United States: Curing Non-Compliance: Practical Factors to Consider in the United States - Part 1

Last Updated: November 13 2008
Article by Michael G. Pfeifer

Introduction

A. Root of the Problem: Tax Law Complexity

The rules that govern a taxpayer's obligation to file a tax return and pay taxes in the United States – principally the U.S. Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury regulations and administrative practices and procedures thereunder1 – are exceedingly complex. For the individual income tax return, the most widely filed return,2 taxpayers and their representatives, including commercial tax preparation services, tax accountants and lawyers, annually spend enormous amounts of time collecting and compiling relevant financial information and determining how best to complete the return.3 In addition, taxpayers and their representatives must determine which of a multitude of supporting schedules and tax information returns should be filed along with, or in addition to, the tax return.

There are a number of commercially available computer software programs to assist U.S. taxpayers with their tax returns.4 Owing to the complexity of the tax laws, even professional tax preparers use computer programs (generally more sophisticated than those sold at retail) to assist taxpayers. However, even that doesn't always ensure that a tax return is completed correctly or filed timely. This is particularly true for U.S. taxpayers with income or assets outside the United States and foreign persons with U.S. income, assets or other connections. Even in an increasingly "global" economy, it probably is the case that many, if not most, professional tax advisors do not frequently see – and, therefore, are not thoroughly familiar with – many of the complex issues that can arise for U.S. taxpayers with foreign income and assets and foreign persons with U.S. income, assets and other connections. This is certainly true of the more exotic and arcane areas of, e.g., foreign trusts, "controlled foreign corporations" and "passive foreign investment companies."

b. Dealing with "Unforeseen Circumstances"

As if the complexity of the Code's foreign tax provisions were not enough, taxpayers and their tax advisers are often faced with wholly unforeseen – and oftentimes "murky" – circumstances. These might range from the relatively innocuous receipt of a large foreign gift or bequest from a remote foreign relative to the more complex and troublesome inheritance of substantial foreign assets – previously unknown and of questionable origin – from a U.S. parent.

Dealing with such unforeseen circumstances can raise a host of questions and potentially complex tax issues for a U.S. tax practitioner. He generally will know who his client is (although even this can "shift" as he familiarizes himself with the circumstances). However, he must determine whether, and to what extent, his client is a potential taxpayer in connection with the circumstances. This will, of course, vary with the circumstances. Were the circumstances and the attendant tax issues completely unforeseen, or did the client have some knowledge of the circumstances? What was the level of the client's knowledge, and when and how did he acquire it? In particular, did the client have some responsibility in creating the circumstances giving rise to the potential tax issues?

As with any client matter, the U.S. practitioner has to gather the facts relevant to the determination and resolution of his client's potential tax issues, but he may have to go beyond the usual scope of such information-gathering to understand all of the surrounding circumstances, which may include facts remote in time and place from his client but that may have an indirect and substantial effect on the client's ultimate U.S. tax liability. How and when did the client's "unforeseen circumstances" come to exist? In particular, who put them in motion and with what? Frequently, events of which a client had no previous knowledge and for which he had no responsibility will dictate or, at least, influence the strategy that a U.S. practitioner employs to protect his client from unfortunate U.S. tax consequences. 

In determining how best to handle his client's situation, a U.S. tax practitioner has to be aware of a multitude of legal and ethical standards. What are client's obligations as a U.S. taxpayer to file a tax return? What are client's potential tax liabilities? What are the limitations periods applicable to the client's circumstances and issues? All of these factors may be affected by the client's knowledge and potential responsibility for the circumstances. A U.S. tax practitioner must also be aware of his own legal and ethical issues relating to his client's unforeseen circumstances and the issues arising therefrom. Does he have any potential liabilities?

Ultimately, a U.S. tax practitioner must devise a strategy to deal with, and hopefully resolve, his client's issues in the most tax-efficient manner possible (which might not always result in the client paying the lowest taxes possible). This might range from recommending that the client take relatively simple compliance steps to correct any prior tax "mis-steps." Or the practitioner might recommend that the client undertake "voluntary disclosure," which might be approached in different ways depending upon the potential seriousness of the client's tax issues and potential liability.

