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Taxation & Estate Planning

: IRS Problem Solver Blog

IRS Wins Some Loses Some

By Darrin Mish

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Deutsche Bank Fined $554 Million by IRS

The Justice Department and federal prosecutors intend to enforce a non-prosecution agreement where the bank continues to give its cooperation. The Justice Department and prosecutors also consulted an independent expert to ensure the bank would not repeat such actions.

In the UBS case, the Swiss bank was fined $780 million for its role in helping its American clients dodge taxes.

Deutsche Bank made an official statement expressing its relief that this case is now closed. In its statement, the Bank said that since 2002, it has taken steps to strengthen its policies and procedures to comply strictly with the laws of the land in which it does business and ensure the highest standards of ethical conduct in its business dealings.

In addition, the bank said that the fine imposed on them would not affect its profitability because it has already made provisions for this amount earlier.

Indian Tribe Sues IRS

The Santa Ynez Band of Chumash Mission Indians is taking up a lawsuit against the IRS. In their lawsuit, the Indian tribe claims that the IRS has double-taxed them and are demanding a refund of the taxes they paid amounting to some $3.8 million.

The tribe has been given the license to operate 2,000 slot machines in Santa Ynez, California. The dispute arises over whether the money distributed to tribal members from the gaming activities is subject to taxes. According to the tribe?s attorney, Glen Feldman, Congress has decided that all gaming proceeds distributed to tribal members are subject to federal taxes. But the tribe contends that this contravenes California law that states that casino income is exempted from taxes but only if the recipient is a member of the casino tribe, lives in the same reservation where the casino is located or if they live out of state.

According to Feldman, the gaming money can be taxed by the IRS from the tribe itself or from its individual members but not from both sources.

The disputed taxes are from the 2003 and 2004 tax years. The IRS audited the tribe and assessed back taxes and penalties on this amount. As a result, the tribe was ordered to pay $1,041,745 in May 2006 to cover the tax year 2003 and another sum of $2,891,865 for the tax year 2004.

But most of the tribal members had also paid their individual income taxes, therefore the tribe as a whole should not have been levied the taxes. Hence, the tribe is suing the IRS for a refund of the $3.8 million it had paid.

IRS Wins Some, Loses Some

Deutsche Bank Fined $554 Million by IRS

In a case that is strikingly similar to that of UBS Bank of Switzerland, Deutsche Bank has admitted to criminal wrongdoing in helping wealthy American account holders avoid taxes. As a result, it has agreed to pay the IRS a $554 million fine, the amount the IRS has not collected in taxes and fines between 1996 and 2002. The fine imposed on Deutsche Bank also includes a $149 million civil penalty. This ends a long-running dispute between the bank and the IRS.
The Justice Department and federal prosecutors intend to enforce a non-prosecution agreement where the bank continues to give its cooperation. The Justice Department and prosecutors also consulted an independent expert to ensure the bank would not repeat such actions.
In the UBS case, the Swiss bank was fined $780 million for its role in helping its American clients dodge taxes.
Deutsche Bank made an official statement expressing its relief that this case is now closed. In its statement, the Bank said that since 2002, it has taken steps to strengthen its policies and procedures to comply strictly with the laws of the land in which it does business and ensure the highest standards of ethical conduct in its business dealings.
In addition, the bank said that the fine imposed on them would not affect its profitability because it has already made provisions for this amount earlier.

IRS Wins Some Loses Some is a post from: IRS Tax Problem Solver Blog - IRS Help