. This year, there will be many forms sent to taxpayers and the IRS simultaneously. That means less time to catch and correct errors.

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Note, though, that the old delayed filing dates remain unchanged for Forms 1099-MISC that do not report in box 7. In general, IRS Forms 1099 remind you that you earned interest, received a consulting fee, or were paid some other kind of income. There are many varieties, including 1099-INT for interest, 1099-DIV for dividends, 1099-G for tax refunds, 1099-R for pensions, and 1099-MISC for miscellaneous income. Sometimes, you even receive a Form 1099 that reports more than you received.

There are different types of Forms 1099, and some of them you might need. But what about the common Form 1099-MISC? The most common is Form 1099-MISC, which can cover just about any kind of income. Consulting income, or non-employee compensation is a big category for 1099-MISC. In fact, apart from wages, whatever you were paid in 2016, is likely to be reported on a Form 1099. 

Surprisingly, many people can’t wait for them to arrive. yet in my view, asking for one can be a mistake. If you find yourself wanting a form, you obviously know about the payment you received. Just report the income. You don’t need the form. The IRS does not consider it a mismatch if you report extra income that doesn’t match a Form 1099. Only the reverse is a problem.

And in my experience, asking can backfire. If you call or write the payer asking for a Form 1099, the payer may issue it incorrectly. Alternatively, you may end up with two, the first one that you didn’t receive, and the second issued because you asked for it. The IRS may get both, and the IRS computer may think you had twice the income you did. It happens.

Although asking can be a mistake, you do want to receive the forms if they are issued. So make sure payers have your correct address so you get a copy. Update your address directly with payers, and put in a forwarding order at the U.S. Post Office. You’ll want to see any forms the IRS sees. Of course, even if an issuer has your old address, the information will be reported to the IRS (and your state tax authority) based on your Social Security number.

It’s also a good idea to file an IRS change of address Form 8822. The IRS explains how to notify IRS. Keeping track of each Form 1099 you receive is important, but asking for the forms can sometimes mean you’ll end up with forms you might not need or that duplicate income. One settling for this common mistake is a Form 1099 for your lawsuit recovery. Generally, everything is income, including money for settling a lawsuit. One of the few exceptions is lawsuit recoveries for physical injuries. Forms 1099 can make your tax position more complex. That’s just one of 10 things to know about taxes on legal settlements.

What’s an exception to my suggestion not to ask about Forms 1099? The IRS suggests that if you don’t receive a Form 1099-R, you should ask. In other contexts, consider it carefully. Forms 1099 are important. In fact, you are almost guaranteed an audit or tax notice if you fail to report a Form 1099. Mistakes matter, especially now that the IRS has six years to audit, not three.

For alerts to tax articles, email me at Wood@WoodLLP.com. This article is not legal advice.

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10 Things To Know About IRS Forms 1099 At Tax Time

It’s that time of year again, when IRS Forms 1099 arrive. Perhaps no one likes IRS Forms 1099 except the IRS. The agency loves them, because they allow for the easy computer matching of Form 1099 data against tax returns. Businesses may not like sending the forms out, but there are penalties for failing to issue them. Besides, no one wants trouble from the IRS. So as all the forms descend this time of year, here are 10 things to know about Forms 1099.

1. Better to give than to receive. Generally, businesses must issue the forms to any payee (other than a corporation) who receives $600 or more during the year. That’s just the basic threshold rule, but there are many exceptions. That’s why you probably get a Form 1099 for every bank account you have, even if you earned only $10 of interest income.

2. Report every 1099. The key to Forms 1099 is IRS’s matching. Every Form 1099 includes the payer’s employer identification number and the payee’s Social Security number. The IRS matches Forms 1099 with the payee’s tax return. If you disagree with the information on the form but can’t convince the payer you’re right, explain it on your tax return. If you receive a Form 1099, you can’t just ignore it, because the IRS won’t.

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3. There are many varieties. There’s a 1099-INT for interest; 1099-DIV for dividends; 1099-G for state and local tax refunds and unemployment benefits; 1099-R for pensions and payouts from your individual retirement accounts; 1099-B for broker transactions and barter exchanges; 1099-S for real estate transactions, etc. There are many categories, but the Form 1099-MISC (for miscellaneous) seems to prompt the most questions and covers the biggest territory.

4. Timing is everything. Businesses must send out Forms 1099 by Jan. 31 for the prior calendar year. However, don’t assume you’re off the hook for reporting income if you don’t receive a Form 1099 by February or even March. There are penalties on companies that issue Forms 1099 late, but some come as late as April or May when you may have already filed your return. Even if you never receive a Form 1099, if you receive income, you must report it. You don’t need a 1099 to report income.

5. Beware changed addresses. The information will be reported to the IRS based on your Social Security number regardless of whether you receive the form. Update your address directly with payers, as well as putting a forwarding order in with the U.S. Post Office. You’ll want to see any forms the IRS sees.

6. The IRS gets them, too. Any Form 1099 sent to you also goes to the IRS. The deadline is Jan. 31 for mailing Forms 1099 to taxpayers, but the payer generally has until the end of February to send all its Forms 1099 to the IRS. This year (2017, for 2016 payments), the IRS has moved up the filing date for Forms 1099-MISC reporting non-employee compensation in box 7. The reporting date to the IRS will now be the same as the due date for the forms to be issued to recipients, January 31.

7. Report errors immediately. If there is an error on a Form 1099 tell the payer immediately. There may be time for the payer to correct it before sending it to the IRS. If the payer has already dispatched the incorrect form to the IRS, ask the payer to send in a corrected form.

8. IRS Notices. If you forget to report a Form 1099, the IRS will send you a computer-generated letter billing you for the taxes. If it’s correct, just pay it.

9. Consider state taxes, too. Most states have an income tax, and they will receive the same information as the IRS. If you missed a 1099 on your federal return, your state will probably bill you too.

10. Don’t ask. Keeping payers advised of your current address is a good idea, as is reporting errors to payers. However, if you don’t receive a Form 1099 you expect, consider not asking for it. In some cases, if you are missing an IRS Form 1099, you may want to keep quiet. If you are expecting a Form 1099, you know about the income, so just report that amount on your tax return. IRS computers have no problem with that. If you call or write the payer and raise the issue, you may end up with two of them, one issued in the ordinary course (even if it never got to you), and one issued because you called.

For alerts to future tax articles, email at Wood@WoodLLP.com. This discussion is not legal advice.

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IRS Hunts Debit Cards For Tax Evasion, As Court Approves John Doe Summons

The IRS has gone after tax evasion in Swiss and other offshore accounts, and has collected a staggering $10 billion. Then, the IRS turned to virtual currencies like Bitcoin, after a court allowed an IRS John Doe summons for bitcoin and other virtual currencies. Now, the IRS is going after some debit card use, too.

How does the IRS get on to you, you might wonder? If the IRS knows who you are, it can audit or investigate you. But increasingly, one important technique is the John Doe Summons. IN 2008, the lid came off the hushed world of Swiss banking when a judge allowed the IRS to issue a John Doe summons to UBS for information on U.S. taxpayers using Swiss accounts. Now, the IRS has turned to certain debit cards.

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With a normal summons, the IRS seeks information about a specific taxpayer whose identity it knows. A John Doe summons allows the IRS to get the names of all taxpayers in a certain group. The IRS needs a judge to approve it, but recent IRS success may to lead to more. The IRS tells its own examiners to use a John Doe Summons only after trying other routes. The IRS Manual says it may be possible to obtain taxpayer identities without issuing a John Doe summons.

A federal court in Montana has authorized the IRS to serve a John Doe summons on Michael Behr of Bozeman, Montana, seeking information about U.S. taxpayers who may hold offshore accounts established by Sovereign Management & Legal LTD (SML), a Panamanian entity. The IRS wants records of U.S. taxpayers issued a Sovereign Gold Card debit card between 2005 and 2016 that could be used to access the funds and to evade U.S. taxes. U.S. taxpayers seeking to hide their offshore assets often utilize the services of offshore trusts and corporate service providers that open bank accounts, create corporations and other entities, and serve as nominee officers.

In its petition seeking the John Doe summons, the United States alleges that SML advertises various “packages” to allow taxpayers to hide their assets offshore. These packages include corporations owned by other entities (to include fake charitable foundations), all held in the name of nominee officers provided by SML. SML then opens bank accounts for these entities and provides debit cards in the name of the nominee to the taxpayer. By using such cards, taxpayers seek to access their offshore funds without revealing their identities.

The court found a reasonable basis for believing that U.S. taxpayers may be using the Sovereign Gold Card to violate federal tax laws. The Justice Department previously obtained a similar order from the U.S. District Court for the Southern District of New York, authorizing eight John Doe summonses on banks and other entities for information related to SML and its customers.

The recipient of a John Doe Summons is often between a rock and a hard place. The recipient may want—or be required to—protect its customers. But it also will not want trouble with the IRS. And fighting in court can be expensive and unproductive.

As occurred in the recent John Doe Summons served on Coinbase, there was no allegation that Coinbase has engaged in any wrongdoing in connection with its virtual currency exchange business. Rather, the IRS uses John Doe summonses to obtain information about possible violations of internal revenue laws by others, individuals whose identities are unknown. The debit card case is similar.

There may be court battles, and the IRS may not get the information it wants right away. Even when it does, it will take the IRS time to collate and process it.  In the end, though, it is a good bet that the IRS will put the information it acquires to good use. That suggests that for offshore accounts users (and SML debit card holders) who have not yet made corrective filings with the IRS should consider it. Once it is too late, it is too late.

For alerts to future tax articles, email me at Wood@WoodLLP.com. This discussion is not legal advice.

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