The holes in which to hide for offshore tax cheats are steadily being filled up. Those who have not entered the IRS Offshore Voluntary Disclosure Program, will find no comfort in some recent news, namely:
- Bank Frey, the “Truly Swiss, Truly Private Bank,” is now Swiss-Cheese and its account holders perhaps not so private. The bank decided to close due to “unsustainable costs,” in its dispute with the U.S. Department of Justice as one of 14 banks currently under investigation for helping U.S. depositors evade U.S. income taxes.
- Raoul Weil, a former UBS top banker, was arrested in Italy and likely will be extradited to the U.S. to face charges of helping U.S. Swiss bank account holders evade U.S. taxes. The expectation is that Raoul will cut a deal to shorten his exposure to prison and name names of his former clients.
- Rahn & Bodmer Co. another old-line Swiss private bank among the 14 being investigated announced it is cooperating with the U.S. Department of justice in its investigation of U.S. foreign account holders.
- Credit Suisse and Julius Baer, two other of the 14, also have announced that they will likely pay a fine and deliver names of clients to the U.S. DOJ.
- In its continuing moves to end use of Swiss secret accounts for tax evasion, Switzerland on October 15, 2013 became the 58th country to sign the OECD Multilateral Convention on Mutual Administrative
Assistance in Tax Matters.
The above events are just some of the latest moves against offshore tax scofflaws. The posse continues to close in on those still thinking they can hide and not get caught. The OVDP provides a way out. The OVDP is a process that:
- Offers certainty that a participant will not be charged with a crime and that the civil FBAR penalty will be no more than 27.5% of the highest value in U.S. dollars of the participant’s offshore accounts during the eight-year OVDP.
- Allows a participant to repatriate and use remaining offshore funds that presently one offshore is likely afraid to access.
- Removes the cloud of fear hanging over one’s head about discovery.
- Does all of the above without tainting the participant’s name, identifying him or her as a felon and without disclosing to the public that the participant has entered the program.
For most the certainty provided in the OVDP is preferable to attempting a quiet disclosure or opting-in and then opting-out of the OVDP to gamble on obtaining a lower penalty. But, each case is unique and how to proceed in any one particular case requires careful analysis of the law and facts and use of sound judgment.
© 2013 by Robert S. Steinberg, Esquire
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