Did you know that IRS FBAR compliance saves you a lot of money? IRS FBAR compliance ensures you disclose all information about offshore accounts, assets, balances and transactions before the IRS comes knocking on your door for an audit. If you have undisclosed offshore accounts, the IRS will. There are more than 100 sovereign nations around the world, and tens of thousands of banks, financial houses and investment institutions (not to mention tax authorities) who are providing information directly to the IRS on specific US taxpayer activities. This includes most institutions in traditional safe havens: The Swiss, Cayman Islands, even India.
Many US taxpayers were convinced to open foreign trusts in an effort to shield income from taxation. The amazing thing is that many of these foreign trusts hold US assets. The IRS isn’t fooled, and time is running out to comply with FBAR reporting requirements, amend past tax returns and make a full offshore disclosure to the IRS. Financially, this will make a substantial difference. The IRS will look for the highest accumulated balance at any moment in time for each of the past 6 years or more. The penalty for non-disclosure is 50% of that accumulated high point, regardless of how much money is in the account(s) today or $100,000 per incidence, whichever is higher. The penalties are applied separately to each year, and add up quickly. Taxpayers who do not come clean face criminal tax evasion charges and the very real risk of jail time.
The VDP program reduces FBAR penalties from 50% or $100,000 per incident per year to 25%, except for institutions that the IRS has labeled as tax evasion houses prior to the filing of your offshore voluntary disclosure. The OVDP also relieves the taxpayer from any criminal liability or exposure. The time to come into IRS FBAR compliance is now.
If you have yet to disclose offshore income and assets to the IRS, the experienced international tax attorneys at Allen Barron invite you contact us or call today for a free and substantive consultation at 866-631-3470.
