Fowler White Corporate eNews

Foreign Assets: New IRS Disclosure Requirements


Richard Jacobson	Mitch Horowitz	Jason Liu

It’s certainly legal to have foreign bank accounts and other investments outside the US. In some cases, it’s expected: as in the case of foreign families moving to the United States or US persons doing business overseas. But beginning in 2012, the Foreign Account Tax Compliance Act (FATCA) requires US taxpayers to disclose certain foreign assets with an aggregate value exceeding $50,000. For married individuals filing jointly, this threshold increases to $100,000 on the last day of the year or $150,000 at any time during the year. Higher thresholds apply to individuals residing outside the US. See IRS Form 8938 (currently in draft). This is in addition to Form 8621 which requires information from US shareholders of passive foreign investment companies (PFIC). Both these Forms are filed with a taxpayer’s income tax return and are in addition to the Report of Foreign Bank and Financial Accounts (FBAR) filed with Treasury. For more information contact Richard Jacobson (813-222-1150, jacobson@fowlerwhite.com), Mitch Horowitz (813-222-1105, mhorowitz@fowlerwhite.com) or Jason Liu (813-222-1163, jason.liu@fowlerwhite.com).

Administrative Order Impacting Foreclosure Litigation


Donald Kirk	Tirso Carreja	Thomas Seider

In the Twelfth Judicial Circuit for Sarasota, Desoto, and Manatee County, a recent administrative order (Administrative Order 2012-3.1) has established a new procedure requiring that two “circuit liaisons” be appointed by any plaintiff having filed five or more foreclosure actions in the circuit. One circuit liaison must be an attorney, and the other a representative of the entity servicing the plaintiff’s mortgages, if any, and, if none, a representative of the plaintiff. Plaintiff’s counsel must provide a written notice of the name, phone number (including extension), email, and mailing address of both liaisons. A plaintiff’s liaisons are expected to act as the court’s point of contact for all pending foreclosure cases, and must be “capable of answering questions concerning the administrative status of pending cases and the party’s internal procedures relating to the processing of foreclosure cases, and be readily accessible to discuss administrative and logistical issues affecting the progress of the plaintiffs cases through courts of the Twelfth Circuit.” The Administrative Order went into effect January 21, 2012. For more information, please contact Donald Kirk, Tirso Carreja, or Thomas Seider.

Companies Concerned Over SEC Request to Disclose Cyberattacks

Deluged by cyberattacks they've mostly hidden from the public, companies in Silicon Valley and elsewhere are being prodded by federal regulators to finally fess up to this fast-growing threat to their businesses and their customers. Corporate hacking costs companies and consumers billions of dollars a year, experts say, and has ensnared corporations ranging from online shoe retailer Zappos.com to valley tech giant Google, but before these new rules from the Securities and Exchange Commission, the full extent of the problem has been unknown, since big businesses are loath to provide many if any details, fearing embarrassment and concerned about adding to the harm.
Read full story at SiliconValley.com (free reg. req'd).

Advisory Firm Faces FBI Probe Over Chinese Reverse Mergers

The Federal Bureau of Investigation searched the offices of a New York-based corporate advisory firm that specializes in helping Chinese companies sell shares in the United States. The firm, the New York Global Group, is known for helping take midsize Chinese companies public in the United States through reverse mergers, or by buying the shell of defunct American companies that had been publicly listed -- a controversial practice that has come under regulatory scrutiny in recent months.
Read full story at The New York Times.

EU to Propose Stringent New Data-Protection Rules

The European Union will propose tough new rules in the coming days on how corporations handle Internet users' personal data, a long-awaited move that could have far-reaching implications for Web giants such as Google and Facebook. Viviane Reding, vice president of the European Commission, said in a speech that the new data-protection legislation was needed to protect users and cut red tape for businesses in Europe.
Read full story at Reuters.

Obama Unveils New Securities Fraud Law Enforcement Group

A new law enforcement group examining securities fraud from the housing bubble and financial crisis has already issued civil subpoenas to 11 financial companies for information related to their actions in the market for residential mortgage-backed securities, Attorney General Eric H. Holder Jr. said. President Obama announced the new group in his State of the Union address, saying it would "hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."
Read full story at The New York Times.

Buyout Professionals Express Cautious Optimism for 2012

Buyout professionals who weathered the financial ups and downs of 2011 are somewhat hopeful markets will improve for the industry but conceded 2012 will be a difficult year. Christopher Stadler, a U.S.-based managing partner of CVC Capital Partners, was optimistic about the U.S. economy because of the "resilience shown in the back half of [2011]," he said during the Dow Jones Private Equity Analyst Outlook conference in New York.
Read full story at The Wall Street Journal.

Private Equity Industry Expected to See Increased SEC Scrutiny

Since 2000, the SEC has brought only a dozen cases to trial against private equity firms compared to 50 cases against hedge funds just in 2011, according to the agency. Expect that to change, said Robert Kaplan, co-head of the asset management division in the SEC's Division of Enforcement.
Read full story at CNNMoney.com.

Departing SEC Inspector General's Criticism Could Impact Agency

In his final act before departing the U.S. Securities and Exchange Commission, the agency's inspector general, David Kotz, criticized how the agency analyses the economic impact of some of its Dodd-Frank rules. Kotz's criticism, contained in a report, could have ramifications for the SEC, which has lost several court battles over the years because of flaws in how it demonstrates that the benefits of a rule outweigh its costs.
Read full story at Business Recorder.

Start-Ups Receiving Major Capital from Angel Investors

Angel investors -- wealthy individuals who provide capital to start-ups with the potential for fast growth -- are an increasingly important source of capital to early stage companies, including in Europe, one recent report says. Calculations by the Organization of Economic Cooperation and Development suggest that the total amount of capital raised from angel investors in the U.S. was $17.7 billion in 2009, compared to $18.7 billion for venture capital.
Read full story at The Wall Street Journal.

Wealthy Americans Pouring Funds into Small Companies

It's not unusual for America's wealthiest individuals to invest through angel groups or sit on boards at venture capital firms. But these days the superrich also want to own and operate small companies where their deep pockets and powerful networks can create growth, says Mindy Rosenthal, executive director of the Institute for Private Investors in New York, whose membership consists of 1,100 investors, each with minimum investible assets of $30 million.
Read full story at Bloomberg Businessweek.

Accuracy of Companies' Tax Disclosures Questioned

What are they hiding? If companies continue to boost their reported earnings without describing their tax-planning strategies, investors and accounting standards-setters may start asking that question.
Read full story at CFO.com.

More CEOs Joined Ranks of $50 Million-Plus Earners in 2011

2011 is shaping up as the year of the $50 million-plus CEO. Huge employment contracts, retention deals, stock-option gains, bonuses and golden parachutes are creating big windfalls for incoming executives, current CEOs and even those on their way out, according to a USA TODAY analysis of company filings with the Securities and Exchange Commission.
Read full story at USA Today (free reg. req'd).