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Health & Fitness

Dealing with Unreported Foreign Bank Accounts and the IRS in Greenwich, Connecticut - Part I

The Recent IRS crackdown on owners of foreign bank accounts is not a fad, nor is it limited to Switzerland. Clients need to understand the urgency and get help now to avoid criminal prosecution and draconian penalties if their name is turned over.

We represent taxpayers involved with bankruptcy & financial restructuring, Foreign Bank Account Enforcement issues, Bank Secrecy Act enforcement and civil and criminal taxpayer representation.  Since the IRS rolled out its Offshore Voluntary Disclosure Initiative (OVDI) in 2009 we have helped numerous taxpayers in Greenwich, Connecticut and elsewhere come forward and clean up this outstanding, potentially criminal, tax issue. 

Recent events have created a new urgency for taxpayers who have not yet come forward but who should deal with this issue.  The newly agreed U.S.-Swiss Amnesty has given Swiss banks a reason to now turn over all of their United States clientele in exchange for a no-prosecution deal with the United States Government.  Many clients are now being told they have until June 30th to clear up their foreign bank account issue with the IRS before their name is turned over.

Unfortunately, it is not just Switzerland.  Israel, India, Hong Kong, Australia and other countries are also cooperating with the United States Department of Justice.

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Taxpayers are required to file Foreign Bank Account Reporting Forms (“FBARs”)  each year by June 30th, and now these forms are filed electronically through FinCen (the Financial Crimes Enforcement Network of the Treasury Department) as FinCen report 114.

Taxpayer’s who are identified by the Department of Justice and IRS who have not come forward face criminal prosecution and steep penalties, including:

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·      A 75% civil fraud penalty for any unreported income

·      A willful penalty for failing to report the foreign account of up to $100,000 or 50% of the highest aggregate balance that year, whichever is higher.

In Part II of this series we will review the actual OVDP program itself, and in Part III we will review recent prosecutions and what taxpayers can learn from the recent government enforcement activities.

Even if the taxpayer’s failure to file the FBARs are deemed non-willful, the taxpayer could be looking at up to $10,000 per year, per foreign account as a penalty.

Taxpayers with foreign accounts need to come forward NOW and deal with this issue before it becomes a criminal tax issue.  If you have any questions about Foreign Bank Account Enforcement issues or criminal tax issues in Greenwich, Connecticut or elsewhere please feel free to contact me at (203) 285-8545 or by email at egreen@gs-lawfirm.com.

Eric L. Green

Green, & Sklarz, LLC

243 Tresser Boulevard, 17th Floor

Stamford, CT 06901

Ph. (203) 285-8545 x 102

Fax (203) 286-1311

egreen@gs-lawfirm.com

www.gs-lawfirm.com

New Haven, CT • Stamford, CT • New York, NY

 

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