IRS updates voluntary disclosure practices for hidden offshore funds

The Internal Revenue Service has updated its voluntary disclosure procedures for taxpayers with previously undisclosed funds, instituting tougher procedures. 
IRS deputy commissioner for services and enforcement Kirsten Wielobob issued a memorandum last week that the IRS posted publicly Thursday, outlining the process for all voluntary disclosures following the closing of the IRS’s Offshore Voluntary Disclosure Program on Sept. 28, 2018. She noted in the memo that the 2014 OVDP began as a modified version of the OVDP that launched in 2012 after earlier programs in 2009 and 2011. “These programs were designed for taxpayers with exposure to potential criminal liability or substantial civil penalties due to a willful failure to report foreign financial assets and pay all tax due in respect of those assets,” she wrote. “They provided taxpayers with such exposure potential protection from criminal liability and terms for resolving their civil tax and penalty obligations.” The new procedures are effective for all disclosures after Sept. 28, 2018. The penalties have grown steadily stiffer for taxpayers who continue to hide their funds in foreign bank accounts, and the latest version of the program may give taxpayers and tax practitioners pause. “Under the new procedures, taxpayers will find that the cost of making a disclosure has increased,” commented Barbara Kaplan, a tax attorney and shareholder at the law firm Greenberg Traurig, in an email from the firm. “A number of things have changed: the number of years for the program, the application of penalties, a right to go to Appeals to contest the IRS findings after examination, the making of the offshore and domestic programs the same and the requirement to include an explanatory narrative. It also appears that the examination phase is more like a true IRS audit than just a compliance review.” A fraud penalty, and a willful FBAR penalty for offshore cases where taxpayers intentionally failed to file a foreign bank account report, will now be applied to one of the six years of the disclosure period, or less if the noncompliance occurred over a shorter period of time, she noted. “Additional civil penalties can be expected,” Kaplan wrote in an email. “CI [IRS Criminal Investigation] will continue to screen all disclosures to determine if a taxpayer is eligible to make the disclosure. Once pre-clearance is granted, the taxpayer will have to disclose the nature of the non-compliance, including a narrative providing facts and circumstances, assets, entities and any related parties or professional advisors involved in the noncompliance.” That could have an impact on tax professionals who have advised taxpayers who have been hiding their funds. But taxpayers and their representatives will have to weigh the pros and cons of the new procedures. “The amended or delinquent returns will be examined and, at the end of the process, it is expected that an agreement will be reached,” said Kaplan. “Cooperation with the civil examination is required and, if not given, could lead to revocation of preliminary acceptance into the program. At the end of the day, taxpayers who afford themselves of this process will be relieved of criminal exposure but not the civil ramifications. For those who do not have criminal exposure, this program should not be used.”

140,300 new accounting and auditing jobs predicted by 2026

Approximately 140,300 new jobs for accountants and auditors are expected to be created by the year 2026, according to a new forecast.

The Knowledge Academy, a training and qualification provider, analyzed the findings from a Glassdoor report, “What’s Ahead for Jobs? Five Disruptions to Watch in 2018,” and estimated the number of jobs expected to grow the most by 2026. It found that the U.S. will see large growth in tech-related roles in non-tech industries such as finance, consulting and retail. However, many traditional jobs will also increase through the ranks as technology continues to develop.

The expected job gains come despite fears that artificial intelligence and automation will eliminate jobs in many sectors. AI is already helping the accounting, auditing and financial sectors, as well as many others. A recent study by the Pew Research Centre found that 48 percent of Americans are somewhat worried their job could be taken over by a robot and 25 percent are very worried at this prospect. Despite those fears, the unemployment rate is at its lowest point since 1969. According to the U.S Bureau of Labor Statistics, the unemployment rate in October was 3.7 percent, with the number of unemployed people in the U.S. around 6.1 million.

Besides accounting and auditing, other sectors are expected to gain an even greater number of jobs by 2026, according to The Knowledge Academy. They include home health and professional care aides (1.1 million new jobs), waiters, food service and cooks (907,700 new jobs), registered nurses (437,000 new jobs), software developers (253,400 new jobs), janitors and cleaners (233,000 new jobs), operations managers (205,900 new jobs), medical assistants (184,600 new jobs), nursing assistants (164,000 new jobs), and construction laborers (153,300 new jobs).

