File an FBAR or Find Yourself Behind Bars

A few years ago the IRS offered a tax amnesty program for US citizens who failed to declare assets held in foreign bank accounts. This came on the heels of a highly publicized legal action against UBS. The IRS forced the Swiss based bank to turn over the account information of US citizens. The IRS was clamping down on tax evaders, exploiting the protection of Switzerland's bank secrecy laws to hide income and assets. The IRS was looking to determine if FBARs had been filed by the banks American clients.

Individuals and corporations with assets greater then $10,000 held in foreign bank accounts must file a Foreign Bank Account Report (FBAR) with the IRS or face potential legal action.

UBS counted 52,000 US citizens as private banking clients. It would be safe to assume that most of those accounts had balances greater then the $10,000 declaration threshold. 

Any US investor participating in a foreign based fund partnership or investment vehicle must also file an FBAR. High Net Worth (HNW) investors and their tax advisers should conduct due diligence on private bankers and asset managers to confirm that FBARs and appropriate declarations and forms have been filed by investment partnerships and their administrators. HNW tax advisers should contact the chief compliance officer at the fund to request an attestation letter stating that the fund is in full compliance with foreign bank reporting requirements.

Bernie Madoff and Sir Allen Stanford may look good in orange prison jumpsuits but that doesn't mean it will look good on you. Don't become a slave to fashion. Get compliant. Check with your tax adviser to make sure FBARs are filed.

Get compliant and file an FBAR with Sum2's AML SAR Filing BSA Reporting App. The app is used by financial institutions, compliance professionals and industry service providers to comply with Anti-Money Laundering (AML) best practice provisions and regulations. Protect your clients and your business from money laundering risk with this critical compliance application.

Since 2002,  Sum2's AML compliance products have helped investment managers, broker dealers, MSB's, banks and credit unions comply with the AML provisions of The Patriot Act, BSA Reporting and OECD best practices. 

Get AML aware. Download AML SAR Filing / BSA Reporting App on Google Play.

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Risk: AML, FBAR, legal, compliance, tax, reputation, criminal prosecution, IRS, OECD, Patriot Act, MSB, private banking, hedge funds, CPA, UBS, Credit Unions, SAR filing, BSA Reporting

Anatomy of a Tax Audit

Its that time of year again.  April 15th looms ever larger as small businesses scramble to meet the IRS  tax filing deadline.  For many small businesses, tax filing is handled by a trusted accountant or business adviser. That tends to take the trauma out of this annual exercise in pain.  But even with the help of a tax professional the angst of the season is always a pressing concern.   

The enclosed infographic published by oBizMedia, displays some startling data about audit risk and its cost to small businesses.  For example in 2011 over 50,000 small businesses were audited by the IRS.   The IRS recovered over $30 billion in taxes as a result of auditing business returns.  A considerable sum of money that small businesses once counted as profits now paid to the tax man.  That can turn a good year of business into a not so good year.  

Its only natural that during times of economic adversity all business owners want to keep as much as they can.  During these times some business owners may be a bit more aggressive in its tax strategy to minimize tax liability.  It's a risk that unfortunately can come back to haunt SME's with additional tax liabilities, fines, penalties and costly litigation.

As the tax filing deadline approaches it is important to keep in mind the various audit risk factors certain deductions raise with the IRS. In the past the agency has published guidelines agents utilize to risk profile tax returns. Claiming these deductions heightens the risk of an audit by the IRS. It is a critical that SMEs are aware of these audit risk factors and incorporate this intelligence into its tax filing strategies. 

Sum2 developed the IRS Audit Risk Program (IARP) to provide SME’s an audit risk assessment tool to keep the taxman away from the door. IARP outlines tax code focus areas where caution should be exercised when filing tax returns. Business owners can rest a bit more easy that audit risk is being effectively managed.  Get Tax Audit Aware with IARP.

Get Tax Aware   

risk: tax code, tax audit, regulatory compliance, accounting, legal,

*Be sure to consult with your tax adviser for guidance on tax strategy and audit sensitivities specific to your business,  

Tax Deductions and Tax Audit Risk

The filing deadline for filing taxes is fast approaching. Small Mid-Size Business Enterprises (SME) need to be aware of all the deductions afforded to them by the tax code.  

Our friends from Balboa Capital sent us this reminder about the Section 179 Tax Deduction...

...There have been a lot of questions surrounding the Section 179 deduction for 2014*

…According to the IRS, the Section 179 tax deduction limit as of January 1st 2014 is $25,000. This is a sharp drop from last year's limit, but it still presents you with an opportunity to deduct a certain amount of your equipment, technology and software purchases when it comes time to do your business taxes. This means you can buy or lease up to $25,000 worth of equipment and deduct its cost in 2014, providing you place it into service this year. You may also elect to use Section 179 with more than one piece of equipment, as long as the total deduction amount does not exceed $25,000…”  

For a small business owner this is a significant tax savings. Think of what $25,000 can do for a small business owner? It is a significant capital contribution to the business. Effectively deployed it has the potential of funding a new business initiative (new software application, marketing program, delivery vehicle) or it can just as well cover a personal expense (think tuition payment for the kid in college) and this timely advice is well received.  

As the tax filing deadline approaches it is important to keep in mind the various audit risk factors certain deductions raise with the IRS. In the past the agency has published guidelines agents utilize to risk profile tax returns. Claiming these deductions heightens the risk of an audit by the IRS. It is a critical that SMEs are aware of these audit risk factors and incorporate this intelligence into its risk management program.  

Sum2 developed the IRS Audit Risk Program (IARP) to provide SME’s an audit risk road map to mitigate audit risk factors. IARP outlines focus areas of heightened agency scrutiny targeting specific issues that are reported on tax filings. IARP users gain the confidence and surety that audit risk factors are being effectively managed.  Get Tax Audit Aware with IARP.

Get Tax Aware

*Be sure to consult with your tax advisor for information on the Section 179 eligibility requirements that affect your business…

risk: tax code, tax audit, regulatory compliance, accounting, legal, Section 179