Topic: Foreign Accounts
Unless you have been living under a rock you most likely are aware that the federal government is in the middle of a major crackdown on offshore tax havens that is making it impossible for Americans to hide (or even continue to hide) their money or income generating assets overseas.
Even republican presidential candidate Mitt Romney acknowledged that he had money in a Swiss bank account up until 2010. While it’s clear that he wasn’t trying to hide the money, since he apparently dutifully reported the existence of the account to the U.S. government on TDF 90-22.1 and picked up the income generated by the account on an annual basis on his personal tax return, he repatriated the funds to the U.S. in the face of the current controversy concerning overseas income generating assets and accounts.
The amount of funds hidden offshore is estimated to be as high as $31 trillion worldwide and that’s just an educated guess given that tax havens are by their very nature secretive which is what draws investment within their borders in the first place.
The IRS is now aware that quite often offshore bank accounts are not kept in the owner’s name. Often individuals hide their money by opening an account in the name of a foreign corporation or in the name of a foreign trust which in the past made it nearly impossible for the Internal Revenue Service to detect it. Tax havens historically have been non-cooperative with the IRS and even if the IRS got wind of some U.S. owned Swiss corporation for example, they would on occasion would go to the Swiss government and ask, Who owns this corporation? And they would usually get no information in return due to the Swiss Bank Secrecy Laws.
But the age of the tax haven is rapidly coming to an end. Starting in 2007 when the U.S. government received a tip from a paid informant that the Swiss bank UBS was helping people evade taxes. After being UBS and the Swiss Government was sued by the U.S. Government, the bank ultimately had to disclose the names of its American Clients.
The UBS litigation created a patented methodology to take down government supported tax havens worldwide. The U.S. government has been literally lighting banks on fire and offering amnesty to the rats exiting the burning building. Taxpayers with unreported offshore accounts came forward in droves fully disclosing information that has fueled countless other banks all over the world to come under investigation for UBS like tactics of promoting income tax evasion by U.S. citizens.
I get calls every day from people who are interested in making offshore voluntary disclosures. I have done close to a hundred of them. Many enlightened Americans with offshore funds and income producing assets have realized that the net is closing and the opportunity of minimizing penalties and avoiding criminal prosecution has a very limited shelf life.
Many of the Clients that I have taken through the program defy the typical “tax evader” stereotypes about the kind of person who might hold a foreign account or have offshore income producing assets. Often these people incorrectly were under the impression that they would have to pay inheritance taxes on assets that their foreign relatives bequeathed to them so they hid the existence of the accounts and assets offshore. Many other have foreign accounts and assets that they owned before ever coming to the U.S. and incorrectly believed that these accounts and assets were none of the U.S. Government’s business. Unfortunately, as a U.S. citizen or green card holder, you are required to report the existence of foreign accounts and report the income from offshore income generating assets. If you have failed to do so, contact my office. We can help! But remember – We have to go to them before they find you… Otherwise – all bets are off and the favorable terms of the voluntary disclosure program regarding civil penalties and the ability to avoid criminal prosecution are lost.