The balance of this paper will examine some of the principal legal and ethical considerations of which a U.S. tax practitioner must be aware in handling tax issues generally, and particularly in handling certain complex and frequently "unforeseen" cross-border U.S. tax issues for individual clients. Because of the nature of some of the considerations, it is fair to say that this undertaking frequently is more of an "art" than a "science." 

Taxpayer Obligations and Liability

A. Taxation and Reporting of Income

The United States generally imposes an income tax filing requirement on all U.S. persons and certain foreign persons, including foreign entities with certain U.S. nexus. For all U.S. tax purposes, the Code defines a "U.S. person" to mean a citizen or resident of the United States, a domestic partnership, a domestic corporation, any estate other than a foreign estate and domestic trusts.5 Unlike many countries in the world, the United States levies its income tax on its citizens and residents on a worldwide basis, regardless of where they live.6 Therefore, a U.S. citizen residing overseas remains liable for U.S. income tax and reporting at all times.7

For U.S. income tax purposes, an individual is a "resident" of the United States if he either is a "lawful permanent resident" (i.e., a U.S. "green card" holder) or satisfies a "substantial presence test."8 A trust is "domestic" only if (i) a court within the United States is able to exercise "primary supervision" over the administration of the trust, and (ii) one or more U.S. persons has the authority to control all "substantial decisions" of the trust.9 A trust which satisfies both requirements is generally treated as a U.S. person for U.S. federal income tax purposes; a trust not meeting both tests is treated as a foreign person.10 A corporation or partnership is generally treated as a U.S. person if it is created or organized in the United States or under the laws of the United States or any State thereof.11

1. U.S. Persons

Section 6012 contains the requirements for when an individual or entity is required to file a U.S. federal income tax return. An income tax return is generally required to be filed annually following the close of a taxpayer's "taxable year." The taxable year of individuals and trusts generally is the calendar year.12 Corporations and other business entities generally can use a "fiscal year" other than the calendar year.13 U.S. individuals generally file their returns on Form 1040; U.S. corporations on Form 1120; U.S. partnerships on Form 1065; and domestic trusts on Form 1041.

Further, U.S. persons generally are required to provide information regarding their interests in or transactions with certain foreign entities during the year, including controlled foreign corporations (Form 5471), passive foreign investment companies (Form 8621), foreign disregarded entities (Form 8858), controlled foreign partnerships (Form 8865), and certain foreign trusts (Form 3520). Moreover, U.S. persons are generally required to file a gift tax return on Form 709 to report any gifts they make during the year in excess of the annual exclusion amount.14 They are also required to file a return on Form 3520 to report the receipt of certain large foreign gifts or bequests.15

In addition, each U.S. person having a financial interest in, or signature or other authority over, any foreign financial account with an aggregate value exceeding $10,000 at any time during the calendar year must annually report such account by filing Form TD F 90-22.1, "Report of Foreign Bank and Financial Accounts" ("FBAR"). The existence of such foreign accounts also must be identified on Schedule B of Form 1040 and, of course, the income from such accounts must be included on the U.S. person's income tax return.

2. Foreign Persons

In contrast to U.S. persons subject to worldwide taxation and reporting, foreign persons are subject to U.S. income tax only on certain "fixed or determinable annual or periodic gains, profits and income" ("FDAPI") from U.S. sources16 and income that is "effectively connected" with a U.S. trade or business for the year ("effectively connected income" or "ECI").17 To report U.S.-source FDAPI and/or effectively connected income, foreign individuals (including foreign trusts) are generally required to file a Form 1040NR,18 and foreign corporations are generally required to annually file a Form 1120-F.

3. Foreign Trusts

A foreign trust that is not treated as "owned" by its grantor (i.e., a foreign nongrantor trust) generally is treated as a separate taxpayer and taxed as a foreign individual.19 Therefore, such a trust must file a Form 1040NR (modifying the form, as necessary, to conform to the trust accounting rules) to report its U.S.-source FDAPI and ECI, if any.20 A foreign grantor trust generally also files a Form 1040NR, but attaches a statement indicating that the trust is a grantor trust and that all income, therefore, is taxable to the grantor and reportable on the grantor's Form 1040NR or Form 1040, whichever the case may be.