Tabla de taxes en Estados Unidos

La tabla de taxes en estados unidos más altas corresponden a 5 estados, por ejemplo la tasa de Washington es del 8.92%, el de Alabama es de 9.01%, la tasa de Arkansas es del 9.30%, la tasa de Tennessee es del 9.46% y el de Luisiana es del 9.98%.

De todos modos la tasa del impuesto a las ventas es diferente de cuerdo al estado, pero también en base a los ingresos recaudados de un impuesto que a su vez afecta a la economía.

Esta diferencia hace que los consumidores elijan comprar productos on line o cruzar la frontera, pues los consumidores también deben hacer frente a los impuestos a las ventas locales que pueden ser altas.

Pero un estado puede tener un impuesto a las ventas con un porcentaje moderado y en todo el estado se podría estipular una tasa local y estatal combinada alta comparándolo con otros estados.

A nivel estatal California es el estado con la tasa de impuestos a las ventas más alta: el 7.25%. En  Tennessee, Rhode Island e Indiana, la tasa es del 7%. En Colorado la tasa a las ventas es del 2.9% y en Wyoming, Nueva York, Hawái, Georgia y Alabama es del 4%.

Cuando no se cobra el impuesto a las ventas, tiene que ver con áreas con diferencia en la tasa de impuestos a las ventas entre dos jurisdicciones, ya que los consumidores de estas áreas hacen sus compras en las de bajos impuestos  como en los suburbios como por ejemplo en Chicago que evitan un tasa del 10.25% por el impuesto a las ventas.

Del mismo modo las empresas buscan áreas con tasas menores, como por ejemplo en Nueva Inglaterra las empresas minoristas buscan New Hampshire  en lugar de Vermont para instalar su empresa para evitar el impuesto a las ventas.

Top five tax planning opportunities for individuals in 2018

As we enter into the tax planning stage of the year, the focus shifts to helping clients understand the impact of the Tax Cuts and Jobs Act and optimize their tax positions. That is no small task, given that there are over 130 new tax provisions.

No. 5 — Itemized deductions versus the standard deduction

The Tax Cuts and Jobs Act roughly doubles the standard deduction. This means that for 2018, joint filers can enjoy a standard deduction of $24,000. However, the new law suspends personal exemption deductions and eliminates or limits many of the itemized deductions. For example, the state and local tax deduction is now capped at $10,000 per year, or $5,000 for a married taxpayer filing separately. Also, the Tax Cuts and Jobs Act temporarily eliminates miscellaneous itemized deductions subject to the 2 percent floor (like tax preparation fees and employee business expenses) and limits the home mortgage interest deduction to home acquisition debt of up to $750,000, or $375,000 for a married taxpayer filing separately.

So, what does this mean for tax payers? For those who typically claim the standard deduction, chances are their tax bill will decrease for 2018. Although personal exemption deductions are no longer available, a larger standard deduction, combined with lower tax rates and an increased child tax credit, may result in less tax. Also, you may find that clients who itemized last year won’t itemize this year, or they may be able to itemize for state income tax purposes but not for federal. You will need to run the numbers to assess the impact for each client. Depending on the results, you may need to adjust your clients’ estimated quarterly tax payments or encourage them to turn in a new Form W-4 to their employers.

No. 4 — Revisit your qualified tuition plans

Qualified tuition plans, also called 529 plans, are a great way to ease the financial burden of paying for college. Before the Tax Cuts and Jobs Act, earnings in a 529 plan could be withdrawn tax-free only when used for qualified higher education at colleges, universities, vocational schools or other post-secondary schools. Thanks to the Tax Cuts and Jobs Act, 529 plans can now be used to pay for tuition at an elementary or secondary public, private or religious school, up to $10,000 per year. If your clients are paying tuition for their children or grandchildren to attend elementary or secondary schools, encourage them to either set up or revisit their 529 plans. They’ll thank you for it later.

