U.S. Continues to Crack Down on Offshore Bank Account Compliance Amid COVID-19

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U.S. Continues to Crack Down on Offshore Bank Account Compliance Amid COVID-19

Foreign Retirement Income Dangers

According to a Department of Justice press release, Israel’s largest bank recently pleaded guilty to charges relating to its willful provision of assistance to Americans attempting to hide money in undeclared bank accounts overseas. Although most Americans are occupied with the ongoing COVID-19 pandemic, the Department of Justice and IRS are continuing their work to prosecute the individuals and banks responsible for foreign bank account reporting (FBAR) noncompliance. If you have an interest in a foreign bank account and have not reported such interest, it is in your best interest to contact an experienced FBAR defense attorney as soon as possible to discuss your options for coming into compliance.  Your exposure goes up dramatically if there are large amounts of unreported taxable offshore income associated with the offshore financial account.

Swiss Subsidiary of Israeli Bank Pleads Guilty

On April 30th, representatives for Bank Hapoalim pleaded guilty in federal court for its Swiss subsidiary’s role in helping Americans keep their foreign bank accounts hidden. On the same day, prosecutors filed criminal charges against Bank Hapoalim B.M., the Israeli parent of Bank Hapoalim (Switzerland) Ltd. Prosecutors allege that the bank, as a whole, helped U.S. taxpayers hide more than $7.6 billion through the use of more than 5,500 secret Israeli and Swiss bank accounts.

As a part of the federal proceedings, Bank Hapoalim agreed to pay over $874 million, to be split between the federal government and the state of New York’s Department of Financial Services. Additionally, the Israeli bank agreed to provide information about accounts owned by Americans to the Department of Justice and cooperate in future investigations and prosecutions related to those accounts.

Understanding Your FBAR Obligations

FBAR laws require that Americans with foreign bank accounts with a balance of $10,000 or more at any point during the year are required to notify the government about the existence of such an account. Willful failure to do so can result in penalties of up to half of the high balance of the account for each year that the account went unreported. Additionally, the willful failure to disclose your foreign bank account can result in criminal charges, potentially ending in a stay in federal prison.

For those Americans with foreign bank accounts that have gone unreported, this news should be very concerning. Even though the global COVID-19 pandemic, the Department of Justice and IRS are working hard to bring those failing to comply with FBAR laws to justice. Now is the time to come forward and come into compliance while there is still time. It may be too late to control the narrative if you wait until the Department of Justice or the IRS to contact you about your undeclared foreign bank account.

Note:  As long as a taxpayer that has willfully committed tax crimes (potentially including non-filed returns coupled with affirmative evasion of payment) self-reports the tax fraud (including a pattern of non-filed returns) through a domestic or offshore voluntary disclosure before the IRS has started an audit or criminal tax investigation/prosecution, the taxpayer can ordinarily be successfully brought back into tax compliance and receive a nearly guaranteed pass on criminal tax prosecution and simultaneously often receive a break on the civil penalties that would otherwise apply.

It is imperative that you hire an experienced and reputable criminal tax defense attorney to take you through the voluntary disclosure process.  Only an Attorney has the Attorney-Client Privilege and Work Product Privileges that will prevent the very professional that you hire from being potentially being forced to become a witness against you, especially where they prepared the returns that need to be amended, in a subsequent criminal tax audit, investigation or prosecution.

Moreover, only an Attorney can enter you into a voluntary disclosure without engaging in the unauthorized practice of law (a crime in itself). Only an Attorney trained in Criminal Tax Defense fully understands the risks and rewards involved in voluntary disclosures and how to protect you if you do not qualify for a voluntary disclosure.

As uniquely qualified and extensively experienced Criminal Tax Defense Tax Attorneys, Kovel CPAs and EAs, our firm provides a one stop shop to efficiently achieve the optimal and predictable results that simultaneously protect your liberty and your net worth.   See our Testimonials to see what our clients have to say about us!

See our Non-Filer Q and A Library

See our 2011 OVDI Q and A Library

See our FBAR Compliance and Disclosure Q and A Library 

See our Foreign Audit Q and A Library

There are various methods that can be employed to bring you into compliance. Working with your experienced FBAR defense attorney, your different options can be weighed and the best plan selected. Regardless of the method chosen to come back into compliance, one thing is true: waiting until the IRS comes after you is not a viable option.

We Are Here for You 

Regardless of your particular business or estate needs, the professionals at the Tax Law Offices of David W. Klasing are here for you. We are open for business and our team will help ensure that your business is too. Contact the Law Offices of David W. Klasing today to discuss your business with one of our professionals.

In addition to our main office in Irvine,  the Tax Law Offices of David W. Klasing has unstaffed (conference room only) satellite offices in Los Angeles, San Bernardino, Santa Barbara, Panorama City, Oxnard, San Diego, Bakersfield, San Jose, San Francisco, Oakland, Carlsbad and Sacramento. During the COVID-19 pandemic, our staff are working from home, but have full virtual meeting capability.

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