In addition, the Code imposes certain information reporting requirements on U.S. grantors and beneficiaries of foreign trusts, including the reporting of (i) the creation of, or transfer of property to, a foreign trust (i.e., the U.S. transferor must notify the IRS of the transfer and provide the IRS with the identify of the trustees and beneficiaries),21 (ii) ownership of a foreign grantor trust, and (iii) the receipt of a distribution of property from a foreign trust. Reporting is also required for any testamentary transfer of property to a foreign trust, as well as the death of a U.S. citizen or resident who was considered to own any portion of a foreign trust or in whose estate are included a foreign trust's assets.22 In the case of testamentary transfers and the death of a U.S. owner of a foreign trust, notice must be furnished by the decedent's executor.23

B. Limitations Periods

In general, a limitations period (or statute of limitations) imposes a stated period of time during which civil or criminal proceedings against a person must be initiated. A person generally is immune to the prosecution of a civil or criminal claim once the period of limitations has expired. In the context of tax law, periods of limitations generally serve as a legislative restraint on the Government's power to audit tax returns and initiate civil or criminal proceedings against a taxpayer with regard to a particular tax liability.24

1. Civil Proceedings

The IRS generally has three years from the date of the filing of an original return to audit the return and to assess any additional tax liabilities.25 The period of limitation is extended to six years in the case of a substantial under-reporting of income (i.e., a taxpayer fails to report more than 25% of the income shown on the return).26 There is generally no limit for auditing and collecting taxes where a taxpayer files a false or fraudulent return.27 However, the statute of limitations for initiating criminal proceedings generally is limited to six years. Since the period of limitations is measured from the date of the filing of the original tax return, neither the 3-year nor 6-year statute of limitations is applicable where a taxpayer has not filed a return.28 Thus, a taxpayer sometimes is well-advised to file a return to start the applicable limitations period running.

Information returns (e.g., Forms 3520, 5471, 8621, 8865) are generally subject to the same periods of limitations. Note, however, that a rule applicable to extending the applicable limitations period for certain information returns (including Forms 3520 and 5471) relating to foreign transfers can also have the effect of extending the applicable limitations period for any assessment of tax for any event or period to which the information appearing in the information return relates.29

2. Criminal Proceedings

The Code provides a 6-year limitations period for most criminal violations of the tax laws, including the following:

  • Those Code sections in which defrauding or attempting to defraud the United States is an element of the offense;
  • Willfully attempting in any manner to evade or defeat any tax or the payment thereof;30
  • Willfully failing to collect or pay over tax;31
  • Willfully aiding, assisting, counseling, procuring or advising the preparation or presentation of a false return or other document;32
  • Willfully failing to timely pay any tax or make any return (other than declaration of estimated tax, partnership returns or other information returns);33
  • Willfully making and subscribing a false return under penalty of perjury;34
  • Willfully delivering or disclosing to the IRS a fraudulent return, statement or other document;35
  • Corruptly or forcibly attempting to interfere with the administration of the Internal Revenue laws;36 and
  • Conspiracy in connection with an attempt to defeat or evade any tax or the payment thereof.37

C. Obligation to File Amended Returns

Generally, all income tax returns and information returns are signed by a taxpayer under penalties of perjury. Thus, a taxpayer, by signing Form 1040, effectively certifies under penalties of perjury that he has examined the return and its accompanying schedules and statements, and, to the best of his knowledge, all of the information contained therein is true, correct and complete.38

Nothing contained in the Code or regulations expressly requires a taxpayer to file an amended return to reflect changes in facts or circumstances that have arisen since the filing of the original return or that were originally different than the taxpayer believed them to be.

Taxpayer Liability for Actions of Other Taxpayers

A. Spouses—Joint Tax Returns

Married couples often choose to file a joint tax return because of certain benefits this filing status allows. In general, both taxpayers filing a joint tax return are jointly and severally liable for the tax and any interest or penalties due on the joint return. This means that one spouse may be held responsible for all the tax, interest and penalties due, even if all the income was earned by the other spouse. This joint and several liability remains intact even if the couple later divorces.39

However, a taxpayer may seek relief from this liability by requesting "innocent spouse relief" from the IRS by filing Form 8857. By requesting innocent spouse relief, a taxpayer may be relieved of responsibility for paying tax, interest, and penalties if his or her spouse (or former spouse) improperly reported items or omitted items on their joint ax return.

