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July 24, 2016 / 18 Tammuz, 5776

Posts Tagged ‘tax’

Haredi Party Spearheading Effort to Protect Israeli Religious Charities from US Tax Authorities

Tuesday, June 7th, 2016

The heads of charity organizations in the ultra-Orthodox society, commonly known as Gemachim, received at least a temporary measure of relief from the Knesset Finance Committee, chaired by MK Moshe Gafni (UTJ), ahead of a new amendment of the Income Tax Act that takes effect in September and compels Israeli financial institutions to report through the local tax authorities on the Israeli financial affairs of US citizens. The amendment is the result of the Foreign Account Tax Compliance (FATCA) agreement between Israel and the US, which was a prerequisite for continued cooperation between Israeli and American financial institutions.

It’s not much, but MK Gafni demanded that the Finance Ministry and the Bank of Israel order the banks to give the Gemachim time until the end of June to resolve their status as public institutions, which he hopes would allow them to exclude themselves from the FATCA rules. Gafni envisions a tweaking of the amendment to exclude groups with deposits of less than $50 thousand, or holdings worth less than $50 million.

According to Chairman Gafni, the new regulations could bring the collapse of the Gemachim. “The Israeli government signed an agreement with the US government without considering the disastrous consequences for one of the most important enterprises of the Jewish people that has existed for millennia — the charity and mutual aid societies,” Gafni said, explaining that the Gemachim are “the only means at the disposal of a person under financial duress to receive an interest-free loan to get back on his feet.”

MK Israel Eichler (UTJ), Chairman of the Public Petitions, summoned Dr. Ilan Steiner, Director of the Bank of Israel Currency Department, to his committee hearing, to warn him against another aspect of the US attack on these charity institutions. According to Eichler, banks are being forced under pressure from foreign governments to close the accounts of Gemachim accounts, “in the name of ‘fighting terrorism’ and stopping money laundering, the IRS and the American government have become supervisors of all bank accounts around the world including in Israel. Everyone has to go through their inspection, so the Gemachim have received a letter that they will not be able to keep their bank accounts anymore.”

MK Eichler told Dr. Steiner: “I hope that the Bank of Israel find a way to abide by the agreements with the US while not mixing up the Gemachim with the war on terror. The banks must not become a burden and a restriction on associations and charity organizations who want to help people and do not engage in terrorism. There are limits to the madness of the banking system. We must not allow the charity organizations and Gemachim to be paralyzed by American pressures.”

The issues of compliance regarding money laundering and the war on terror stem from the side benefits of an IRS act that was intended to make sure US citizens who make money abroad share some of it with Uncle Sam. According to the IRS, FATCA targets tax non-compliance by US taxpayers with foreign accounts, focusing on individuals’ reporting about foreign financial accounts and offshore assets, as well as by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest.

Using the US’ enormous economic clout, FATCA bullies the world’s financial institutions into reporting on their American clients to Uncle Sam. Under FATCA, to avoid being withheld upon, foreign financial institutions must register with the IRS and agree to report to the IRS about their US accounts, including accounts of foreign entities with a substantial US ownership. Foreign institutions that enter into an agreement with the IRS to report on their account holders may be required to withhold 30% on certain payments to foreign payees if such payees do not comply with FATCA.

Talk about working for the Yankee dollar.

According to The Marker, Gemachim stand to suffer three different ways from the new law: instead of permitting a Gemach to transfer money into their accounts, they could now be questioned regarding the source of the funds and whether or not tax was paid on them in the US; each deposit could be subject to harassment by the bank, in order to verify that it is not part of a money laundering scheme; and the Gemach could be saddled with a new definition as a financial institution, and as such would be compelled to report on its fund sources to the IRS or face criminal sanctions.

JNi.Media

How Tax Laws Can Help in the Fight Against Terrorism

Monday, June 6th, 2016

American tax laws originally enacted to combat money laundering and terrorism adversely affect the millions of American citizens living abroad.

Colleen Graffy, a former United States Deputy Assistant Secretary of State for Public Diplomacy and Professor of International Law at Pepperdine University, explains why FATCA (Foreign Account Tax Compliance Act) restrictions are unfair to law-abiding U.S. expats. Did FATCA lower the value of U.S. citizenship?

Whether FATCA applies to you or not, you need to prepare for retirement. Consider whether dividend-paying stocks are appropriate for retirement savings. Find out more, and also how to download a free copy of The Retirement Planning Book, written by Douglas Goldstein CFP®, by listening to today’s show.

