Are there conflicting signals from IRS as it relates to Section 965?
IRC Section 965 (Treatment of Deferred Foreign Income Upon Transition to Participation Exemption System of Taxation) was part of the TCJA enacted on December 22, 2017. The sections requires a United States shareholder to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated […]
Deficiencies or Weaknesses in an OFAC Sanctions Compliance Program can lead to OFAC Administrative Actions
On May 2, 2019, OFAC (Office of Foreign assets Control) published guidance titled “A Framework for OFAC Compliance Commitments”. The purpose of the OFAC Framework guidance is to encourage a “risk-based” approach to “Sanctions Compliance” through developing, implementing, and routinely updating a Sanctions Compliance Program (SCP). OFAC Compliance Applies to all “U.S. Persons” This includes […]
Who are you partnering with for your Financial Institution’s BSA/AML Independent Testing?
Financial Institutions ought to design and evaluate compliance programs to meet BSA/AML requirements and to satisfy Bank Examiner expectations. A Financial Institution’s Compliance Programs must comply with the requirements under Title 31 and, at a minimum, must include the five (5) Pillars of AML: (1) A system of internal controls to assure ongoing compliance; (2) […]
IRS issues FATCA Relief but not for All
On September 6, 2019, IRS announced Relief Procedures for Certain Former Citizens. These are procedures for certain persons who have relinquished, or intend to relinquish, their United States citizenship, who wish to come into compliance with their U.S. income tax and reporting obligations and who wish to avoid being taxed as a “covered expatriate” under […]
Financial Institutions and the FCPA
The Foreign Corrupt Practices Act (FCPA) prohibits payment of bribes to foreign officials to assist with obtaining or retaining business. It requires companies whose securities are listed in the US to maintain books and records that accurately and fairly reflect their transactions as well as to devise and maintain an adequate system of internal accounting […]
Can you identify a Misappropriation Scheme?
Misappropriation is the use of property or funds of another person for an unauthorized purpose. In misappropriation, the perpetrator steals or misuses an organization’s belongings and resources; usually without force. The organization’s assets can be misappropriated by an employee, a customer or a third-party provider (supplier/vendor). When an organization is identifying a misappropriation scheme, it […]
Payers and Payees have Obligations to Comply with Backup Withholding
Backup Withholding requires a payer to “withhold tax” from payments that are not otherwise subject to withholding. A Taxpayer (payee) may be subject to Backup Withholding if it: • fails to provide a correct taxpayer identification number (TIN) when required, OR • fails to report interest, dividend, or patronage dividend income. A payer must withhold […]
Wondering about the tax treatment of a Cryptocurrency Hard Fork and Airdrop?
On 10/9/19, IRS issued Rev. Rul. 2019-24 addressing the issues of a Taxpayer having gross income under § 61 of the Internal Revenue Code as a result of a hard fork of a cryptocurrency that the Taxpayer owns if the Taxpayer DOES NOT RECEIVE units of a new cryptocurrency….… AND…… of a Taxpayer having gross […]
Can the “Corporate Transparency Act” jeopardize the USA as the preferred Tax Haven?
Can the “Corporate Transparency Act” jeopardize the USA as the preferred Tax Haven? This article appeared at the Daily Business Review on 12/10/19.
Does your Financial Institution utilize OFAC Risk Based Approach Matrix?
A Financial Institution’s OFAC risk profile is determined based on its products, services, customers and geographic locations. A Financial Institution’s OFAC compliance program is required to: Identify higher-risk areas Provide internal controls for screening and reporting Establish independent testing for OFAC compliance Designate a bank employee or employees responsible for OFAC compliance Create training programs […]
IRS “BEEFS UP” Section 965 COMPLIANCE for 2017 and 2018 Returns
On July 2, 2018, the IRS introduced a Compliance Campaign directed at Section 965 (Transition Tax) of the Internal Revenue Code (IRC). In its original launch, the Section 965 Campaign stated that U.S. shareholder are required to pay a “transition tax” on the untaxed foreign earnings of certain specified foreign corporations as if those earnings […]
Indirect linkages to Tax Havens
The U.S. income tax system is based on the idea of voluntary taxpayer compliance. It is the taxpayer’s responsibility to report all reportable worldwide income. Some people attempt to evade paying taxes by failing to report all or some of their reportable worldwide income. According to the most current Federal Tax Compliance Research Report, there […]
