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Horowitz & Weinstein in the News
Investor in alleged foreign currency scam sues Bergen County duo
Bergen County Record, March 27, 2012
An Illinois foundation that doles out college scholarships was among the investors in what the FBI claims was a foreign currency scam involving two Bergen County men.
In what appears to be the first investor lawsuit in the unfolding case, the MWF Foundation Inc. — a non-profit run by Michael Fehrenbacher — invested $655,000 into the alleged fraud.
The suit, filed Monday in federal court in Illinois, sheds new light on who invested in an alleged fraud involving foreign currency trading as well as others associated with the case.
Samuel Neschis, Fehrenbacher’s attorney, said the foundation also donates to food pantries. “They’re unable to make additional grants at this time,” Neschis said.
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President Obama’s Budget and Offers In Compromise (OIC)
President Barak Obama’s recently released budget proposal includes a provision to eliminate the 20% filing fee to file an Offer In Compromise (OIC). We will have to wait to see if this provision becomes part of the final budget.
For more information or for assistance with other criminal tax concerns, contact Horowitz & Weinstein.
2012 IRS Offshore Voluntary Disclosure Program Begins
The IRS has announced the 2012 Offshore Voluntary Disclosure Program for Foreign Accounts, Foreign Bank Accounts and FBAR filings. The 2012 follows the pattern set by the 2009 IRS Offshore Voluntary Disclosure Program and the 2011 Foreign Bank Account Voluntary Disclosure Programs. The voluntary disclosure programs include reduction of penalties related to foreign accounts and assets but each new program has featured less of a reduction. The 2012 OVDP uniquely does not have a deadline, but the IRS has reserved the right to increase penalties and change any other terms of the program at any time. Since 2009 the trend has been for terms to become less favorable. The penalties have increased with each new offshore disclosure program, though they remain far less than what a taxpayer would face without the program. Therefore it behooves the taxpayer to enter the program as quickly as possible so that they receive the most favorable terms.
For more information on the 2012 Offshore Voluntary Disclosure Program or for more tax related legal concerns, contact Horowitz & Weinstein.
The What’s Next For Internet Sales, Internet Sales Taxes and Internet Affiliate Marketing?
It’s Called the Marketplace Fairness Act
Illinois Senator Dick Durbin is one of the Senators who introduced Internet Sales Tax Reform through the Marketplace Fairness Act which, according to the Act is designed to “restore States’ sovereign rights to enforce State and local sales and use tax laws, and for other purposes.”
The Act establishes a basis and methodology for States to charge sales tax when a Seller makes a sale to a customer in another State. Intriguing though, is the Small Seller Exemption which in effect allows businesses with less than $500,000.00 in previous annual sales to continue to make sales without charging sales tax if they can do so under present rules. This could give small businesses an advantage over “big box stores” and other large sellers.
In Illinois, collections of Illinois Sales Tax, Retailers Occupation Tax (ROT), Use Tax (UT), Motor Fuels Tax, Service Use Tax (SUT) and Service Occupation Tax (SOT) are enforced by the Illinois Department of Revenue through Sales Tax Audits and Illinois Department of Revenue Collection Acts which could include Levy of bank accounts, levies on other property, revoke suspend, or hold a business certificate, and revoke a sales tax business certificate.
For more information on online sales tax, the Illinois Department of Revenue, or other civil or criminal tax law concerns, contact Horowitz & Weinsein.
Foreign Trusts and Gifts
For quite a few taxpayers, filing their yearly tax returns doesn’t go much beyond the trusty old Form 1040. There are of course many other forms for reporting to the IRS and one that is especially worth noting is Form 3520, a return for reporting transactions with foreign trusts and the receipt of foreign gifts.
For 2010, foreign trust and gift reporting was changed primarily by the HIRE Act. Specifically a number of penalties for failure to report foreign trusts and gifts have been modified and new penalties have been introduced. In addition, the scope of individuals who are required to file Form 3520 has been expanded. The penalties for failing to file can be severe, in general amounting to $10,000 or a percentage of the assets in questions (usually 35%), whichever is greater.
The specific requirements and nuances of foreign gift and trust reporting and compliance are complex and of course the best course of action is to consult a tax professional. Here are the basics.
You have to file Form 3520 for a tax year if you received a gift from a foreign (meaning non-US) source of $100,000 or more from an individual or $14,165 or more from a corporation or partnership. You must file if you are a U.S. person who received a distribution from a foreign trust. You must also under certain conditions file if you are the owner or part owner of certain foreign assets.
For more information on foreign gift reporting, foreign trust compliance, or for help with other tax related legal concerns, contact Horowitz & Weinstein.