Time is Running out to Limit Penalties for Undeclared Offshore AccountsArticles/News, Featured, Offshore Account Update
Posted in on July 21, 2014
If you have an account offshore, the Report of Foreign Bank Account and Financial Accounts Report (FBAR) must be filed each year with the Internal Revenue Service to declare the account. If you have failed to file your FBAR and have not disclosed your foreign accounts, you could face penalties. You may be fined and even prosecuted for felony tax evasion and potentially sent to jail.
There is a program in place to allow you to come forward and report your accounts and past failures to file an FBAR. Called the Offshore Voluntary Disclosure Program, or OVDP, the program allows you to limit your penalties and avoid criminal action against you. However, the IRS announced some changes to OVDP in mid-June and if you do not come forward by August 3, 2014 then you are going to face much higher penalties.
Now is the time to act and become part of the OVDP if you have undeclared offshore accounts. A Washington D.C. IRS voluntary disclosure lawyer can assist you in determining if OVDP is the best option for you and can help throughout the process of declaring your accounts.
The Importance of Declaring Your Accounts With OVDP Now
Under the current rules, if you come forward and voluntarily disclose your foreign accounts, your penalties are limited to 27.5 percent of the account balance.
If you do not become part of OVDP at all, then your penalties will be much higher if you are caught. In one recent case, penalties totaling 150 percent of the value of the offshore account were upheld.
If you wait to become part of OVDP until after August 3, then your penalties will go up from 27.5 to 50 percent of the value of the account. There is no reason to take a chance on losing this additional money if you have an offshore account. You should act quickly and contact a Washington D.C. IRS voluntary disclosure lawyer today to help you to get the process started before the deadline.
Becoming a part of OVDP is possible only if the government does not already have information suggesting you violated the rules regarding declaring offshore accounts. Many banks are currently under investigation and are turning over information on their customers to the IRS. This includes various Credit Suisse branches as well as other banks including First Caribbean Bank and its subsidiaries.
The IRS has stepped up its enforcement efforts and the banks are taking the investigations seriously. If the information that the IRS obtains shows you willful violated the FBAR reporting requirement, then you could not only lose much more money in fines and penalties but you could also potentially be charged with felony tax evasion and go to jail.
You do not want to wait until the IRS gets evidence to use against you or until the penalties rise significantly. The OVDP program may be the best solution you have to limit the potential loss associated with undeclared offshore accounts. Call a Washington D.C. IRS voluntary disclosure lawyer at Thorn Law Group today to become part of the OVDP before it is too late.