International Banks Under Investigation
IRS Offshore Accounts
International Banks Under Investigation
The Internal Revenue Service (IRS) and the United States Department of Justice (DOJ) have been aggressively investigating and negotiating with various banks around the world. Thorn Law Group has the most up-to-date information concerning how these on-going investigations can affect U.S. persons affiliated with these banks concerning undisclosed off shore banks accounts.
U.S. taxpayers who own or have custody of accounts held at foreign banks have disclosure obligations under federal law. These disclosure obligations apply specifically to foreign bank accounts (and other foreign financial assets), and failure to comply with these obligations can trigger civil or criminal penalties. As a result, if your foreign bank is under investigation and you have concerns about compliance, you should consult with an experienced IRS disclosure lawyer promptly.
Foreign Banks May Be Required to Provide Accountholder Information to the IRS
When targeted by the IRS, foreign banks may be forced to disclose accountholder information to avoid sanctions and other penalties. As a result, taxpayers who hold offshore bank accounts can find themselves facing scrutiny as well—and those that have not properly disclosed their offshore bank accounts to the IRS can face serious consequences.
The consequences of failing to disclose offshore bank accounts to the IRS depend on the circumstances (or alleged circumstances) involved. Here are some key considerations:
- Disclosure Obligations Under the BSA and FATCA – The Bank Secrecy Act (BSA) and Foreign Account Tax Compliance Act (FATCA) establish offshore account disclosure obligations for U.S. taxpayers. Taxpayers must comply with both of these statutes annually—they cannot rely on their banks to make disclosures for them.
- Account Value Thresholds Apply – Taxpayers who hold small offshore accounts may not be required to make BSA and FATCA disclosures. However, the thresholds under both statutes are based on taxpayers’ aggregate account values. Other foreign financial assets may also count toward the thresholds.
- Civil Penalties Apply to Non-Willful Violations – Taxpayers who were unaware of their disclosure obligations or made inadvertent filing errors can face civil penalties under the BSA and FATCA.
- Criminal Penalties Apply to Willful Violations – Taxpayers accused of intentionally attempting to hide their offshore assets from the IRS can face criminal penalties—including substantial fines and federal prison time.
- Foreign Banks Will Put Their Interests First – When facing scrutiny from the IRS, foreign banks will put their interests first. They will provide their customers’ account information if compelled to do so, and once the IRS has received U.S. taxpayers’ account information from any source, it can use that information to pursue both civil audits and criminal investigations.
If you are concerned about the IRS obtaining information about your foreign holdings, we can help. If the IRS has not yet obtained information about your holdings, you may be eligible to submit a streamlined filing or voluntary disclosure. These are options for voluntarily coming into compliance and avoiding the risks of an audit or investigation.
If it is too late to submit a streamlined filing or voluntary disclosure, we can deal with the IRS (and the DOJ, if necessary) on your behalf. We have extensive experience representing U.S. taxpayers in audits and investigations involving offshore bank accounts, and we can use that experience to help protect you by all available means.
In all cases, time is of the essence. To ensure that we can help protect you to the fullest extent possible, contact us today.
Contact Us for More Information
Please contact IRS disclosure lawyer, Kevin E. Thorn, at ket@thornlawgroup.com or (202) 270-7273 for more information regarding the content of these releases.