August 4 is the due date for those who wish to submit an application to the IRS under the Streamlined Domestic Offshore Procedures of the OVDP and avoid the increased foreign account penalty. Won’t the IRS simply extend the deadline? Unlikely. The IRS gained access to a trove of international information on July 1 of this year – information that ties specific offshore accounts and asset information directly to US social security numbers and federal IDs. They no longer require the assistance of US taxpayers to identify foreign holdings, and have already begun the process to connect the dots on US residents and expatriates who have shielded income and assets from taxation in offshore accounts and investments. Over 85% of Swiss institutions have provided this data to the IRS. There are no more safe havens, and the IRS continues to pursue those who withhold the information they seek. The US Justice Department has had tremendous success recently prosecuting criminal cases against mammoth offshore financial institutions as well as individual US taxpayers. The day of reckoning is genuinely upon us, and we have a month left to take maximum advantage of the programs provided by the IRS for US taxpayers to come into FATCA and FBAR compliance.
