IRVINE,
Calif., April 18, 2023 /PRNewswire/ -- We tend to
think about offshore banks, pension and financial accounts and
income generating assets as outside of the reach of the federal
government. However, this is far from the case. We can see this in
the example of the Bank of Butterfield, which just recently entered
a non-prosecution agreement (NPA) with the United States government.
The NPA forces Butterfield to hand over funds associated with
their part in connection to enabling their clients' tax evasion
schemes. But it also creates a mandate that Butterfield cooperate
fully with additional IRS civil and criminal tax investigations
over the next three years, starting with the discovery of roughly
386 client files on U.S. taxpayer-clients who may have
intentionally or accidently fallen astray of the tax code. The NPA
also prevents Butterfield from contesting a U.S. government civil
forfeiture action.
The IRS has made no secret that it intends to ramp up its
prosecution of U.S. tax offenders that utilize undisclosed foreign
accounts and evade taxes on offshore businesses and investments,
especially those who attempt to hide funds overseas. If you had or
currently have an account with the Bank of Butterfield, or
currently have an account with a similar institution that may come
under government scrutiny, we can help. Call the dual licensed
International Tax Attorneys and CPAs at the Tax Law Offices of
David W. Klasing for an evaluation
of your options. We can be reached at (800) 681-1295 or schedule
online here.
NOTE: As long as a taxpayer that has
willfully committed tax crimes (potentially including non-filed
foreign information returns coupled with affirmative evasion of
U.S. income tax on offshore income) self-reports the tax fraud
(including a pattern of non-filed returns) through a domestic or
offshore voluntary disclosure before the IRS has started an
audit or criminal tax investigation / prosecution, the taxpayer
can ordinarily be successfully brought back into tax compliance and
receive a nearly guaranteed pass on criminal tax prosecution
and simultaneously often receive a break on the civil penalties
that would otherwise apply.
It is imperative that you hire an experienced and
reputable criminal tax defense attorney to take you through the
voluntary disclosure process. Only an Attorney has the Attorney
Client Privilege and Work Product Privileges that will prevent
the very professional that you hire from being potentially being
forced to become a witness against you, especially where they
prepared the returns that need to be amended, in a subsequent
criminal tax audit, investigation or prosecution.
Moreover, only an Attorney can enter you into a voluntary
disclosure without engaging in the unauthorized practice of law (a
crime in itself). Only an Attorney trained in Criminal Tax Defense
fully understands the risks and rewards involved in voluntary
disclosures and how to protect you if you do not qualify for a
voluntary disclosure.
As uniquely qualified and extensively experienced Criminal Tax
Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one
stop shop to efficiently achieve the optimal and predictable
results that simultaneously protect your liberty and your net
worth See our Testimonials to see what our clients
have to say about us!
USAO SDNY, Bank of Butterfield Enter Agreement to Resolve
Investigation
Earlier this month, Audrey
Strauss, the U.S. Attorney for the Southern District of
New York, with several colleagues,
announced via press release that the U.S. Attorney's Office entered
into a non-prosecution agreement ("NPA") with the Bank of N.T.
Butterfield & Son Limited.
Butterfield, a publicly traded entity (NYSE: NTB) based in
Bermuda, has been facing a
Department of Justice inquiry stemming from legacy business with
U.S. clients that was first reported in November of 2013. U.S.
taxpayer-clients account for a large slice of Butterfield's pie –
according to the text of the NPA, accounts open at Butterfield's
Bermuda and Cayman Islands operations that were held by
U.S. taxpayer-clients accounted for roughly $433 million in assets under management.
Butterfield avoids prosecution for their alleged role in
assisting U.S. taxpayer-clients in their effort to open and
maintain undeclared foreign bank accounts from 2001 through 2013.
The NPA runs for a term of three years, so if Butterfield breaks
with their cooperation during that period of time, they open
themselves up again to prosecution.
As part of the NPA, Butterfield agreed to pay $5.6 million to the U.S. government.
Roughly $4.9 millions of that total
represents the fees that Butterfield charged for their illicit
services. The remaining $700,000 will be paid directly to the IRS in
restitution for the estimated amount of unpaid taxes due to the tax
evasion.
Additionally, and perhaps most critically, Butterfield also
agreed as part of their "extraordinary cooperation" (according to
the press release) to provide the IRS's Criminal Division with
approximately 386 client files for those U.S. taxpayer clients that
were allegedly noncompliant with United
States tax code.
Impact of Butterfield NPA on U.S. Taxpayers
Strauss, head of what many consider to be the most capable arm
of the United States Justice
Department, suggested that this NPA is just one of many future
bullet points on the U.S. roadmap of targeting evasion enablers
like Butterfield. According to Strauss, "We will continue to
pursue financial services firms around the world that help their
clients evade U.S. taxes."
James C. Lee, Chief of the IRS
Criminal Investigations Division (IRS-CI), sent a message to
would-be foreign account-holding tax evaders: "Anyone who is hiding
money or assets offshore with the intent of committing tax evasion
will be found and prosecuted. It's not a matter of 'if,' it's a
matter of 'when.'"
The IRS and the rest of the federal government are determined to
make this latest development into a merely a footnote as part of a
much larger operation to track down and eliminate offshore tax
evasion schemes. If you are worried about future government actions
that may compromise your assets, speak to one of our dual licensed
tax attorneys and CPAs today.
