Failure to Disclose Offshore Accounts Could Cost U.S. Taxpayers 50% of Their Accounts’ Value: Deadline to Disclose is August 3Press Releases
Posted on July 15, 2014 | Share
Kevin E. Thorn, Managing Partner of Thorn Law Group discusses the looming 50% IRS penalty for not disclosing hidden foreign bank accounts prior to August 4, 2014, and the effect that this 50% penalty may have on U.S. Taxpayer with undisclosed foreign bank accounts.
Washington, DC (PRWEB) July 15, 2014 - The Internal Revenue Service (IRS) announced a big change to its Offshore Voluntary Disclosure Program (OVDP). Starting August 4, 2014, taxpayers who come forward in the OVDP to disclose foreign accounts at banks that are publicly known to be under criminal investigation by the will face a penalty equal to 50% of the highest value of those accounts over the past eight years. The IRS has identified at least ten banks whose accountholders face this penalty, including:
- UBS AG
- Credit Suisse AG, Credit Suisse Fides and Clariden Leu Ltd.
- Wegelin & Co.
- Liechtensteinische Landesbank AG
- Zuercher Kantonalbank
- swisspartners Investment Network AG, swisspartners Wealth Management AG, swisspartners Insurance Company SPC Ltd., and swisspartners Versicherung AG
- CIBC First Caribbean International Bank Ltd., its predecessors, subsidiaries and affiliates
- Stanford International Bank Ltd., Stanford Group Company and Stanford Trust Company Ltd.
- The Hong Kong and Shanghai Banking Corporation Ltd. in India (HSBC India)
- The Bank of N.T. Butterfield & Son Ltd. (also known as Butterfield Bank and Bank of Butterfield), its predecessors, subsidiaries and affiliates
With this 50% penalty increase, (up from 27.5%), Kevin E. Thorn of Thorn Law Group notes, “ if someone has an undeclared overseas account at a foreign bank, especially at one of the banks named, they should come forward and get back into compliance now.” Thorn observes that, “the list of banks publicly known to be under investigation is certain to grow without warning. Once it becomes public knowledge that the Department of Justice or IRS is investigating a bank, the taxpayer may not be able to disclose without paying a penalty of half the account value.” Thorn adds that, “Just because a bank is not on the IRS's published list is not a guarantee that the 50% penalty will not be applied. Publicity of an investigation can happen in may ways. Once the investigation is made public by whatever means, the penalty jumps.”
Thorn also observes that “the account information the Department of Justice (DOJ) has and continues to receive from foreign banks and others has allowed the U.S. government to identify and prosecute American taxpayers with undisclosed foreign accounts faster than ever before, and the list of banks cooperating with the U.S. government is continually growing.”
Kevin E. Thorn, recommends that U.S. taxpayers with undisclosed overseas accounts enter into the IRS's Offshore Voluntary Disclosure program in order to avoid the 50% penalties and possible criminal prosecution. “Foreign banks are making their own version of IRS voluntary disclosures to avoid prosecution and severe penalties, and so should U.S. taxpayers with undisclosed foreign bank accounts. Once the DOJ and the IRS obtain account information or the identities of U.S. taxpayers with hidden foreign accounts in these overseas banks, they will not allow the account holders to enter into the IRS's Offshore Voluntary Disclosure program.” He also notes that “the IRS and the DOJ will continue to put pressure on all foreign banks in order to obtain U.S. Taxpayer account information.”
Mr. Thorn has also observed that many foreign banks are sending letters to U.S. citizens with foreign accounts informing them of the banks’ decisions to participate in the IRS Offshore Voluntary Disclosure Program and suggesting that they do the same, Thorn states that, “If your bank sends you a letter advising you to enter the IRS’s Offshore Voluntary Disclosure program, consider it a warning that they are going to turn your undisclosed account information over to the DOJ and IRS very soon.” Thorn recommends that U.S. taxpayers with undisclosed foreign accounts contact an experienced tax attorney as soon as possible in order to discuss their rights and options.
For additional information on the news that is the subject of this release, contact Kevin E. Thorn, Managing Partner of Thorn Law Group at 202-270-7273 or visit us at http://www.thorntaxlaw.com/.
About Thorn Law Group, PLLC: Thorn Law Group, PLLC is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems.
Kevin E. Thorn
Managing Partner Thorn Law Group, PLLC