No. 3 — Watch out for home equity debt interest

Under the Tax Cuts and Jobs Act, home equity debt interest is no longer deductible. Or so you thought. According to the IRS, interest paid on home equity loans and lines of credit is deductible if the funds were used to buy or substantially improve the home that secures the loan. In other words, it’s treated as home acquisition debt subject to the new $750,000/$375,000 limit. This is good news for homeowners, but it forces you to trace how the proceeds were used. If your client used the cash to pay off credit card or other personal debts, the interest isn’t deductible, even if the payoff occurred prior to 2018.

No. 2 — Bunch charitable contributions

The new law temporarily increases the limit on cash contributions to public charities and certain private foundations from 50 to 60 percent of adjusted gross income. However, the doubling of the standard deduction and changes to key itemized deductions will prevent some clients from itemizing in 2018 and therefore benefiting from this increased limit. One way to combat this is to bunch or increase charitable contributions in alternating years. Suggest that clients set up donor-advised funds. This will allow them to claim a charitable tax deduction in the funding year and schedule grants over the next two years or other multiyear periods. Clients can take advantage of the deduction when they’re at a higher marginal tax rate while actual payouts from the fund can be deferred until later. It’s a win-win situation.

No. 1 — Maximize the qualified business income deduction

Perhaps the hottest topic of the Tax Cuts and Jobs Act is the new qualified business income deduction under Section 199A. Individuals who own interests in a sole proprietorship, partnership, LLC, or S corporation may be able to deduct up to 20 percent of their qualified business income. However, the deduction is subject to various rules and limitations.

Although the final official guidance is lacking on this new deduction, there are some planning strategies that can be considered now. For example, clients can adjust their business’s W-2 wages to maximize the deduction. Also, it may be beneficial for clients to convert their independent contractors to employees where possible, but make sure the benefit of the deduction outweighs the increased payroll tax burden and cost of providing employee benefits. Other planning strategies include investing in short-lived depreciable assets, restructuring the business, leasing and selling property between businesses, and, yes, even getting married.

Las 6 economías que crecerán más y menos en América Latina en 2018

Este debería ser un buen año para Latinoamérica en lo que se refiere a crecimiento económico.

Aunque sus pronósticos no son idénticos, varios organismos internacionales han proyectado que el Producto Interno Bruto (PIB) regional aumentará: un 2% según el Banco Mundial (BM); un 1,9% según el FMI y un 2,2% según la CEPAL.

"La economía de la región se encuentra en el medio de una franca recuperación, luego de dos años de crecimiento negativo. Sin embargo, aún enfrenta riesgos y desafíos en el corto y largo plazo", le dijo a BBC Mundo Carlos Arteta, economista jefe del BM.

Según el informe de esta organización titulado "Perspectivas Económicas Mundiales", el fortalecimiento del consumo y la inversión privada, especialmente en países exportadores de productos básicos, impulsarán el crecimiento regional.

En este escenario, la recuperación de Brasil -que representa 40% del PIB regional- es uno de los factores más importantes.

"Una mejora gradual en el precio de productos básicos y una menor incertidumbre en materia de política económica, ayudarán a la recuperación de la inversión en la región", agregó Arteta.

Además, se prevé que el repunte de la economía mundial y la demanda de materias primas por parte de China, beneficien a las exportaciones regionales.

La investigación del BM también proyecta que Brasil repuntará este año con un crecimiento de 2%, en la medida que mejores condiciones laborales y baja inflación, impulsen el consumo privado. También ese repunte depende de que desaparezcan los efectos residuales de la recesión y que exista un mayor respaldo a la inversión.

En el caso de México, el otro gigante regional, el organismo prevé un crecimiento de 2,1%, porque espera que se produzca una recuperación en las inversiones, aunque mucho dependerá de cómo evolucione la incertidumbre en torno al futuro del Tratado de Libre Comercio de América del Norte y al resultado de las elecciones presidenciales de julio.

"Una mayor incertidumbre política en países como Brasil, Guatemala y Perú podría frenar el crecimiento", dijo Arteta, ya que podría afectar la confianza de los agentes económicos.

