Reforms to the Internal Revenue Service's (IRS) longstanding Offshore Voluntary Disclosure Program (OVDP) have resulted in raised penalties for tax evaders possessing foreign bank accounts with certain institutions. Under this program, Americans with non-willfully hidden offshore bank accounts are given the opportunity to disclose their account balances at the cost of a 27.5% penalty as a way to get right with the IRS and avoid criminal prosecution. Those who have accounts with certain foreign institutions, however, are subject to a much higher 50% penalty.
Taxpayers now face a 50% penalty if they hold accounts at any of the following institutions:
- St. Galler Kantonalbank AG
- E. Gutzwiller & Cie, Bankquiers
- Migros Bank AG
- Graubündner Kantonalbank
- BHF-Bank (Schweiz) AG
- Finacor SA
- Schaffhauser Kantonalbank
- BBVA Suiza S.A.
This program has grown in popularity with participation from many overseas banks. Failing to report overseas income to the IRS can potentially have catastrophic civil and criminal penalties, as willful violations can carry penalties equaling the greater of $100,000 or 50% of an account's balance for each violation. These penalties alone can sometimes exceed a person's entire offshore balance, making a one-time 50% penalty appear attractive.
This boost in penalties is likely a symptom of the IRS's increased efforts to root out tax evaders, shown by the widespread John Doe summonses recently issued to carriers such as FedEx, DHL, and UPS related to Americans with accounts at Sovereign Management & Legal Ltd. Those who are named in a John Doe summons and are cooperating with authorities are still able to opt for the OVDP deal, though willful evaders are not eligible for this privilege.
Contact the Law Office of Antonio Tomas, P.A. Today
If you currently hold an offshore bank account at any of the aforementioned institutions or are being investigated by the IRS, it is imperative you contact a Miami tax attorney from the Law Office of Antonio Tomas, P.A as soon as possible to protect your interests. Having earned a Super Lawyers® Rising Stars℠ inclusion for our unparalleled advocacy, we have the knowledge and skills to guide you through this difficult time and maximize your chances of securing a positive outcome for your situation.
Get started today by calling us at (305) 290-2313 to request a free consultation.