The IRS recently announced the addition of several foreign banks and institutions to its list of 50% OVDP penalty institutions. These banks have been found by the IRS to help US taxpayers to avoid paying income taxes, and have agreed to pay huge fines as part of their settlement with the US. They will also be providing full disclosure to the IRS about all US taxpayers with accounts and investments in Swiss institutions.
While many US taxpayers have attempted to take the “non-willful” streamilned disclosure program, the safer alternative is the OVDP – a well established program to come into compliance with IRS FBAR reporting requirements. The penalties may appear higher at 27.5% than the streamlined program (5%) but that hope is based upon the acceptance of the IRS that a taxpayer’s activities were a non-willful omission or error, and not an attempt to evade taxes.
Many US taxpayers who have submitted streamlined applications are exposed to a potentially harsh reality – the IRS denies their application, declares their activities as “willful” and subjects them to 100% penalties or $100,000 per year (which ever is higher) going back 8 years.
Allen Barron is uniquely positioned to advise US taxpayers who have offshore bank accounts and investments. We provide full tax preparation, CPA, accounting and legal services under a single source. If you have yet to come into compliance with the IRS FBAR requirements we invite you to contact us for a free and substantive consultation at 866-631-3470.