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Doug Goldstein, CFP®

Netanyahu, Kahlon Cut Taxes to Spur Sluggish Economy

Thursday, September 3rd, 2015

Prime Minister Binyamin Netanyahu and Finance Minister Moshe Kahlon announced Thursday they will cut the sales tax (VAT) by one percent and do the same with the corporate tax.

Beginning October 1, the VAT will drop from 18 percent to 17 percent.

The corporate tax will drop from 26.5 percent to 25 percent, starting in January 2016.

It is estimated that the two benefits to consumers will cost the state approximately NIS 6.5 billion ($1.6 billion).

Bank of Israel Governor Karnit Flug, who is not in favor of the plan, immediately announced her criticism of the move.

But in a joint news conference Thursday afternoon, Netanyahu and Kahlon told reporters the move was designed to act as a “growth engine” on an economy that is slowing down.

“We believe in you, we believe in the free market, we believe in freedom,” the prime minister said. “I think this will help growth. I think this will give the economy the boost it needs. At a time when we are hearing about global slowdown, and here too, we want a growth engine and lowering taxes is one of them.”

Hana Levi Julian

Gaza Area Israeli Farmers Meeting to Protest Immigration Authority Raids

Monday, July 20th, 2015

(JNi.media) Farmers in the “Gaza envelope,” a string of agricultural communities alongside the Gaza border, on Thursday (July 23) will hold a conference to protest increased raids by the Department of Immigration on their farms, and the increase in investigations of farmers.

The Conference to be held in Eshkol Regional Council, will formulate ways to engage the public in their plight while conducting legal battles against harassment by Immigration inspectors.

The farmer’s anger focuses mainly on increases of fines for any deviation from the terms of employment of foreign workers by hundreds of percentage points, reaching thousands of dollars per employee. The cumulative amount has reached hundreds of thousands of dollars per farmers who employ several workers, which could destroy their farms.

“Hamas rockets have failed to eliminate our farms, but the state’s fines may do it,” say the farmers.

Attorney Hagit Weinstock, representing the farmers, said that any investigation conducted by the authorities checks dozens of parameters relating to wages and conditions, and the fines of $10,000 is levied separately, so that a farmer employing several employees is exposed to paying a fortune in fines.

In addition to the increased fines, the state has undermines the right of Farmers to defend themselves. In the past, farmers could choose to make their case in court for hiring irregularities, but today the only avenue open to them is an appeal to an appellate committee at the Economy Ministry.

The conference will address ways in which farmers can cope with stricter enforcement, farmers’ rights against the investigators, the appeal process over fines, and how to prepare for inspectors’ visits with proper employment contracts and salary slips, to avoid penalties.

JNi.Media

IRS $50M Cyber Security Scandal Stretches to Russia

Thursday, May 28th, 2015

A major attack this year by cyber security criminals on the computer network at the U.S. Internal Revenue Service originated in Russia, sources confirmed to Fox News late Wednesday.

The Associated Press has also cited two anonymous sources who reported the IRS believes the hackers are part of a sophisticated criminal operation in Russia. Neither report connected the attack to the Russian government.

But both pointed out that this is not the first time that the IRS has been successfully breached by cyber thieves. Taxpayers whose accounts were accessed will be notified and provided with credit monitoring services, the IRS said.

The IRS inspector-general reported in 2012 hackers managed to manipulate the IRS system into sending 655 tax refunds to a single address in Lithuania. Another 343 tax refunds were sent to another address, this one in Shanghai. Following these attacks, system administrators tweaked the network safeguards to block other hackers.

This year’s attack began sometime in February, according to the report, and continued until mid-May. So far, the thieves have stolen at least $50 million in fraudulent tax refunds. That figure does not include the cost of tracking the breach, nor the expense involved in fixing it and preventing future attempts.

They used a software called “Get Transcript” to access the data. But in order to get into the records, the thieves first had to clear a security screen that required the use of taxpayer information such as a Social Security number, birth date, street address and tax filing number.

According to IRS Commissioner John Koskinen, the hackers used stolen Social Security numbers and other information to gain their access to taxpayers’ accounts. Then they used information from prior tax returns to file current fake returns seeking refunds.

“We’re confident these are not amateurs,” Koskinen told Fox News. “These actually are organized crime syndicates that not only we, but everybody in the financial industry are dealing with.” The IRS estimates that it paid out some %5.8 billion in 2013 to identity thieves, both foreign and domestic.

At least 104,000 taxpayer records dating back up to five years and perhaps more were stolen in the cyber heist, officials said.

