According to various reports the IRS is investigating the Israeli banks Bank Leumi, Bank Hapoalim and Mizrahi Tefahot Bank for conspiring with individuals to enter into a loan scheme intended to evade taxes on funds brought to the U.S. from undisclosed foreign bank accounts. The focus on the banks themselves is a notable departure from similar investigations in the past. In prior investigations, the bank or bankers had a passive relationship, whereas Bank Leumi allegedly took an active role in setting up the scheme to evade taxes . Bank Leumi has sent letters to various account holders suggesting clients enter into the IRS voluntary disclosure program otherwise known as the Offshore Voluntary Disclosure Program/Initiative (OVDP or OVDI).
The off shore voluntary disclosure initiative began several years ago. The program offers reduced penalties to taxpayers who come clean about their previously undisclosed offshore accounts and foreign assets. At the end of each deadline for submission the programs have been extended in various forms although the benefits with each iteration have diminished and the penalties have risen. The latest offshore disclosure program has no set deadline but is subject to modification by the IRS at any time.
Horowitz Law Offices has represented numerous clients in various versions of the off shore voluntary disclosure program since its inception. Form ore information on offshore disclosure, taxation of foreign assets, or for other civil or criminal tax law concerns, contact Horowitz Law Offices.