B. Transferee Liability

Section 6901(a)(1)(A) allows the IRS to assess a tax liability against any third party that is a gratuitous "transferee of property" from a taxpayer liable for an unpaid income tax. This "transferee liability" arises when a taxpayer who is liable for taxes (whether that liability has been assessed or not) transfers assets to a third party without receiving fair market value consideration. In such a case, section 6901(c)(1) gives the IRS an additional one year from the end of the limitation period against the original transferor-taxpayer to assess the transferee liability against that third party (i.e., the transferee). Note that section 6901 applies to beneficiaries of a decedent's estate.40

Since transferee liability is based on the liability of the original taxpayer, it is not necessary for the IRS to assess the liability against the original taxpayer before assessing it against the transferee.41 However, if the transfer occurs after the end of the statute of limitations against the original taxpayer, and the IRS has not made a timely assessment against the original taxpayer, the IRS cannot then assess the liability on the transferee.42 That is, once the original statute of limitations has expired against the transferor, a taxpayer's liability is eliminated for all practical purposes.

Practitioner Obligations and Potential Liabilities

A. Attorney-Client and Work Product Privileges

The attorney-client privilege is a Common Law doctrine protecting the confidentiality of communications between attorneys and their clients. The attorney-client privilege is intended to promote open and honest communications between attorneys and their clients, thereby serving the greater public interest of compliance and administration of law.43

The attorney-client privilege generally prohibits an attorney from disclosing information relating to the representation of a client, unless the client gives informed consent or disclosure is otherwise required or permitted.44 The specific elements and limitations of the privilege are generally defined by the courts and ethics committees of State bars. Accordingly, the scope of the privilege can vary from one jurisdiction to the next, and practitioners must understand the privilege as it applies in the jurisdiction in which they practice. Difficulties can arise where an attorney is subject to the differing rules of several jurisdictions in connection with the same client or transaction (e.g., a U.S. lawyer practicing in London as a foreign lawyer). In such a case, a client is likely to be entitled only to the protection of the privilege having the more limited scope.

Where applicable, the attorney-client privilege is absolute and affords complete protection to communications between attorneys and clients. It preserves the confidentiality of the information in all contexts, criminal, civil or otherwise. Because of its extensive application, the attorney-client privilege is narrowly construed to apply only to confidential disclosures by a client to an attorney made in order to obtain legal assistance.45 In particular, in order to assert a claim of attorney-client privilege, several U.S.-based courts have held that the following essential elements must be present: (i) when legal advice is sought, (ii) from a professional legal adviser in his capacity as such, (iii) the communications relating to that purpose, (iv) made in confidence, (v) by the client, (vi) are at his instance permanently protected, (vii) from disclosures by himself or by the legal adviser, (viii) except when the privilege is waived.46

Since the attorney-client privilege is intended to protect only those communications by a client to an attorney that were intended to be confidential, the privilege generally will not protect from disclosure statements made by a client to his attorney in the presence of a third party who is not an agent of either the client or attorney.47 Thus, in the event that a client discloses information in the presence of a third party, the attorney-client privilege generally is considered waived. In addition, the person invoking the attorney-client privilege must prove that he is a client or that he affirmatively sought to become a client (i.e., the privilege belongs to the client).48 Communications from a client that neither reflect the attorney's thinking nor are made for the purpose of eliciting the attorney's professional advice or other legal assistance are not privileged. Further, an attorney may be permitted to disclose confidential information to prevent death or substantial bodily harm or to prevent the client from committing a crime or fraud, among other reasons.49

In addition to the attorney-client privilege, the "work product" privilege may apply to protect the confidence of communications between attorneys and clients.50 Unlike the attorney-client privilege, however, the work product privilege is not an absolute privilege and can be overcome by a court of competent jurisdiction. In particular, although the work product privilege generally applies to protect confidential information between attorneys and clients, if the opposing party (e.g., the IRS or Department of Justice) can show a compelling need for the information, a court can order the information to be disclosed.51 The work product privilege generally applies if the work is performed in anticipation of litigation (i.e., possibility of litigation, rather than certainty of litigation).

