If you have filed an FBAR with the IRS over the past 8 years, or had any foreign asset or account in that period and did not fully disclose it to the IRS via the FBAR or associated IRS forms, you need to read on. The IRS has gained access to a vast trove of information from foreign banks, investment houses and even sovereign tax authorities including Swiss bank account information. They begin to unwrap their Christmas present Tomorrow: July 1, 2014. The data will allow the IRS to tie information about foreign bank accounts, assets, property and investments directly to US social security numbers and/or federal tax IDs. That means you, personally. The IRS has provided an opportunity for you to come into compliance by August 15 (six weeks from now), and save a huge sum of money in the process. After August 15, all bets are off. When the IRS connects the dots, they will simply compare their new data to past FBARs, and if anything is unreported or under-reported the audit notices will go out. If the IRS comes to you, they will assume that you were willfully attempting to shield income and assets from US taxes, and you will face criminal charges, and a fine of 50% of the highest aggregate valuation of every offshore account and asset over the past 8 years.
It doesn’t matter what you still own, or what the value of an account or asset is today. They will take the highest point of the total of your foreign assets at any point over the past 8 years, and they will declare that you will owe 50% of that amount, and face potential criminal tax evasion charges. That is a big stick. Even if you are able to successfully argue that it was an oversight or some other “non-willful” conduct, you will face at least 27.5% in penalties.
The good news is you have an opportunity to come into compliance through streamlined domestic offshore procedures in the OVDP and reduce the look-back period to only 3 years, and a penalty of 5%. We invite you to call us at 866-631-3470 for a confidential and complimentary initial consultation. Your information will be protected by attorney-client privilege and we will discuss how to bring you into compliance and save you thousands of dollars in the process.
