At the recent American Bar Association meeting held on January 29, 2016, the acting Attorney General for the tax division disclosed that the IRS and US Department of Justice are now focusing bank investigations in Belize, the British Virgin Islands, Cayman Islands, the Cook Islands, India, Israel, Liechtenstein, Luxemburg, the Marshall Islands and Panama, to name a few. The heat is on and the US government is pursuing both civil and criminal enforcement efforts to pursue taxpayers who continue to conceal foreign accounts and assets and evade their US tax obligations. The government has encouraged financial institutions and individuals who have engaged in criminal conduct to contact the US Department of Justice to discuss their options.<\/p>\n
In September, the US District Court for the Southern District of Florida authorized the issuance of \u201cJohn Doe\u201d summonses to Citibank and Bank of America to produce records identifying US taxpayers with offshore bank accounts in Belize. The \u201cJohn Doe\u201d Summonses sought information regarding US persons who hold offshore accounts at Belize Bank International Limited and Belize Bank Limited (the \u201cBelize Banks\u201d). These summonses permit the IRS to seek records of the Belize Banks\u2019 correspondent accounts at Bank of America, N.A. and Citibank, N.A.<\/p>\n
Pursuant to the summonses, Bank of America and Citibank have been directed to produce records which identify US taxpayers with accounts at the Belize Banks. The court also granted permission to the IRS to seek records of Corporate Services\u2019\u00a0correspondent accounts at Bank of America and Citibank, as well as information related to Corporate Service\u2019s deposit account at Bank of America. The \u201cJohn Doe\u201d class includes US taxpayers, who at any time from 2006 through 2014 had interests in, or authority with respect to, any financial accounts maintained at, monitored by, or managed through the Belize Entities. The IRS believes that these John Doe summonses will enable it to ascertain the identity of US taxpayers that it believes are using the Belize Entities and correspondent accounts to avoid their obligation to report and remit associated taxable income to the United States.<\/p>\n
Taxpayers who desire to disclose to the Service a foreign account have a choice between the OVDP, the latest iteration of which is an open-ended program that began in January 2012 (modified in 2014), and the newer streamlined procedures, offered beginning in 2012 and also modified in 2014 to accommodate a broader group of US taxpayers. \u00a0The OVDP remains the safest and most foolproof program, with amnesty even for willful acts.\u00a0But for those with the right facts, the IRS\u00a0Streamlined program<\/a>\u00a0for non-willful violations is far simpler and much less costly.\u00a0 The Streamlined programs came with\u00a0the\u00a02014 improvements to the OVDP<\/a>,\u00a0which sparked and renewed interest in cleaning up offshore accounts.<\/p>\n The two programs have been very successful: Since commencement, the U.S. has collected more than $13.5 billion from individuals and financial firms in taxes and penalties due on offshore accounts.<\/p>\n The two programs are mutually exclusive, and a taxpayer must choose between them. The key difference in participating in the streamlined procedures requires a certification of non-willfulness. A false certification filed under the streamlined procedures could lead to possible criminal liability. Most US taxpayers who enter the IRS OVDP to resolve undeclared offshore accounts will pay a penalty equal to 27.5 percent of the high value of the accounts. The IRS updated its\u00a0list of foreign banks<\/a>\u00a0where accounts trigger a 50% (rather than 27.5%) penalty in the IRS\u2019s long-running Offshore Voluntary Disclosure Program (OVDP<\/a>). This penalty is based on the highest account balance measured over up to eight years.<\/p>\n Whether a taxpayer\u2019s conduct is non-willful is a critical question of fact and law, based largely on the taxpayer\u2019s particular facts and circumstances. Taxpayers with foreign accounts would be wise to retain experienced tax legal counsel, to better analyze the taxpayers\u2019 position and recommend one of the two programs.<\/p>\n","protected":false},"excerpt":{"rendered":" At the recent American Bar Association meeting held on January 29, 2016, the acting Attorney General for the tax division disclosed that the IRS and US Department of Justice are now focusing bank investigations in Belize, the British Virgin Islands, Cayman Islands, the Cook Islands, India, Israel, Liechtenstein, Luxemburg, the Marshall Islands and Panama, to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_daextam_enable_autolinks":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[1],"tags":[52,54,63,68,25,26,86,27],"class_list":["post-1383","post","type-post","status-publish","format-standard","hentry","category-planning-for-tax-minimization","tag-offshore","tag-offshore-accounts","tag-ovdi","tag-ovdp","tag-penalties-and-interest","tag-sdop","tag-sfop","tag-voluntary-disclosure"],"_links":{"self":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1383","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/comments?post=1383"}],"version-history":[{"count":1,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1383\/revisions"}],"predecessor-version":[{"id":1384,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/posts\/1383\/revisions\/1384"}],"wp:attachment":[{"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/media?parent=1383"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/categories?post=1383"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/patellawoffices.com\/blog\/wp-json\/wp\/v2\/tags?post=1383"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}