You got a letter from your Swiss bank – Should you enter the OVDP?

Real advice from a real lawyer on if you should enter the Offshore Voluntary Disclosure Program Jeffrey S. Freeman, J.D., LL.M U.S. Citizens that held Swiss bank account are getting lots of mail and it's not junk mail. So far 106 Swiss banks have entered into non-prosecution agreements with the U.S. Department of Justice. These agreements allow them legal protection for their crime of aiding U.S. citizens in evading their tax responsibilities. In an effort to come clean these banks must now verify that their clients did actually report their foreign account earnings on their income tax returns and appropriate FBARs. If their customers cannot provide sufficient documentation that they have either reported their accounts on prior tax returns or are currently involved in a voluntary disclosure program the bank must pay 20% of the highest account balance to the U.S. Government as a penalty. The bank then is able to go after the client and try to reclaim the funds that they paid to the U.S. Government. Talk about a headache. Decision Time If you completely disclosed your offshore accounts and appropriately filed the correct forms then this letter should not cause you much alarm. Simple copy and submit [...]