FASB updates accounting for leasing standard

The Financial Accounting Standards Board issued an accounting standards update Monday to reduce cost and ease implementation of the leasing standard for financial statement preparers.

The ASU simplifies transition requirements. For lessors, it also provides a practical expedient for the separation of non-lease components from lease components.

The update also provides an option to apply the transition provisions of the new standard at its adoption date, instead of at the earliest comparative period presented in its financial statements; and a practical expedient that permits lessors to not separate non-lease components from the associated lease component if certain conditions are met.

“The targeted improvements in the ASU address areas our stakeholders identified as sources of unnecessary cost or complexity in the leases standard,” said FASB Chairman Russell Golden in a statement. “They represent the FASB’s commitment to proactively address implementation issues raised by our stakeholders to ensure a successful transition to the new standard without compromising the quality of information provided to investors.”

Senate panel advances IRS commissioner and introduces IRS reform bill

A closely divided Senate Finance Committee advanced the nominee for the next Internal Revenue Service commissioner, Charles Rettig, by a vote of 14 to 13, but he awaits a vote by the full Senate.

Rettig is a tax attorney at the Beverly Hills law firm Hochman, Salkin, Rettig, Toscher & Perez, P.C. who has spent most of his career representing clients before the IRS. If he is confirmed by the full Senate, he would succeed acting commissioner David Kautter, who is also the Assistant Secretary of the Treasury for Tax Policy. Kautter has been acting commissioner since the end of John Koskinen’s term last November. Rettig would be coming in at a time when the IRS is dealing with the massive tax cuts law that Congress passed last December.

“For the IRS to implement the biggest tax overhaul in a generation, it is essential that the agency is fully staffed and led by a strong, capable commissioner,” said Senate Finance Committee chairman Orrin Hatch, R-Utah, in a statement. “The job of commissioner is further complicated by years of mistrust and scandals at the agency. Chuck Rettig is the right pick to both implement tax reform and restore trust in the IRS. I am pleased that the committee advanced his nomination, and I look forward to the Senate acting quickly on his nomination so he can get started on the hefty tasks he will be charged with as the agency’s leader.”

However, Democrats on the committee voted against confirming Rettig, in part as a protest against the IRS and the Treasury Department’s decision this week to let 501(c)4 tax-exempt organizations, such as political action groups, avoid listing the names of their donors (see Many political tax-exempts no longer required to report donors).

“The Trump administration has taken a qualified nominee and dumped him right in the middle of a dark-money political firestorm of their own creation,” said Sen. Ron Wyden, D-Ore., the ranking Democrat on the committee. “And a radical change in tax law regarding transparency and disclosure has dragged the IRS and Treasury into a swirling set of questions about the president’s foreign financial ties and motivations. As a result, this nomination is no longer an isolated debate that can begin without context.”

Despite their differences, Hatch and Wyden agreed to introduce bipartisan legislation Thursday aimed at reforming some of the IRS’s administrative practices, echoing legislation that already passed the House in April.

The Taxpayer First Act is also based on two 114th Congress bills (S. 3156 and S. 3157) that passed the Finance Committee unanimously in 2016. It aims to increase taxpayer protections and electronic filing; enhance whistleblower protections; reform policies concerning IRS employees; increase scrutiny of IRS audit criteria; and support prevention of identity theft and tax refund fraud.

“Ensuring the IRS has greater flexibility and bringing it into the 21st century continues to be a top priority – especially with the largest rewrite of the tax code in more than three decades on the books,” Hatch said in a statement. “We’ve been working hand in glove with the administration to ensure a proper and seamless implementation of new policies and are confident this bill will streamline the agency in a way that protects taxpayers from fraud and abuse, increases electronic filing and supports IRS employees.”

“With every passing day there’s a new headline about hackers and crooks stealing taxpayer dollars and personal data,” Wyden stated. “Congress must do more to protect American taxpayers from fraud and financial abuse. This bipartisan legislation will make common-sense changes to help taxpayers and streamline administrative rules at the IRS, which will allow tax officials and agents to better safeguard the American people against financial predators.”

Diez de los CEO hispanos más influyentes de Estados Unidos.

