The subject of hiding income and assets in secret offshore bank accounts has gone from a somewhat glamorous endeavor to reduce the amount of taxes one would pay to the IRS to a practice that is denounced world-wide as evidenced by convictions against major Swiss banks and financial institutions and the revelations of the “Panama Papers.” Who would have conceived at the beginning of 2008 when the US began investigating offshore banks including Swiss banking giant UBS AG that the world would be sharing personal bank account information including balances and transactions with the IRS at this point in 2016? Allen Barron is committed to helping US citizens, US expats and foreign nationals living and working to come into compliance with issues surrounding offshore accounts subjects such as tax evasion and the IRS OVDP or Offshore Voluntary Disclosure Program.
In 2009 UBS AG was forced to admit that it had helped tens of thousands of US taxpayers to evade the payment of taxes to the IRS. As one of the largest financial institutions, UBS AG became the first domino in a US strategy to end global tax havens and expose the genuine movement of money and assets around the world. UBS agreed to pay a fine of $780 million and provide the IRS with a list of all US taxpayers who had accounts within the bank or associated financial institutions as well as details regarding present and historical balances and transactions. In 2010 the US passed the Foreign Account Tax Compliance Act or FATCA requiring all international banks, financial institutions and sovereign tax agencies to provide similar information to the IRS or face being frozen out of US markets.
Soon after the OVDP was offered as a voluntary tax disclosure vehicle for US taxpayers to come clean with the IRS about previously unreported offshore accounts and assets. The program offered to reduce the penalties for failing to disclose offshore account, asset and income information from 50% of the high-water mark of accumulated assets for each year or $100,000 – whichever was higher. Acceptance of an OVDP application also released the US taxpayer from the genuine threat of criminal tax evasion prosecution and prison time. OVDP requires the taxpayer to make a “complete, transparent, accurate” and all-inclusive disclosure to the IRS with modified past tax returns and FBARs for the past six years in return for a lowered penalty of 27.5% on previously unreported offshore accounts.
Later, the IRS created a list of worldwide banks and financial institutions who either admitted or were found by the IRS to help US taxpayers to evade the payment of taxes. The IRS increased the FBAR related penalties for these institutions from 27.5% to 50% for all those who had not previously disclosed accounts with these institutions before the date they were added to the list.
The world has dramatically and forever changed. When clients contact the experienced international tax attorneys at Allen Barron regarding offshore accounts tax evasion and the IRS OVDP they receive the protection of the attorney-client privilege. They are also able to draw on the full accounting, tax preparation and legal services of the firm in support of their goals. If you have yet to come into IRS FBAR compliance we invite you to contact us for a free consultation at 866-631-3470.