The IRS recently obtained a windfall (from the IRS’ perspective) of financial information relating to foreign accounts and assets specifically tied to US taxpayers or entities. Pressure brought upon foreign institutions by the US Justice Department brought settlements with most offshore investment houses and banks, and since July 1 the IRS has been combing through this information associating those accounts with individual and corporate US taxpayers. A quick comparison between this information and the accounts and assets disclosed on the taxpayer’s FBARs over the past several years quickly identifies those who have not correctly reported foreign income, assets and accounts. As a result the IRS will have ample reason to audit the returns of the taxpayer seeking an explanation for the difference between what the taxpayer willfully reported and what the IRS now knows to be the case. For those that have unreported or under-reported foreign assets and income the penalties and interest will be severe – 50% or higher of the highest total balance of those accounts over the past 8 years regardless of the present value, not to mention the serious possibility of criminal tax evasion charges.
There may still be time to avoid this outcome. If there is any doubt in your mind that the amounts you’ve reported to the IRS on FBARs over the past 8 years were either inaccurate or under-reported I urge you to call our office immediately for a complimentary consultation at 866-631-3470. There are strategies available to limit your exposure and ultimately the extent of the money you will owe the IRS. You will also be protected by tomorrow’s subject: “Attorney-Client Privilege”.