The IRS continues to add more and more international banks, financial and investment firms to its list of 50% OVDP penalty institutions each month. The list is based upon the IRS’ determination that the bank or institution has actively helped US taxpayers to shelter income or avoid paying US taxes. The most recent additions to this list include:
- Bank Lombard Odier & Co Ltd (effective 12/31/15)
- DZ Privatbank (Schweiz) AG (effective 12/31/15)
- Union Bancaire Privée , USP SA (effective 1/6/16)
- PHZ Privat – und Handelsbank Zürich AG reorganized as Leodan Privatbank AG (effective 1/25/16)
- Hyposwiss Privatbank AG reorganized as HSZH Verwaltungs AG (effective 1/27/16)
- Bank Julius Baer & Co., Ltd (effective 2/4/16)
Taxpayers who file applications under the Offshore Voluntary Reporting Program or OVDP face an automatic penalty of 50% of the highest aggregate balance in offshore accounts or $100,000 (whichever is greater) if they had any accounts in the banks on the IRS list. The “look back” period for this exposure can be up to 8 years, and the OVDP application requires the completion and submission of updated FBARs for the associated period. This is still far better than the 100% or higher tax, penalty and interest burden imposed on those taxpayers who do not come into compliance with the IRS and FBAR reporting, not to mention criminal tax evasion prosecution.
There is no clear guidance from the IRS as to the impact of the 50% OVDP penalty institutions on those who attempted to file streamlined applications.
Yes, the IRS has put several individuals into jail for unreported offshore accounts and assets, including a 75 year old Florida man with a terminal illness. This is serious business, and the IRS has carefully worked the US Justice Department to lay the groundwork for FATCA and to remove all barriers to information regarding US taxpayers. The inter-agency and mutual exchange of information agreements established with foreign sovereign tax authorities, as well as the voluntary submission of account information and transactional details of US taxpayers financial dealings abroad by tens of thousands of banks and institutions world-wide exposes US taxpayers directly to the IRS.
There are no more safe havens. It is time to come into compliance with the IRS regarding offshore bank accounts, foreign investments, foreign corporate ownership and offshore assets. Call for a free and substantial consultation today at 866-631-3470 and learn about the protections and services available through the experienced tax attorneys at Allen Barron.
