The Death Of Hidden Offshore Accounts
The future for offshore tax planning, also known as “aggressive tax planning” is likely to be limited to if not curtailed by the global exchange of information agreement signed in October, 2014 by 51 countries and growing. The link below is to a video summary of the predicted consequences of the new agreement.
What is important for U.S. taxpayers to understand is that 77,000 offshore financial institutions are already in the process of providing U.S. taxpayer held account information to the IRS under the provisions of the Foreign Account Tax Compliance Act (FATCA). The FATCA information exchanges will begin this year and are not affected by other international agreement commencement dates.
U.S. taxpayers with offshore financial accounts must report those accounts under the Bank Secrecy Act by filing an FBAR (FinCen Form 114) by June 30th assuming that the account(s) exceed the minimum reporting requirement of $10,000 in the aggregate. In addition the Internal Revenue Code requires separate reporting of “specified foreign financial assets” on Form 8938. For U.S. taxpayers who are delinquent in their reporting for prior years there are the following options.
1. Apply to enter the Offshore Voluntary Disclosure Program
2. File under the Streamline Procedures
The requirements of either program vary and there can be very serious consequences including criminal prosecution for either not coming forward or making false or incomplete statements. Competent and experience counsel is necessary to guide U.S. taxpayers through the matrix of choices and options. The key is to come forward before the information is disclosed or the financial institution is the subject of a U.S. Department of Justice investigation. Time is not on the side of the delinquent taxpayers. We at MillarLaw, are able to provide clear and expert advice on past, and current offshore financial planning and disclosure.