La comunidad hispana en Estados Unidos crece día a día, en número de personas y en la importancia que éstas adquieren en el mundo empresarial. El mayor acceso de la comunidad hispana a la educación secundaria y universitaria ofrece al mundo laboral miles de profesionales con gran preparación que, en muchas ocasiones, llegan a  formar parte de los consejos de administración de algunas de las empresas más importantes del país.

El puesto de Chief Executive Officer (CEO)en EEUU, equivalente al Director Ejecutivo o Consejero Delegado encargado de la dirección, administración y organización de la compañía, ya no es un cargo exclusivo de una nacionalidad.

Aquí están diez de los CEO hispanos más destacados del momento:

 1. Paul Díaz (Kindred Healthcare). Es CEO de una de las mayores empresas del sector de la salud de Estados Unidos. La empresa tiene presencia en 46 estados, con 76.000 empleados y unas ganancias de 6.000 millones de dólares anuales. Paul Díaz es además participante en actividades de la Universidad George Washington, donde se graduó en Derecho.

 2. Pedro Fábregas (Envoy Air). Dirige una de las aerolíneas regionales más grandes del mundo. A su cargo tiene más de 14.000 personasque se encargan de que cada vuelo entre las 150 ciudades en las que operan salga de manera perfecta. Es graduado por la Universidad  del Sagrado Corazón de Puerto Rico y posteriormente obtuvo un máster en la Universidad de Miami.

3. George Paz (Express Scripts).  A cargo de una de las empresas más grandes de América, puede presumir de ser el CEO hispano mejor pagado de todos ya que ha llegado a conseguir crecimientos del 30% en un año. Asistió a la Universidad de Missouri y está caracterizado por su dirección humilde y de decisiones consensuadas.

4. Paul Raines (GameStop Corp.). Es el CEO de la compañía desde junio de 2010. La compañía se dedica al software de videojuegos y entretenimiento, con más de 17.000 empleados y unos ingresos de 9.500 millones anuales.

5. Carlos A. Rodríguez (Automatic Data Processing, Inc.). De origen cubano y con una carrera y MBA en Harvard, es el CEO de uno de los proveedores de capital humano y contratación más grande del mundo. Llevó a la compañía a ingresos de 11.000 millones de dólaresy trabajan en más de 125 países.

6. Joseph Mario Molina (Molina Healthcare, Inc.). Egresado de Química de la California State University y de Medicina por la Univeristy of Southern California.  La compañía que dirige fue nombrada una de las 25 hispanas con más influencia en América y sirven a más 1,8 millones de personas. Se trata de una empresa familiar fundada en 1980 que fue expandiéndose por todo Estados Unidos, desde California a los diez Estados en los que ya se encuentra.

7. Tony Jiménez (MicroTech). La empresa ofrece servicios de tecnología, computación e integración de sistemas de redes en más de 100 proyectos federales, con acceso a 2.500 vendedores y más de un millón de productos y servicios de tecnología. Jiménez es el fundador de la empresa y ha sido reconocido con varios premios y galardones como uno de los principales líderes en la industria de la tecnología y uno de los hispanos más influyentes del país.

8. Andrés Ruzo (Link America), Nacido en Perú, Ruzo fundó Link America en 1994 empresa dedicada al suministro de soluciones logísticasinnovadoras y servicios profesionales técnicos. En 2012 Link America fue reconocida como la primera empresa de mayor crecimiento hispano en los EE.UU.

9. Gerardo I. López (AMC Entretaiment Inc.). Desde 1920, AMC es una de las compañías de salas de cine más grande de EEUU, con más de 300 salas en todos el país. López ocupa su dirección desde marzo de 2009. Anteriormente ocupó el cargo de Vicepresidente Ejecutivo de Starbucks Coffee Company. Es licenciado en Marketing por la Universidad George Washington y MBA en Finanzas por la Universidad de Harvard Business School.

10. José Robles (USAA). Robles, nacido en Puerto Rico, es el presidente y director ejecutivo de USAA, una de las principales empresas de servicios financieros de Estados Unidos. Con sede en San Antonio (Texas) y con oficinas en todo Estados Unidos y Europa, USAA posee y gestiona activos de 182.000 millones dólares.