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Report your Foreign Assets before the IRS window closes

//Report your Foreign Assets before the IRS window closes

Report your Foreign Assets before the IRS window closes

There is still time to enter the IRS Off-shore Voluntary Disclosure Program before the IRS receives client account information on April 30,2014 from more than 106 Swiss Banks.

Jeffrey S. Freeman, J.D., LL.M

By April 30, 2014, unless granted a 60-day extension, all Swiss banks participating in the US Department of Justice (DOJ) amnesty program will be required to provide substantial client information on its US account holders. This should serve as an urgent reminder for US taxpayers that have unreported foreign assets to participate in the IRS Off-shore Voluntary Disclosure Program (OVDP) or seek to correct tax noncompliance through other avenues.

The OVDP offers an incentive for delinquent tax payers to disclose their offshore accounts. Tax payers can become compliant, eliminate the risk of criminal prosecution, and greatly reduces the civil penalty exposure by disclosing and paying taxes due plus interest. Applying to the OVDP involves submitting eight amended tax returns with taxes, penalties and interest, eight FBARs, and a 27.5% miscellaneous offshore penalty.

As extensive as applying to the OVDP might seem, not disclosing a foreign account is much scarier. The Assistant Attorney General of the Department of Justice Tax Division recently stated, “I would think that anybody that has an undisclosed account anywhere in the world should come forward…We’ll be looking for you.”

Once Swiss banks turn in the required information, which will occur in the next two to four months, it will be too late for individuals to take advantage of the OVDP and voluntarily admit their noncompliance. With 106 Swiss banks participating in the Voluntary Disclosure Program for banks the timeline is getting even shorter. The IRS has the power at anytime to blacklist and designate specific banks whose account holders will no longer be eligible to participate in the OVDP.

The IRS and DOJ will continue to gather and use the information obtained from banks to identify, audit, and prosecute noncompliant individuals. If the IRS identifies you noncompliance through the amnesty program you face near certain IRS scrutiny, significant liabilities, severe and confiscatory array of civil penalties, and the threat of criminal prosecution.

Reviewing a sample of 2009 OVDP cases shows that more than 42% of unreported assets disclosed through the OVDP were located in Switzerland. Geographically, the participants generally reported a higher income than the average taxpayer and a disproportionate amount of applicants came from higher-income states, such as California, Florida, and New York. With this type of historical information taxpayers that fit this stereotype and still have undisclosed accounts should be especially wary of IRS scrutiny.

The OVDP is a complex program and only experienced legal counsel can ensure that your case is handled properly. Looking at the 2013 National Taxpayer Advocate Report it shows that those individuals that chose to be unrepresented received disproportionately high penalties related to the percentage of unpaid tax. Contact Freeman Tax Law today to help you navigate the appropriate legal course for disclosing your foreign assets to the IRS.

About Freeman Tax Law

Freeman Tax Law is equipped to handle all domestic and international tax law matters. At Freeman Tax Law, the attorneys and professional staff have vast experience with foreign tax compliance, international tax planning, and resolving tax controversies involving offshore banking matters. Freeman Tax Law helps taxpayers and foreign entities become in compliance with laws such as Foreign Account Tax Compliance Act (FATCA) and Offshore Voluntary Disclosure Program (OVDP). In addition to handling complex tax controversies, the Freeman Tax Law team has extensive expertise in assisting clients with wealth management and estate planning.

Freeman Tax Law

(855) 935-5945

info@freemantaxlaw.com

www.freemantaxlaw.com

By | 2017-01-01T11:28:14+00:00 April 11th, 2014|Freeman Tax Law|Comments Off on Report your Foreign Assets before the IRS window closes