Tax Controversy and Financial Crimes Report

New Jersey recently announced the New Jersey Tax Amnesty program.  The New Jersey Division of Taxation has indicated that both individuals and businesses may qualify for the program.  The amnesty program began on November 15, 2018 and goes through January 15, 2019.  The New Jersey Division of Taxation will waive late filing and late payment penalties for taxpayers who come forward through the program.  The New Jersey Division of Taxation will also waive half of…
On November 16, 2018, Matthew D. Lee will moderate a panel at the annual White Collar Practice seminar sponsored by the Pennsylvania Association of Criminal Defense Lawyers. With the Special Counsel’s high-profile indictments of Paul Manafort as context, Matt’s panel will address the latest developments in tax and money laundering cases, with a particular emphasis on the following: The broadening scope of the international money laundering statute; The Justice Department’s continuing crackdown on offshore tax evasion; The…
On September 29, 2018, the Internal Revenue Service closed for good the long-running Offshore Voluntary Disclosure Program (OVDP), its hugely successful tax amnesty program for undisclosed offshore financial assets. Since March 2009, the IRS has maintained an offshore voluntary disclosure program in some form or fashion, and more than 56,000 taxpayers have taken advantage of such programs to voluntarily return to tax compliance. The U.S. Treasury has collected a whopping $11.1 billion in back taxes, interest, and penalties…
Today the Internal Revenue Service’s Large Business and International division (LB&I) announced the approval of five additional compliance campaigns. LB&I announced on January 31, 2017, the rollout of its first 13 campaigns, followed by 11 campaigns on November 3, 2017, five campaigns on March 13, 2018, six campaigns on May 21, 2018, five more on July 2, 2018, and five more on September 11, 2018. In addition, LB&I continues to review the tax reform legislation…
Our colleague James W. Minorchio has written a client alert about recent Internal Revenue Service guidance that clarifies when meals or drinks will be allowed as a deductible business expenses following the changes made by the Tax Cuts and Jobs Act. The TCJA generally disallowed any deduction for expenses related to entertainment, amusement or recreation. But the law did not specifically address the deductibility of business meals or the food and beverage expenses incurred in connection with…
Ian M. Comisky and Matthew D. Lee have authored a Journal of Taxation article entitled “IRS in the Offing? Marinello Limits Tax Obstruction Prosecutions.” In their article, Ian and Matt write that its recent decision in Marinello, the U.S. Supreme Court dealt taxpayers a rare win by significantly constraining the government’s ability to employ the criminal tax obstruction of justice statute. Construing the Section 7212(a) “Omnibus Clause,” which makes it a felony “corruptly or by force” to “endeavo[r] to…
Our colleague Ernest Badway writes about a recent decision in a federal criminal case rejecting the defendant’s argument that there was no securities fraud because he was selling digital tokens. The case involved charges that the defendant had defrauded investors in an initial coin offering. Ernie writes that “[o]ne of the big takeaways from this case is that courts, at least, initially, seem to be reluctant to claim crypto instruments are not securities. It almost appears that, like…
Your company is under investigation. You hire outside counsel to debrief your employees about the allegations. But are the interviews privileged? Do you have to provide each employee with his or her own attorney? The fourth episode of Matthew D. Lee’s new five-part podcast, “Federal Agents at the Door,” cuts through the confusion surrounding legal representation during an investigation. A partner in the firm’s White-Collar Criminal Defense & Regulatory Compliance Practice, Matt explains why…
We recently wrote on the new proposed regulations addressing the availability of charitable deductions when taxpayers receive or expect to receive corresponding state or local tax credits for contributions.  The proposed regulations require a taxpayer who makes a contribution to a charitable organization to reduce his charitable deduction by any state or local tax credit that he receives or expects to receive.  Readers may find more about the proposed regulations here.  After the proposed…
The Bipartisan Budget Act of 2018 eases the requirements for combat-zone contractors to claim the foreign earned income exclusion.  A U.S. citizen is generally taxed on his worldwide income.  The foreign earned income exclusion, however, allows a taxpayer to exclude foreign income from his gross income for U.S. tax purposes, up to a certain dollar threshold.  For 2018, the threshold is $103,900. But the exclusion only applies to a taxpayer whose tax home is in…