Bio-Nucleonics, Inc., a leading Florida company specializing in radiopharmaceuticals, medical devices and imaging agents, gave a hearty “Thanks” to Fuerst Ittleman in its most recent issue of BioBulletin, the company’s newsletter.

Fuerst Ittleman recently assisted Bio-Nucleonics with gaining FDA approval for the company’s new Doral, Florida product manufacturing facility. The FDA’s approval certifies that Bio-Nucleonics uses “current Good Manufacturing Practice” (cGMP) in all its production at this state-of-the art facility.

The FDA also gave approval to Bio-Nucleonics for its proposed release criteria and timeframes for specific lot release tests to be completed prior to shipment of finished drug products. The importance of this ruling is that no material is lost to radioactive decay and each dose can be shipped immediately to the customer.

FHI assisted Bio-Nucleonics with both of these efforts. We found it such a pleasure to work with clients who were as knowledgeable, dedicated, and thorough as the team at Bio-Nucleonics, and we’re glad that they liked working with us, too. To see the entire BioBulletin newsletter, click here.

Let Fuerst Ittleman help guide your company to its next success. For more information, contact us today at 305.350.5690 or contact@fuerstlaw.com

Original Article: Mitchell S. Fuerst: Foreign Bank Accounts and the IRS [pdf]

Voluntary Disclosure Guidelines Give Taxpayers Until September 23rd to Reveal Offshore Assets

According to a statement on Offshore Income given by IRS Commissioner Doug Shulman, U.S. Taxpayers and entities that are currently hiding assets in offshore accounts have a limited voluntary disclosure period until September 23rd , of 2009 to reveal those accounts before the IRS takes the offensive. After the voluntary disclosure period, the IRS plans to aggressively pursue both civil and criminal penalties for taxpayers that fail to take advantage of the voluntary disclosure initiative. Furthermore, the IRS revealed that they are actively tracking entities and individuals attempting to clean up their act through “quiet disclosures,” the practice of Taxpayers declaring a prior increase of income through amended tax returns.

The IRS stated, “Those taxpayers making ‘quiet’ disclosures should be aware of the risk of being examined and potentially criminally prosecuted for all applicable years.”

It seems that the IRS has decided to take an aggressive position here. In a statement given by the IRS regarding the penalties for the 52,000 holders of undeclared UBS bank accounts, the IRS only mentioned a “reduction of penalties,” for those that took advantage of the voluntary disclosure practice.

Under the new IRS guidance, the quiet disclosure practice is no longer a safe measure to make amends to the IRS. President Obama recently mentioned the appointment of congressional authority to hire an additional 800 IRS agents assigned to track down and pursue illegal tax evasion and the use of undeclared offshore accounts. Though it is legal for Americans to have offshore accounts, the U.S. Treasury Department requires any account containing more than $10,000 to report the existence of the account, and taxes paid on the income as well.

Four primary orthopedic implant companies that have been accused of violations to the federal anti-kickback laws are no longer the subject of the U.S. Attorney’s office’s federal oversight and have also been dismissed from criminal allegations that surgeons had received enormous sums of money as incentives to use their devices.

To avoid prosecution, the companies had agreed to accepting rigorous regulatory compliance procedures and a monitoring program by the federal government. Those agreements drew a great deal of criticism to U.S. Attorney Christopher Christie, when it was revealed that the former Attorney General, John Ashcroft, was appointed by Christie to a monitoring program contract estimated to be worth up to $52 million. Christie, the Republican gubernatorial nominee hopeful, faced some tough questions about his relationship to, and the appointment of federal monitoring program supervisor – former federal Judge Herbert J. Stern. Judge Stern and his law firm were responsible for contributions of more than $20,000 to Christie’s campaign fund.

When asked about the current relationship in light of the circumstances, Christie simply dismissed the matter as, “typical political stuff …”

After federal prosecutors discovered incidents where orthopedic surgeons had received consultation fees upwards of $200,000 a year for the promotion of products from orthopedic implant companies, the U.S. Attorney’s office pursued formal criminal charges alleging the actions were a violation of federal anti-kickback laws that govern Medicare provisioned hospitals and healthcare professionals.

According to the federal prosecutors, the medical device companies were using the consulting agreements as a cover-up for payoffs to use specific implant products for artificial hip or knee replacement operations. Furthermore, the U.S. Attorney’s office claim that these payments and fees are commonplace in the industry and may also be accompanied by luxurious gifts, and extravagant trips.

The investigators found evidence that the physicians had actually performed very little to no consulting work whatsoever and had received funds from the orthopedic companies solely for the use of their products, and failed to keep accurate reports disclosing their relationship with the medical device companies to the patients that received the surgery or the hospitals where the surgeries were performed.