Footnotes

1. Unless otherwise noted, all section references herein are to the Code and the regulations thereunder.

2. For 2005, the most recent year for which complete information is available, U.S. taxpayers filed 134,372,678 individual income tax returns on Form 1040 (including Forms 1040A and 1040EZ and electronic returns). IRS Statistics of Income Bulletin, available at www.irs.gov/taxstats.

3. The Government is obliged to furnish an estimate of the time required to prepare tax and information returns. The instructions to the 2007 Form 1040, the return filed by most (the instructions say 69%) U.S. citizens and residents, estimate that an average of 33.5 hours is normally required to collect, compile and analyze the information necessary to complete and file the form (at an average cost of $267!). The instructions to the 2007 Form 1040NR, the basic income tax return filed by nonresident alien individuals and foreign trusts, estimate an average time of 29.5 hours (at an average cost of $204!).

4. TurboTax,© produced by Intuit, Inc., and TaxCut,© produced by H&R Block,® are probably the leading brands available commercially, each promising the "maximum" refund available. In addition, the instructions to Form 1040 indicate that, if an individual has 2007 adjusted gross income of $54,000 or less, he is eligible to use Free File, a service offered by the Internal Revenue Service ("IRS") in partnership with the Free File Alliance, a group of tax preparation software companies.

5. § 7701(a)(30).

6. Treas. Reg. § 1.1-1(b). Many countries tax their "residents" on worldwide income; indeed, "residence" is likely the international standard for taxing worldwide income. However, only a handful of countries tax their citizens and nationals on worldwide income.

7. U.S. citizens also are taxable on their worldwide property transfers under the gift, estate and generation-skipping transfer tax regimes. However, such transfer taxes generally are beyond the scope of this paper, which will focus principally on income tax issues.

8. Treas. Reg. § 1.1-1(a)(1). The "substantial presence test" measures the weighted average of days an alien is physically present in the United States over a three calendar year period. Specifically, if an individual is present in the United States for at least 31 days in the current year and the weighted average for the three year period totals 183 days or more, he generally will be treated as a U.S. resident as of the first day in the current year he is physically present in the United States. § 7701(b)(2)(A)(iii); Treas. Reg. § 301.7701(b)-4(a). The formula counts days present in the current year at full value, days present in the immediately preceding year at 1/3 value, and days present in the second preceding year at 1/6 value.

9. § 7701(a)(30)(E).

10. § 7701(a)(31).

11. § 7701(a)(4).

12. §§ 441(b), 644(a). 

13. § 641(b), (e). However, § 898(c) generally requires a controlled foreign corporation ("CFC") to have the same taxable year as its U.S. majority shareholder (i.e., U.S. person who owns more than 50% of the voting power or value of the corporation). The CFC can make an election to start its taxable year one month earlier than the taxable year of its U.S. majority shareholder. § 898(c)(1)(B). A foreign corporation is treated as a CFC if it is owned, or considered as owned, more than 50% (by vote or value) by U.S. persons who each own at least 10% of the voting power of the foreign corporation. § 957(c).

14. The annual exclusion for gifts made in 2007 and 2008 is $12,000. The annual exclusion for gifts to an alien spouse made in 2007 is $125,000; for such gifts made in 2008, the exclusion is $128,000.

15. § 6039F. Gifts or bequests from foreign individuals must be reported if they exceed $100,000 in a calendar year. Purported gifts from foreign corporations or partnerships must be reported if they exceed $10,000. See Notice 97-34, 1997-25 I.R.B. 22.

16. Note that FDAPI does not generally include capital gains, unless such gains either are ECI or from the sale or exchange of a "U.S. real property interest." See § 897.

17. § 6012(a); Treas. Reg. § 1.6012-1(b)(1); see also Instructions to Form 1040NR.

18. Note that a foreign individual or trust having FDAPI whose U.S. tax liability is fully satisfied by withholding at source is not required to file an income tax return. However, a foreign person having any ECI generally is required to file a return, even if their tax liability is eliminated by the terms of an applicable income tax treaty.

