Last year the Justice Department announced that Swiss banks had until Dec. 31, 2013 to submit letters of intent regarding the providing of U.S. taxpayer account information. Any U.S. citizen with accounts in these banks will likely have their account information provided to the federal government. Anyone with foreign accounts larger than $10,000 must report the account.
Many U.S. residents will likely face criminal prosecution concerning unreported offshore accounts information. The penalties that could result from non-disclosure could be significant. Individuals could face tax fraud, filing a false tax statement or tax evasion and failing to file the form disclosing offshore accounts (known as FBAR).
The Justice Department seems determined to pursue both foreign banks and American account holders accused of hiding funds in these banks. The IRS also has a number of tools at its disposal. Federal court rulings have authorized the IRS to serve what are called "John Doe" summonses on certain foreign banks to obtain information about U.S. citizens and residents with offshore accounts.
The crackdowns on U.S. taxpayers began in 2009 and prosecutions have already occurred for individuals in Florida, New York and California. If anyone has questions concerning the offshore accounts or have been accused of hiding assets overseas, they would greatly benefit by speaking to attorneys experienced in representing clients regarding this matter. Such attorneys may be aware of certain legal options provided by the Justice Department. At the same time, certain options could quickly disappear should the Justice Department or IRS change their mind. At present, a person may enter the Offshore Voluntary Disclosure Program (OVDP) and avoid criminal prosecution. Once the IRS receives the account records from the foreign bank, that option is not available if the application to the OVDP has not yet been filed.
As pressure upon foreign banks is continuing, disclosures regarding account information will likely be coming from more than just Swiss banks. Unfortunately, the price is far too high for citizens to be prosecuted concerning such matters. No taxpayer should choose to face federal officials alone.
Source: The United States Department of Justice, "First Deadline Approaches for Participation in the Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks," Dec. 12, 2013