by Brian Mahany
Anyone who reads this blog (30,000 per month visit) know that I have been sounding the alarm for those with unreported offshore accounts for many months. One of the first things most people ask me is, “Will I get caught?” It’s a great question and absent a crystal ball, one I can’t answer with any finality. The discussion then centers on the myriad of ways that one might get caught. The recent HSBC announcement to close accounts adds one more scenario to that list.
HSBC bank, a leader in offshore banking, recently announced it was no longer going to provide offshore accounts for US clients. The recent criminal indictments of bankers and the John Doe subpoena given to HSBC India by Uncle Sam just got too much for the bank. Customers were given just one month to transfer their account. Unfortunately, transferring monies, including by wire transfer, often triggers more reporting requirements.
It’s going to be difficult for these account holders to bring back their money to the US undetected and the letter being sent to account holders means they can no longer claim they didn’t know about offshore reporting. HSBC agreed to send letters encouraging clients to report their accounts. Those letters, however, eliminate any ignorance defense that an account holder may have had.
In other words, by closing the accounts, HSBC is pretty much forcing their former account holders to report or face huge penalties and possible prosecution.
If you have an account at HSBC, or any other foreign bank account, and have not reported the account or income from the account or both, you must act now. The IRS’ offshore tax amnesty program, called the Offshore Voluntary Disclosure Initiative or “OVDI” ends in August. Participants must have completed the process by then or at least be able to demonstrate substantial completion. The process is much more than filing a simple form. If you don’t want to face losing half your account balance or more, you must act immediately.
We can’t emphasize the time factor here. Even if you are sitting on the fence, talk to us. We are happy to explain the program AND the alternatives, all without cost or obligation.
Dual nationals, foreign born Americans and people who inherited foreign accounts may all have reporting requirements.
Attorney Brian Mahany can be reached directly at (414) 704-6731 (direct) or by email at . Mahany & Ertl, LLC is a leading boutique law firm that concentrates in tax and offshore tax matters. Our team of tax attorneys can help with a wide variety of tax reporting and compliance matters including the filing of reports of foreign bank and financial accounts (FBAR’s). Call us today.
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