Taxpayers With Undisclosed Foreign Accounts Need to Act NowOffshore Account Update
Posted in on July 25, 2014
If you have an undisclosed foreign account or have failed to file a Report of Foreign Bank Account and Financial Accounts Report (FBAR), you face significant civil penalties and even potential criminal prosecution. The Internal Revenue Service is dedicating more resources to investigating offshore accounts and numerous foreign banks are currently under investigation and may turn over customer information.
The Offshore Voluntary Disclosure Program (OVDP) will allow you to limit the penalties you face and avoid criminal prosecution. However, you need to come forward before your bank provides information about your account. Penalties are also set to go up significantly on August 3, 2014 so you are running out of time to avoid losing as much as 50 percent of your account balance. Contact a tax law attorney today to learn if OVDP is right for you and to get started before it is too late.
You Are Running Out of Time to Enter OVDP
If you voluntarily disclosure your offshore accounts, through OVDP the current penalty rate that you will face is 27.5 percent of the total account balance in the undeclared account. However, if you do not make an OVDP submission before August 3, 2014, the penalty rate is going to go up significantly to 50 percent of the account balance.
This means if you do not come forward now, you could lose a significant amount of additional funds if you do decide to become part of the OVDP in the future. Furthermore, the longer you wait to become part of the OVDP, the greater the risk you will be unable to do so at all.
The IRS is currently investigating numerous offshore banks including various Credit Suisse branches; ABS Ag; The Bank of N.T. Butterfield and Son Limited; and First Caribbean Bank and its various subsidiaries. This is just a brief list of offshore banks that are facing ongoing investigations by the U.S. government.
If these banks decide to provide information to the IRS that demonstrates you acted willfully in failing to disclose your foreign account, you will no longer be able to become a part of the OVDP program for non-willful violators. Instead, you face the maximum civil penalties and you could even be prosecuted for tax evasion. Tax evasion is a felony and you could be left with a permanent record if found guilty. There is also the risk of jail time.
For many people, taking a chance on larger penalties and prosecution is not worth the risk, especially in light of additional IRS enforcement efforts that make it more likely you will be caught. OVDP provides a good solution for those with undeclared offshore accounts who want to come forward and eliminate the risk of future discovery.
If you are interested in OVDP, do not wait until your penalty goes up. Contact a New Jersey tax law attorney at Thorn Law Group now and get your application in before the deadline so you can lock in the lower penalty rate. You have a very limited time left, so call a tax attorney for help today.