The IRS has identified 26 Swiss banks who they believe have made specific efforts to help US taxpayers to evade income taxes. The mandatory penalty for these institutions will be 50%, instead of the 27.5% provided by the IRS Offshore Voluntary Disclosure Program or OVDP.
The impact of FATCA on the international financial and tax communities has been substantial. The ability of US taxpayers to hide income and assets from the IRS using offshore banks and institutions has significantly eroded over the past several months. The net issue for US taxpayers is coming into compliance with IRS FBAR guidelines before the IRS adds your bank(s) to their 50% OVDP Penalty List.
The question for those who have filed streamlined applications (5% penalty for those accepted into the program) remains open and unclear. What penalty will streamlined program participants pay if their bank(s) are listed on the IRS 50% OVDP Penalty List? Will participation with institutions accused of actively developing and implementing strategies to assist US taxpayers in efforts to evade income tax reporting and payment change the classification of their behavior to “willful” resulting in their dismissal from the streamlined program, exposing them to the maximum fines, penalties and even criminal prosecution?
These are challenging times for US taxpayers with offshore accounts, investments or assets and you should be in constant contact with an experienced and knowledgable tax attorney. We invite you to call for a free consultation at 866-631-3470.