Biomet Orthopedics Inc., Zimmer Inc., Smith & Nephew Inc., and DePuy Orthopeadics Inc., agreed to paying $311 million in a civil settlement agreement and accepted a deferred prosecution agreement which would expire should the companies agree to an extended monitoring program and implement stringent reforms.

The appointee to the monitoring of Zimmer Inc., was John Ashcroft. Zimmer Inc., was not willing to disclose the amount that was paid to Ashcroft’s law firm. However, according to the firm’s spokesperson, the payments were around $6 to $9 million dollars a quarter.

Madoff Ponzi Scheme Victims may be able to receive tax relief and refunds by the new IRS guidelines.

Douglas Shulman, Commissioner of the IRS, announced to Congress that the relief is intended for those who incurred losses by Ponzi Schemes such as the one at issue in the Madoff Ponzi Scandal.

If Madoff investors reported and paid taxes on the earnings from their Madoff investment, they may be due a refund on those taxes because the profits reported were never actually realized.

At a Senate Finance Committee hearing, Shulman stated that the investors in some of the cases were actually entitled to a theft loss deduction which is not subject to limits placed on traditional capital losses.

Mr. Shulman continued to state that theft loss deductions may be taken for the year in which the fraud was discovered, except when the investor may have a “reasonable prospect” in recovering the capital loss.

Shulman went on to say that identifying the actual amounts and times of the losses from Ponzi schemes may be “factually difficult” and could take a considerable amount of time to identify the prospects of the lost money.

Shulman, in his testimony to the Senate, continued:

“Some taxpayers have argued that they should be permitted to amend tax returns for years prior to the discovery of the theft to exclude the phantom income and receive a refund of tax in those years … The new IRS guidelines do not address that argument.”

From the time that the Madoff scandal was made public, roughly $1 billion in assets have been identified for Madoff’s victims. That figure, however, is only a fraction of the $65 billion that Madoff claimed he had possession of. Some have estimated that the Madoff Ponzi Scheme may have cost the IRS as much as $17 billion in lost tax revenues from investors that had earned fictitious profits.

Securities Investor Protection Corp., an organization that backs failed brokerage firms, has already started sending out checks to the victims of the Madoff Ponzi Scheme. Madoff’s victims are eligible for up to $500,000 up until July of 09’ from the SIPC. Furthermore, Mr. Shulman stated that investors should be aware that they need to deduct the amount they receive from the SIPC from their Madoff investment based “theft loss” deduction.

According to Shulman, the financial statements which were provided to Madoff Ponzi Scheme investors, should be sufficient documentation enough to establish losses for filing tax claims.

Do you need to speak with an attorney about IRS tax relief?
Contact us for a consultation about fraud-related tax losses.

On January 12, 2009, the Interagency Working Group on Import Safety published draft guidance for industry entitled “Good Importer Practices.” The working group is comprised of the U. S. Departments of Health and Human Services (Food and Drug Administration), Agriculture, Commerce, Homeland Security, and Transportation and the U.S. Consumer Product Safety Commission, the U.S. Environmental Protection Agency, and the Office of the U.S. Trade Representative.

The Working Group organized the guidance into four broad “guiding principles”:

- establishing a product safety management program;
- knowing the product and applicable U.S. requirements;
- verifying product and firm compliance (throughout supply chain and life cycle); and
- taking corrective and preventive action (when necessary).

These principles give importers a roadmap they can follow to ensure that the products they import, and the processes they use to import those products, comply with myriad U.S. statutes and regulations. While the document is not a “how to” guide – with steps that match up to specific code citations – the guidance is an indispensible tool for management, which they can use to make sure that they are asking the right questions, and establishing the right programs and processes, for regulatory compliance.

The draft guidance encourages importers to focus on the life cycle of an imported product; for example, from growing and harvesting, to processing, packing, transporting, and distributing. At each step, importers should consider how to implement controls to help decrease the risk that the product could cause harm to people, animals, or the environment. In doing so, importers will help ensure overall regulatory compliance.

The guidance is also important for third-parties in the import process, such as consolidators, shippers, brokers and distributors. In the current regulatory environment, in which the government is focusing on everyone’s role in the security and safety of imports (and penalizing those who break the rules), even these third-parties should have processes in place to make sure that the importers with whom they work are complying with government rules and regulations.

Following this guidance laid out by the government is essential for all U.S. importers. If you don’t follow the roadmap, you may soon be lost.

The complete “Draft Guidance for Industry Good Importer Practices” can be found here.

Let Fuerst Ittleman help you with your roadmap for regulatory compliance. Our attorneys have years of experience in designing programs, policies and procedures to help importers stay on the right path and avoid problems with regulators. Contact us at 305-350-5690 or contact@fuerstlaw.com.