The Offshore Voluntary Disclosure Program (OVDP) has been recently updated. Our Fort Lauderdale and Miami tax attorneys can assist you during your disclosure process and advise you on the best course of action for you situation. Not to mention that FATCA goes into effect July 1, 2014. In light of the Modified 2012 Offshore Voluntary Disclosure Program (2014 OVDP) and the Financial Account Tax Compliance Act (FATCA) deadlines, it is clear the IRS is cracking down on offshore tax evasion. One major change to the program is the increase in the Miscellaneous Title 26 offshore penalty from 27.5% of the total account assets to 50% of the total account assets.
The miscellaneous offshore penalty increases to 50% if the taxpayer has or had an undisclosed foreign financial account or established with the help of a facilitator where either the facilitator or the financial institution has been public identified as being under investigation or cooperating with the an investigation.
The July 1, 2014 Deadline Is Quickly Approaching
August 4, 2014 triggers the 50% increase so taxpayers have to enter the OVDP before July 1, 2014! The only way to avoid this increase is to enter the OVDP before July 1, 2014.
Once your bank goes public, you will be subject to the 50% penalty. This is because the IRS has determined that, once a bank goes public, your disclosure is no longer "voluntary." Higher penalties, including the 50% penalty, will be imposed and possible jail time may apply. Also, this penalty is just one penalty that will be imposed in conjunction with other penalties that add up quickly.
The way to minimize the risk of higher penalties and possible jail time is to contact an experienced and qualified tax attorney to help analyze and assess your international tax compliance issues. Our international tax lawyers can help you take the necessary steps to properly apply to the OVDP and begin the process of becoming tax compliant.
Is Your Bank on the List?
Located on the IRS website is a list of financial institutions and facilitators that have been "publicly identified"
1. UBS AG
2. Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.
3. Wegelin & Co.
4. Liechtensteinische Landesbank AG
5. Zurcher Kantonalbank
6. Swisspartners Investment Network AG, Swisspartners Wealth Management AG, Swisspartners Insurance Company SPC Ltd., and Swisspartners Versicherung AG
7. CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates
8. Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.
9. The Hong Kong and Shanghai Banking Corporation Limited in India (HSBC India)
10. The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield), its predecessors, subsidiaries, and affiliates.
Don't wait! This list will grow and once your financial institution or facilitator is added, it will be too late. If you have an account or other assets in any of these institutions, the 50% penalty will be imposed. You should contact a tax attorney and begin discussing your situation as soon as possible.