Prison Time Could Result from Undisclosed Offshore Accounts
Posted in Featured, Hot Topics, News, Offshore Account Update on September 16, 2014 | Share
The Internal Revenue Service and the Justice Department have been making a major effort to crack down on offshore accounts that U.S. citizens do not declare. In addition to allowing tax payers to face reduced penalties if they voluntarily report these accounts through an Offshore Voluntary Disclosure Program (OVDP), the authorities have been making deals with Swiss banks to turn over information on accounts in exchange for lesser penalties or avoiding prosecution.
The risk of financial penalties if your undisclosed offshore accounts are discovered may be enough to prompt you to come forward and participate in OVDP. However, the federal government also wants to push more prison time for violators of tax laws requiring reporting of offshore investments. You don’t want to take a chance of being sent to jail, so you should contact an experienced Washington DC tax attorney as soon as possible to learn about your options if you have undisclosed offshore funds.
Federal Government Pushing More Prison Time
Forbes magazine recently published an article about the prosecution of one billionaire who has been hit with significant penalties as a result of his foreign accounts. Ty Warner, who created Beanie Babies, pled guilty to criminal charges for offshore Swiss accounts that were not declared. He paid $53 million to the government as part of his case. Despite this huge recovery, prosecutors were angry that he was only sentenced to probation and not to jail time.
The federal government wants to make an example of Ty Warner as a lesson to others that they should not take a chance of nondisclosure. As a result, the government is appealing the sentencing. It is rare for governments to appeal in these types of situations, but federal authorities reportedly do not want to appear as if they are going easy on the rich.
As Forbes points out, the federal government has lost very few cases arising from nondisclosure of offshore funds. The Foreign Account Tax Compliance Act (FATCA) is giving the government even more ammunition to go after U.S. citizens who may not be reporting all of their income. Under FACTA, foreign banks have to reveal Americans who have accounts valued at more than $50,000.
Taxpayers fearing that they will be found out have also come forward in large numbers to take advantage of OVDP, notes Washington DC tax attorney Kevin Thorn. In the five years since amnesty programs have been offered to allow taxpayers to limit penalties, almost 50,000 people have participated and more are still coming forward.
If the government is successfully able to appeal the sentence and the Beanie Babies creator actually goes to jail for his failure to report his offshore accounts, this could serve to encourage even more people to voluntarily tell the IRS about their offshore investments before they too end up being prosecuted and facing the potential of incarceration.
If you believe you may be eligible for amnesty and you are concerned about the legal risks you face, it is a good idea to talk to a Washington DC tax attorney at Thorn Law Group as soon as possible for guidance and advice about whether voluntary disclosure is a good choice for you.