The IRS notified the Department of Homeland Security following the breach, a federal law enforcement source said. The Senate Finance Committee has scheduled a June 2 hearing to question Koskinen and Treasury Inspector-General for Tax Administration J. Russell George on the issue.

“When the federal government fails to protect private and confidential taxpayer information, Congress must act,” Senate Finance Committee Chairman Orrin Hatch (R-UT) said Wednesday in setting the hearing.

Hana Levi Julian

US Orchestrated Anti-Bibi Bomb May Bite its Backers

Monday, March 16th, 2015

Remember Al Capone?

He was the notorious American gangster who met his downfall by the inelegant and unexciting – but sometimes deadly – U.S. tax code. So, too, may be the ultimate fate of the ubiquitous and well-funded Obama-style campaign machine gunning for Netanyahu, known as V15.

That entity and its creators are barred under US tax law from attempting to achieve its two stated goals: defeating Israeli Prime Minister Netanyahu and changing Israeli law in order to create a Palestinian State.

For some reason the fact that V15 is an avowed effort to oust Netanyahu did not raise enough eyebrows when it was first announced.

The lack of sustained attention back in January caused some to scratch their heads. That V15 was run by the same folks, and in the same style, as U.S. President Barack Obama’s notorious street theater, in your face, take no prisoners-style campaign director, Jeremy Bird; that its financial, emotional and political source received hundreds of thousands of dollars from the U.S. State Department; and even though that same source is an entity which has tax exempt status in the U.S. – which means it cannot fund projects to either support or defeat a political candidate in the U.S. or anywhere else, did not lead to a long media shelf life.

The first two issues should have drawn attention to V15 not because political operatives are barred from selling their strategic skills – that is, after all, the nature of their job – but because it was so odd for someone like Bird to come all the way to Israel to sell his skills. Bird is not Jewish, and his only apparent connection to Israel was working for an anti-Israel American radical activist back in his graduate days.

But who was paying for Bird? Campaign funding is very strictly regulated in Israel. The strategist who managed Obama’s two U.S. presidential campaigns – in which billions of dollars were spent – was likely to have a very high price tag.

Then there was the matter of the U.S. State Department grants to OneVoice, V15’s “creator.” The airy dismissal that all State Department funding ended at the end of November, so there was no U.S. government money being used for the election — which was publicly announced in early December — was, incredibly, accepted without any further interrogation by the American (and most of the Israeli) press corps. Former Naval Intelligence officer J.E. Dyer  pursues that angle with the kind of tenacity one should be able to expect from the seasoned press corps members who show up nearly every day at State Dept. briefings.

But the least interesting angle, at least to most, is the one that involves the Internal Revenue Service. Before your eyes glaze over, recall that the U.S. actually had what could almost be called a juicy scandal beginning nearly two years ago, that involved the IRS.

Quite a few politically conservative (and one pro-Israel) organizations claimed that the IRS was treating their applications for tax-exempt status in a discriminatory fashion. The initial response from the IRS was that many of those groups were not really entitled to tax-exempt status, because they were engaged in political, not educational or charitable, work.

That seemed to many like a reasonable response. The Internal Revenue Code states that even a non-profit organization cannot be exempt from paying taxes, and its donors will not be entitled to tax deductions, if the organization is involved in politics or lobbying.

But while much of the IRSGate attention has since focused on where are Lois Lerner’s emails and whether they are really gone forever or just deleted, hidden or irrelevant, the fact that tax-exempt organizations cannot engage in raw politics seemed to be one tiny aspect of American government that many people learned.

Lori Lowenthal Marcus

Tax Authorities Raid Lulav and Etrog Street Vendors

Tuesday, September 17th, 2013

Israeli tax official surprised hundreds of Lulav and Etrog vendors around the country on Monday when they began a secret operation to determine if the sellers were reporting their sales, providing receipts, and paying taxes on revenues from their booths.

Vendors report that they don’t remember a raid like this ever happening before.

Lulav and Etrog sales are primarily a cash business, and they are sold by vendors, often teenagers, who set up tables and booths on streets throughout Israel before the Sukkot holiday. The business itself is more complicated with a group importers and distribution centers providing the majority of the temporary street vendors with their products.

Sukkot’s Lulav and Etrog sales is a multi-millions dollar industry.

Jewish Press News Briefs

Printed from: http://www.jewishpress.com/news/breaking-news/tax-authorities-surprise-lulav-and-etrog-street-vendors/2013/09/17/

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