If You Have a Butterfield Account, You May Face an IRS
Investigation
The press release announcing the Butterfield NPA specifically
says the following: "The NPA ... recognizes Butterfield's
cooperation, including its efforts to facilitate the production of
approximately 386 client files for non-compliant U.S. taxpayers,
which included the identities of those U.S. taxpayers."
The government can use any of the information gleaned from the
NPA to mount audits and investigations of any U.S. taxpayer
identified Butterfield's information dump.
But the information breach is not done yet. As noted above, the
term of the cooperation required by the NPA is three years from the
date of the agreement. If the federal government comes
knocking at Butterfield's door any time over those three years, the
bank is obligated to cooperate with the government's requests or
else open themselves up again for prosecution, a fate they
expressly hoped to avoid by agreeing to the NPA.
This cooperation also encompasses compliance with civil
forfeiture actions. Civil forfeiture is the U.S. government's
ability to seize any assets that they have reason to believe may
have been used in furtherance of a crime. This would include
financial assets (like foreign bank accounts) that may have been
used to subvert tax liability.
The explicit wording contained in the press release reads as
follows: "In connection with this forfeiture, Butterfield has
agreed not to contest a civil forfeiture action filed by
the United States." Without the
assistance of the bank, any client funds that are held by
Butterfield are subject to the prying eyes (and reaching arms) of
the federal government.
Call Us Today to Shore Up Your Defenses Against IRS
Investigations
When the IRS gets its hands on a possible tax evasion scheme,
they rarely let up. Taking the steps now to prevent such a
situation can be as easy as calling the Tax Law Offices of
David W. Klasing. We can be reached
at (800) 681-1295.
https://www.youtube.com/watch?v=g2UlIE8oxPA
https://youtu.be/f6Td79npgCs
Questions and Answers About Foreign Tax Audits
- Does the Fifth Amendment apply to foreign accounts?
- How is evidence cultivated from foreign sources?
- How is tax loss determined?
- How might an FBAR audit be resolved?
- Is a penalty assessment ripe for judicial review?
- Overview of an administrative criminal investigation
- What is the process of an FBAR referral?
- Statute of Limitations raised during a FBAR audit?
- Precautions to be taken in the pre-audit phase
- Recent international tax and reporting prosecutions
- Foreign account, entity and investment prosecution
- Who collects restitution and penalties?
- International tax investigations are an IRS high priority
Questions and Answers about FBAR Compliance and Disclosure
- Potential charges for not participating in the 2014 OVDP
- How many tax returns will I amend for my FBAR filing?
- FBAR Voluntary Disclosure program end
- Can I make a voluntary disclosure after the deadline?
- Can I use IRS Voluntary Disclosure if I Can't Pay?
- Potential reporting requirements and civil penalties
- What Happens if You Don't Disclose Foreign Accounts
- Criminal charges if you refuse voluntary disclosure
- Characteristics of FBAR voluntary disclosures
- What is required to make a valid voluntary disclosure?
- 2012 Offshore Voluntary Disclosure Initiative Objectives
- What is an FBAR?
- Filed amended returns without making a Voluntary
Disclosure
- Undisclosed foreign accounts: What exchange rate to use
- Why did the IRS announce the 2012 OVDI at this time?
- Should I consider making an offshore voluntary disclosure?
- Why to consider making a Voluntary Disclosure
- 2012 OVDI program vs. the voluntary disclosure practice
- Foreign bank account asset reporting/filing requirements
Questions and Answers about Offshore Voluntary Disclosure
Initiative (OVDI)
- Why hire David W. Klasing to
represent me in an audit
- 2011 Offshore Voluntary Disclosure Initiative FAQ
- Key Features of Initiative
- Eligibility For This Initiative
- 2011 OVDI Process
- Calculating The Offshore Penalty
- Statute of Limitations
- FBAR Questions
- Taxpayer Representatives
- Case Resolution
- What not to do!
- What to do!
- FBAR Reporting and Expired Voluntary Disclosure Program
- How the Law Offices of David W. Klasing Can Help
- Bank account overseas I didn't report on my income tax
- Do I have to maintain information on overseas bank
accounts
We Are Here for You
Regardless of your business or estate needs, the professionals
at the Tax Law Offices of David W.
Klasing are here for you. We are open for business and our
team will help ensure that your business is too. Contact the Law
Offices of David W. Klasing today to
discuss your business with one of our professionals.
In addition to our main office in Irvine, the Tax Law Offices of David W. Klasing has unstaffed (conference room
only) satellite offices in Los
Angeles, San Bernardino,
Santa Barbara, Panorama City, Oxnard, San
Diego, Bakersfield,
San Jose, San Francisco, Oakland, Carlsbad and Sacramento.
Our office technology allows clients to meet virtually via
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top-rated reliability, no one is messing with your meeting. To
schedule a reduced rate initial consultation via
GoToMeeting follow this link. Call our office and request a
GoToMeeting if you are an existing client.
Here is a link to our YouTube channel: click here!
Public Contact: Dave Klasing Esq.
M.S.-Tax CPA, dave@taxesqcpa.net
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