19. § 641(b).

20. Treas. Reg. § 1.6012-1; see also Instructions to Form 1040NR.

21. § 6048(a). In Notice 97-34, supra, note 15, the IRS clarified section 6048(a)'s notice requirements. Form 3520, used to report transfers to foreign trusts, is filed with a U.S. transferor's annual income tax return.

22. § 6048(a)(3).

23. § 6048(a)(4). Most such transfers also give rise to the recognition of gain (but not loss) on assets deemed transferred to the foreign nongrantor trust. § 684.

24. Internal Revenue Manual ("IRM") 9.1.3.6. Note that a limitations period can also run against a taxpayer wishing, e.g., to amend a tax return or obtain a tax refund.

25. § 6501(a).

26. § 6501(e)(1)(A).

27. § 6501(c)(1).

28. § 6501(c)(3).

29. § 6501(c)(8).

30. § 7201.

31. § 7202.

32. § 7206(2).

33. § 7203. Note that failure to file a return is considered a criminal misdemeanor, as is filing a false return. The balance of the tax crimes are considered felonies.

34. § 7206(1).

35. § 7207.

36. § 7212(a).

37. IRM 9.1.3.6.

38. 18 U.S.C.§ 371. See Form 1040.

39. This is true even if a divorce decree states that a former spouse will be responsible for any amounts due on previously filed joint returns.

40. However, note that section 6324(b) creates a 10-year "lien" against a beneficiary who receives and uses property of the estate when the estate has not paid the estate tax. The lien may be foreclosed on at any time during the 10 year period by the IRS to collect the unpaid estate tax, irrespective of the limitation period for transferee liability. § 6324(a)(2).

41. See, e.g., Commissioner v. Kuckenberg, 309 F.2d 202, 206 (9th Cir. 1962); O'Neal v. Commissioner, 102 T.C. 666 (1994).

42. See Diamond Gardner v. Commissioner, 38 T.C. 875, 881 (1962).

43. See, e.g., Upjohn v. United States, 449 U.S. 383, 389 (1981); Fisher v. United States, 425 U.S. 391, 403 (1976).

44. See, e.g., Rule 1.6(a) of the American Bar Association's Model Rules of Professional Conduct (2007 ed.) ("ABA Model Rules").

45. See Fisher v. United States, 425 U.S. at 403.

46. See, e.g., United States v. Evans, 113 F.3d 1457, 1461 (7th Cir. 1997), citing 8 John Henry Wigmore, Evidence in Trials at Common Law (McNaughton rev. 1961) § 2290; In re Fischel, 557 F.2d 209, 211 (9th Cir. 1977); Diversified Group, Inc. v. Daugerdas, 217 F.R.D. 152, 161 (S.D. NY 2003).

47. See United States v. Evans, 113 F. 3d at 1461.

48. See Evans, 113 F.3d at 1465; United States v. Keplinger, 776 F.2d 678, 701 (7th Cir. 1985); In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 923 (8th Cir. 1997).

49. In particular, according to Rule 1.6(b) of the ABA Model Rules, an attorney may be permitted to disclose otherwise confidential information (1) to prevent reasonably certain death or substantial bodily harm; (2) to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer's services; (3) to prevent, mitigate or rectify substantial injury to the financial interests or property of another that is reasonably certain to result or has resulted from the client's commission of a crime or fraud in furtherance of which the client has used the lawyer's services; (4) to secure legal advice about the lawyer's compliance with other rules of professional conduct; (5) to establish a claim or defense on behalf of the lawyer in a controversy between the lawyer and the client, to establish a defense to a criminal charge or civil claim against the lawyer based upon conduct in which the client was involved, or to respond to allegations in any proceeding concerning the lawyer's representation of the client; or (6) to comply with other law or a court order.

50. See Hickman v. Taylor, 329 U.S. 495 (1947).

51. Fed. R. Civ. Proc. 26(b)(3); see also Hartz Mountain Industries, Inc. v. Commissioner, 93 T.C. 521 (1989).

This article is designed to give general information on the developments covered, not to serve as legal advice related to specific situations or as a legal opinion. Counsel should be consulted for legal advice.

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In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions