Posts Tagged ‘internal revenue service’

U.S. signs agreement with the Caymans to curb tax evasion

IRS

Newscast Media WASHINGTON—The United States has signed agreements with the Cayman Islands and Costa Rica to implement the Foreign Account Tax Compliance Act (FATCA), the U.S. Treasury Department said November 29. The bilateral pacts represent the first FATCA agreements in the Caribbean and Central America.

The department said on its website November 19 that “FATCA is rapidly becoming the global model for combating offshore tax evasion and promoting transparency.”

“Today’s announcement marks a milestone in the effort to promote global tax transparency,” said Deputy Assistant Secretary for International Tax Affairs Robert B. Stack. “These agreements underscore growing international cooperation in the effort to end tax evasion everywhere.”

FATCA, enacted in 2010, seeks to obtain information on accounts held by U.S. taxpayers in other countries. It requires U.S. financial institutions to withhold a portion of payments made to foreign financial institutions that do not agree to report information on U.S. account holders. The foreign institutions have the option of entering into agreements directly with the Internal Revenue Service (IRS), the U.S. government agency responsible for tax collection and tax law enforcement, or through one of two alternative agreements signed by their home country.

The Cayman Islands signed a “Model 1B agreement” November 29, meaning that financial institutions there will be required to report tax information about U.S. account holders directly to the Cayman Islands Tax Information Authority, which is the sole channel in the Cayman Islands for sending tax-related information to other governments. The Cayman Islands Tax Information Authority will relay that information to the IRS. Additionally, the Treasury Department said, the United States and the Cayman Islands signed a new Tax Information Exchange Agreement to replace one signed in 2001.

“By working together to detect, deter and discourage offshore tax abuses through increased transparency and enhanced reporting, we can help build a stronger, more stable and accountable global financial system. We look forward to collaborating with the government of the Cayman Islands to further these objectives,” said Julie Nutter, minister-counselor for economic affairs at the U.S. Embassy in London, who signed on behalf of the United States.

Click here to read or download the US-Cayman Islands agreement.

Click here to read or download the US-Costa Rica agreement.

The Costa Rica agreement was signed November 26 and is a “Model 1A agreement,” meaning that the United States will also provide tax information to the Costa Rican government on Costa Rican citizens with accounts in the United States.

“Today’s signing marks a significant step forward in our efforts to work collaboratively to combat offshore tax evasion — an objective that mutually benefits both our countries,” said Gonzalo R. Gallegos, chargé d’affaires of the U.S. Embassy in Costa Rica, who signed on behalf of the United States.

In addition to the 12 FATCA agreements that have been signed to date, the Treasury Department said, it has also reached 16 agreements in substance and is engaged in related conversations with many more jurisdictions.

http://newscastmedia.com/cayman-accounts.htm

         

Be the first to comment - What do you think?  Posted by Joseph Earnest - December 2, 2013 at 8:41 pm

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Bill to end tax loophole used by illegal immigrants passed by the house

Immigration and Customs

by Napp Nazworth

Newscast Media AUSTIN, Texas—The U.S. House of Representatives passed a bill last week that seeks to end the practice of illegal immigrants getting child tax credit refunds. Attention was brought to the issue after an investigative report by a local television news station went viral on the Internet.

Illegal immigrants are fraudulently taking advantage of the federal income tax’s child tax credit to the tune of $4.2 billion per year, reported Bob Segall of WTHR, an NBC affiliate in Indianapolis, Ind., on April 26. Since even those who do not pay takes can receive the credit, illegal immigrants have found that they are able to receive $1,000 per child from the federal government by filing taxes.

In some cases, though, the fraud goes even further. Segall found cases in which undocumented immigrants were taking the tax credit for nieces and nephews for whom they are not legal guardians and do not live in the United States. Some received more than $10,000 from the federal government.

Rep. Sam Johnson (R-Texas) sponsored the measure that would no longer allow undocumented immigrants to take the credit. It was added to a bill passed Thursday that seeks to offset planned cuts to defense spending with cuts to other parts of the federal budget. Johnson’s measure would contribute $7.6 billion to the over $300 billion bill.

Johnson credited Segall’s reporting for bringing attention to the issue in his public remarks on the House floor.

“Right now those who are here illegally can get cash from Uncle Sam by providing an IRS-provided tax payer ID number to claim this refundable credit. Illegal immigrants have gone so far as to file tax returns claiming children who do not live in America, according to a recent report by NBC Indianapolis’ WTHR,” Johnson said.

The Internal Revenue Service sent a letter to WTHR explaining that it had no authority to deny the credit to undocumented workers because they are allowed to receive the credit under current law. Johnson’s measure would require a Social Security number in order to receive the credit.

http://www.newscastmedia.com/taxcredit.htm

          

Be the first to comment - What do you think?  Posted by Joseph Earnest - May 14, 2012 at 9:59 pm

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Struggling taxpayers being bullied by the IRS

Filing taxes

Newscast Media– In a report released on Wednesday, the Internal Revenue Service’s internal watchdog charged that the agency is tormenting struggling taxpayers in the midst of the nation’s economic crisis. Nina Olson, the national taxpayer advocate, charged that the Internal Revenue Service is increasingly using “hard-core” tactics such as liens to enforce tax laws, creating needless misery for taxpayers.

The agency crackdown is “inflicting unnecessary harm” on hardworking Americans — even to the point of “torment,” Olson said in her report sent to Congress on Wednesday.

Though she has flagged aggressive IRS liens in previous annual reports, the watchdog said the impact of the agency’s actions has only been compounded by the extended economic downturn. The IRS filed 1.1 million liens in 2010, close to double the number it filed five years ago.

“By filing a lien against a taxpayer with no money and no assets, the IRS often collects nothing, yet it inflicts long-term harm on the taxpayer by making it harder for him to get back on his feet when he does get a job,” Olson said.

“Absent data that show liens make a meaningful contribution to revenue collection and especially in this economy, I find it unacceptable that the IRS continues to torment financially struggling taxpayers in this way.”

“Tax collection requires a delicate balancing of the government’s interest in collecting revenue and ensuring that all taxpayers pay their fair share of tax, on the one hand, and protecting financially struggling taxpayers from unnecessary harm, on the other,” Olson said. “Current IRS policies do very little balancing.”

Each January, Olson releases a report detailing the most serious problems faced by taxpayers and offers legislative recommendations to Congress. Atop her list this year is the need for comprehensive tax reform.

“There has been near-universal agreement for years that the tax code is broken and needs to be fixed,” Olson said in a statement. “Yet no broad-based attempt to reform the tax code has been made.”

One challenge, she said, is that “many taxpayers may nevertheless feel wedded to key aspects of the current system, undermining efforts at reform.” The IRS issued a statement defending its conduct and saying it recognizes many taxpayers are having financial problems.

“We have taken substantial steps to help struggling taxpayers facing collection problems,” IRS spokesman Terry Lemons said. “This includes how we’re using collection authorities given to us by Congress, including liens.” http://newscastmedia.com/irs-liens.html

1 comment - What do you think?  Posted by Joseph Earnest - January 6, 2011 at 5:38 pm

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IRS changes rules for whistleblowers

Internal Revenue Manual

Internal Revenue Manual

Newscast Media — In yet another endeavor to discourage the practice, the Internal Revenue Service has changed the rules regarding whistleblowing. When whistleblowers furnish the IRS with information that enables them to recover tax funds, the whistleblower is entitled to up to 30 percent of the money. However, some whistleblowers have complained that even after the IRS recovers these monies, they are given the cold shoulder by the agency.

Congress has called on the agency to reward whistleblowers on the premise that this is their greatest hope of infiltrating tax-evasion schemes, but a new change in the IRS manual may do more to discourage informants than encourage them. It was whistleblowers who helped the U.S. government get a $780 million settlement from Switzerland’s largest bank UBS, which admitted to helping U.S. citizens hide money from the IRS.

The updated manual says that a whistleblower gets nothing if instead of yielding a payment to the IRS, the tip stops a refund or reduces a credit. This has prompted Sen. Charles E. Grassley (Iowa), the ranking Republican on the Finance Committee, to call on the Treasury Department to delay implementation of the updated manual.

In a June 21, letter to Treasury Secretary Tim Geithner, whose department includes the IRS, Grassley said, “I have serious concerns that the new Internal Revenue Manual provisions will deter whistleblowers from filing claims. The decision to overrule the independent whistleblower office was contrary to law.”

The IRS refuses to answer questions about the updated manual, but in a two sentence response said, “The senior leadership of the Internal Revenue Service believes that the Whistleblower provisions are an important and valuable tax administration tool that can help to improve tax compliance. We are fully committed to using these provisions for the benefit of all taxpayers in this country who pay the taxes they owe.” http://newscastmedia.com/irs.htm

Be the first to comment - What do you think?  Posted by Joseph Earnest - July 4, 2010 at 3:53 am

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