The US Department of Justice has sent information requests to forty Swiss banks taking part in an information sharing program between the US and Switzerland. This program evolved out of the 2010 Foreign Account Tax Compliance Act (FATCA) which provides from automatic information sharing between foreign financial institutions and the US government regarding the accounts of US depositors.
FATCA is part of a push by the US over the last several years to rein in tax evasion through offshore accounts and foreign assets. It has long been the legal requirement for US taxpayers to report their offshore assets by filing required forms with the Department of the Treasury. Through laws like FATCA, the US has greatly expanded its ability to collect information on foreign accounts and crackdown upon tax evaders and those who fail to report their assets.
Penalties in these case can be severe and can include criminal charges. The good news for taxpayers is the IRS has an ongoing amnesty program, the Offshore Voluntary Disclosure Program. In agreeing to come clean about their offshore assets and paying reduced penalties, taxpayers avoid criminal prosecution. Although the program is ongoing with no deadlines as such, the IRS is free to alter the terms at their discretion. They have, for example, over the years increased the penalties. It may be ideal to consider participation sooner rather than later.
The Swiss banks recently sent requests are part of a group of banks in that country which have been identified as likely to have undeclared US accounts. As US authorities gather more and more information on offshore accounts, it’s important to keep in mind the one of the conditions for participation in the OVDP. If the IRS has already begun investigating you, you are not eligible to participate. With more information coming in through laws like FATCA, the window may be closing for some taxpayers.
Horowitz Law Offices has represented taxpayers in the OVDP since its inception. You are welcome to contact us at (312) 787-5533 or firstname.lastname@example.org