The tax attorneys at Nardone Law Group continue to monitor the latest developments in the Internal Revenue Service’s (“IRS”) efforts to uncover taxpayers with undisclosed foreign accounts, assets, or entities. In our prior article providing an update regarding the U.S. and Switzerland Reaching Agreement on Tax Evasion Investigations, we explained that certain Switzerland-based financial institutions would begin reporting U.S. taxpayers’ accounts to the IRS. This article explains that the IRS and the United States Department of Justice (“Justice Department”)—bolstered by the agreement with the Swiss government—continues to focus on undisclosed Swiss bank accounts. In fact, the IRS and Justice Department are not only targeting individual account holders, but also the large financial institutions that assist those individuals in concealing foreign accounts, assets, and income. For instance, the Justice Department recently pressed the large Swiss financial institution, Credit Suisse, into pleading guilty to charges of conspiracy to aid and assist U.S. taxpayers in filing false income tax returns and other forms with the IRS. Below is a summary of the IRS’ efforts and success in prosecuting Credit Suisse, and the important signal that sends for non-compliant taxpayers.
Under the plea agreement, Credit Suisse must pay a total of $2.6 billion in restitution and other penalties. The plea agreement resulted from years of IRS and Justice Department investigation into the large Swiss financial institution. The investigation also lead to indictments of eight Credit Suisse executives, two of which have already plead guilty to charges related to assisting U.S. taxpayers in skirting their U.S. tax reporting and payment obligations related to foreign accounts, assets, and income. This is just one more example of the IRS’ and Justice Department’s continuing efforts to track down and prosecute noncompliant taxpayers and cooperating financial institutions regarding hidden foreign accounts, assets, and income. Surely, it is only a matter of time before the IRS and Justice Department begin to investigate and prosecute the various individual account holders of Credit Suisse who were involved in these evasive and covert schemes to dodge tax reporting and payment responsibilities. Thus, this update underscores Nardone Law Group’s continued message to taxpayers: the time is now to take advantage of the IRS’ Offshore Voluntary Disclosure Program to come into compliance with federal tax reporting and payment obligations for foreign accounts, assets, and entities.
Because of the IRS’ continued and increasing efforts to combat tax evasion through use of foreign accounts, assets, and entities, now is the time for taxpayers with undisclosed foreign accounts, assets, and entities to come forward. The proper way to do so is through the Offshore Voluntary Disclosure Program, which provides noncompliant taxpayers a life-line to limit the otherwise onerous civil penalties and risk of criminal prosecution. But, importantly, taxpayers who the government has contacted regarding investigation of their undisclosed foreign accounts, assets, or entities are ineligible for the protection the Offshore Voluntary Disclosure Program offers. Accordingly, taxpayers with foreign accounts, assets, or entities or that must be disclosed pursuant to FATCA—and now particularly those based in Switzerland—should act swiftly to enter the Offshore Voluntary Disclosure Program, or risk being precluded by government contact. Simply put, the Offshore Voluntary Disclosure Program provides the best means for taxpayers to become compliant with foreign account, asset, and entity reporting and tax payment obligations, and to limit the risk of criminal prosecution for past noncompliance.
Contact Nardone Law Group
The tax attorneys at Nardone Law Group routinely advise clients in Columbus, Ohio and throughout the country about their federal tax reporting and payment obligations and ways to comply with federal tax law, including compliance with laws governing foreign accounts, assets, and entities. If you have questions about your federal tax reporting or payment obligations under FATCA concerning foreign accounts, assets, or entities, you should contact an experienced tax attorney. Our experienced tax lawyers will thoroughly review your case to determine what options and alternatives are available. Contact us today for a consultation to discuss your case.