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A Personal Note

Reflecting on my occupation and the perpetual changes as a US tax professional, it is a fact that the economic and business world is driven, shaped, confined and defined by stringent compliance requirements and unforgiving filing deadlines. Some are acceptable, some can be planned around, some are workable and most are heavy time commitment and accuracy as an absolute must. But there is a common theme that runs throughout: all are, to an extent, dependent on third-party involvement, and this presents both the problem and the answer.

The problem and the answer third-party may be in the separate working relationship of the client and advisor, which can occupy the same, yet separate, space as the ; trust protector and trustee and/or beneficiary; be called on to deliver professional advice when sought or hopefully well before the compliance deadline passes; and be relied on to deliver correct key data to governmental agencies. During the course of my working life, the individual, corporate, partnership, trust and estate will come into contact with a vast number of that ‘third party’ advisors who will wish to review your work for purposes of gaining new clientele or out of necessity by skilled people to ensure that the current plan, strategy and personnel are in place to secure the best outcome for the task in hand for the client’s benefit.

As a US tax professional for many fulfilling years, I am acutely awareness of the importance of adherence to the compliance code, which, in turn, demands a strict observance of regulatory deadlines. However, how often does a well-thought-out schedule go awry for want of timely and fully complete third-party input? Such cases can prove to be costly not only in monetary terms, reflected in increased professional costs and statute-based fines/penalties, but also in personal terms of ongoing client and professional relationships. Although it may be true that two lawyers rarely agree, it should not apply to strict compliance advice to the clients, while giving competent advise for a reasonable fee without instill fear uncertainty and/or doubt in the clients, but rather to educate the client to reduce the well founded fear, explain the compliance issues to overcome one’s uncertainty and show the client that you are very competent in these areas to eliminate any doubt in your abilities and commitment to the client.

My career began with the C.P.A. firm of Price Waterhouse & Co. in their New York office with an almost immediate relocation to their London, England office to assist American’s living and working overseas. Our responsibilities included US taxation of Americans expatriating overseas, repatriating to the US, long-term overseas residents, foreign tax planning, dual citizenship strategies, IRS representation at the US Embassy, creating Trusts and Gifting vehicles, death planning…which all summarized into being a friend of each client and promoting open communications to understand the current and futures needs of the clients before problems could be allowed to arise.

Compliance has evolved and grown at a staggering speed. Of course the internet has added in putting government compliance into hyperspeed that has accelerated both the population and the governments into a spiraling loop where information is now shared globally and privacy is absent, except for areas of planned privacy and planned delay of information.

Although for me not hard to believe, many people have not filed their tax returns, trust filings, gift tax returns, foreign bank account disclosures, kept corporate filings current with the various states/countries, paid their trustees, paid their accountants or even paid their attorneys. Like Farmers Insurance says, We’ve seen almost everything, so we know how to cover almost anything®.

1. Preparing 43 years of Tax Returns…The furthest back I had to reconstruct an individual’s tax return was 43 years, but the IRS and I successfully agreed that 7 years would be enough.

2. Tracing money across the Globe… the decedent had three wives in three different countries and at different times in his life (none to overlap); England, Isle of Jersey and Australia. My global search revealed his three lives and each Will represented a particular part of the globe. I had to trace the money trail through international banks and offshore companies and trusts as it related to time periods of the different marriages. We were able to find a compatible settlement with all members of the families…after this shocking fact was revealed to everyone.

3. Will disputes…The client was a friend of the decedent and provided a Will purported to be that of the decedent and there were no other Wills produced at Court, but the nieces and nephews disputed this Will. Prior to trial, but after depositions and interrogatories, we were able to reach a compatible resolution in mediation. (This situation is more common than a person would envision).

4. Will in the wallet for 30 years…One of my first cases in my practice was a decedent who drafted his own Will on a piece of paper and kept it in his wallet for over 30 years. When he died, the Will was not updated to taken into account two additional marriages and four new children. A simple Probate Court issue turned into 9 lawyers, representing minor children as well as current and ex-spouses. There was life insurance, but it was also not updated to account for the additional children.

5. Tax Fraud….while a client was away from home, the wife took out the equity from their home, over $500,000, by going to her bank, physically putting the money is several designer bags and departing the bank without any guards or protection. The client was already having issues with the IRS and after vigorously representing of the client before Special Agents with the Criminal Investigation Division of the IRS, the issue of Tax Fraud was dropped.

6. Strategies for Tax Amnesty…tax amnesty programs are now common in Europe (England, France, Italy and Greece are noticeable examples). Now with exchange of information agreements on amnesty between countries and even between the U.S. Treasury and the 50 States of the United States (taxing authorities in their own right) the decision to take amnesty quickly become complex as to which jurisdiction(s) to apply for amnesty, a form of legal forum shopping, or when to file or if you should file at all.