Feds Still Coming After Unreported Offshore Account Holders

A recent Wall Street Journal article titled “Offshore Tax Probe Picks Up” shows the Feds continuing to go after Swiss banks both big and small. The government has also expanded their search for U.S. tax cheats in countries such as Israel, India, Singapore, China and elsewhere they believe citizens might be sheltering their secret accounts to evade paying taxes on them.

The article reports that on Monday Switzerland’s oldest private bank, Wegelin & Co. pleaded guilty to violating U.S. tax laws and was ordered to pay a total of $74 million. Federal investigators believe the leads gathered from interviews with confessed tax cheats associated with this case and others has given them new momentum to “aggressively” pursue those who do not comply with U.S. tax laws. The article outlines the U.S. Government’s focus on the following:

  • Banks in Switzerland, both big and small
  • Other countries such as Israel, India, Singapore, China and elsewhere
  • Sprawling giant banks
  • Niche banks who provide offshore accounts
  • Taxpayers with dual citizenship

In a previous post, I wrote about Former IRS Commissioner, Douglas Schulman’s offshore tax strategy which essentially brought Swiss Banks to the bargaining table (reluctantly). This was only after the U.S. Department of Justice (DOJ) leaned really hard on them beginning in 2009 with United Bank of Switzerland (UBS). Here are some important statistics from the Wall Street Journal article:

  • To avoid criminal charges, UBS paid $780 million and turned over the names of about 4,500 U.S. taxpayers with secret accounts.
  • Since 2009, the IRS offered limited amnesty programs to encourage more people to come forward.
  • In those four years, U.S. officials have been able to claw back $5.5 billion in unpaid taxes and penalties.
  • It is estimated that another $5 billion could be collected based for the continuing cases with banks in Switzerland, India, Israel, Hong Kong, Singapore and elsewhere.
  • Total confessions are currently 38,000 but that number is expected to increase considerably.

Other Banks under Scrutiny:

  • According to the article, HSBC Holdings PLC is under scrutiny for how it catered to wealthy Indians born or living in the U.S., and if these folks were offered clandestine accounts by HSBC in India.
  • Three Israeli-American tax preparers were indicted last year for allegedly helping clients hide money in two unidentified Israeli banks. According to the article, lawyers involved in tax-evasion cases saw these criminal charges as a sign of growing interest in Israeli banks by U.S. investigators.

I mention this Wall Street Journal article because it demonstrates the lengths the U.S. Government is willing to go to collect back taxes from its citizens and established banking entities worldwide.

If you have unreported offshore accounts, you need to be proactive about disclosing your foreign funds immediately. Hire an IRS tax attorney or certified tax resolution specialist who can provide some experienced tax relief. Being proactive can work to your advantage for the following reasons:

  • It may help reduce your chances of criminal prosecution (criminal sanctions can be as much as up to 5 years in prison.)
  • It can minimize severe IRS penalties that can exceed 100% of the value of the asset, plus tax penalties and interest.
  • It can help when working out an offshore tax settlement.

An expert tax professional will take over all communications with the IRS, make the required disclosures, file FBAR reports and amend your tax returns typically for 2003 through 2008. But you must act now to get more favorable treatment from the IRS.

More Tax Help, IRS News and Tax Relief Tips:

  1. Offshore Banking-Swiss Tax Evasion Advisors Indicted
  2. FATCA-No Tax Relief for Americans Living Abroad
  3. Treasury Proposes Multilateral Agreement for Offshore Compliance
  4. IRS Help for Americans with Foreign Income
  5. Swiss Bankers Caught Hiding Offshore Accounts from IRS

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