The IRS has listed hiding income and assets in offshore accounts in its “Dirty Dozen” annual scam target list. This is yet another signal to US taxpayers who have not yet come into compliance with the IRS and FBAR reporting reporting requirements relating to their offshore financial activities. The IRS has developed inter-reporting relationships with tens of thousands of financial institutions around the world. The IRS is directly receiving information about US taxpayers, tied to their social security number or taxpayer ID, relaying detailed financial information including:
- Offshore Account Information and Balances
- Offshore Investment Activity
- Offshore Financial Transactions
- Ownership of Real Estate and Other Offshore Assets
The IRS has provided two voluntary initiatives to come into compliance with offshore account reporting: the OVDP and the Streamlined Domestic (Foreign) Offshore Procedures. Each program is based upon the specific behaviors of the US taxpayer, and the extent of previously unreported activities. If the US taxpayer is hiding income and assets in offshore accounts, the IRS intends to apply draconian taxation, penalties and interest that could exceed the highest balance of the account at any point. It also intends to use criminal tax evasion prosecution for those who it believes have purposefully avoided US taxation.
The stakes are high, and there are few places left to hide. Almost all Swiss and Cayman Island institutions have come into agreement with the IRS, and are providing direct reporting on US taxpayers who have been hiding income and assets in offshore accounts. If you have offshore income, assets or financial accounts we invite you to contact us for a free ans substantial consultation at 866-631-3470. Learn about the legal protections that are only available through our experienced tax attorneys, and the single source provision of legal, tax and accounting advice and services available through Allen Barron.
