Unfiled FBAR at one of these banks? Time has run out! – UBS, Credit Suisse, Landesbank, Butterfield, HSBC India, CIBC FirstCaribbean, Kantonalbank, SwissPartners…
In seven days, the amnesty rules change dramatically for folks with unreported offshore accounts in certain banks. As of July 1st, the IRS unveils a new amnesty program for unreported foreign bank accounts. Called OVDP 2014 (Offshore Voluntary Disclosure Program), the new plan increases penalties for people with unreported accounts at the following banks:
- UBS
- Credit Suisse
- Credit Suise Fides
- Clariden Leu
- Wegelin & Co
- Liechtensteinische Landesbank
- Zurcher Kantonalbank
- Swisspartners Investment Network
- Swisspartners Wealth Management
- Swisspartners Insurance Company
- CIBC FirstCaribbean International Bank
- Stanford International Bank
- Stanford Trust Company
- HSBC India
- Butterfield Bank
In prior posts we have warned taxpayers that the IRS and Justice Department was likely investigating these banks (use our search feature on our Due Diligence blog to read about specific banks). Now under new rules announced last week, the IRS says that if you have a foreign account at one of these banks and have not filed required FBARs, reduced amnesty penalties probably won’t be available as of July 1st.
Taxpayers with foreign accounts must report those accounts annually if the aggregate balance of those accounts exceeds $10,000. Even if the balance exceeds the $10,000 threshhold for just one day, FBAR forms must be filed. FBAR is a Treaury Department form more formally known as a Report of Foreign Bank and Financial Accounts.
Why is the IRS taking such drastic action? We are not sure but in recent years the IRS has dramatically ramped up its enforcement efforts and is targeting unreported offshore accounts worldwide.
The IRS is reducing some penalties but at the same time increasing penalties for accounts at certain banks. The government says that account holders have had several years to take advantage of existing amnesty programs.
We don’t agree with the huge 50% penalties being imposed but those penalties have become the new norm. Unlike most penalties which are based on the amount of unpaid tax, the new FBAR penalties are based on the account itself. A $200,000 Swiss account will yield a $100,000 penalty!
No one one knows exactly what will happen after July 1st. There is a tiny window right now, however, to come into compliance and potentially avoid the worst of the penalties. Again, the banks and financial innstitutions on the IRS target list are:
- UBS
- Credit Suisse
- Credit Suise Fides
- Clariden Leu
- Wegelin & Co
- Liechtensteinische Landesbank
- Zurcher Kantonalbank
- Swisspartners Investment Network
- Swisspartners Wealth Management
- Swisspartners Insurance Company
- CIBC FirstCaribbean International Bank
- Stanford International Bank
- Stanford Trust
- Butterfield Bank
- HSBC India
If you have an unreported foreign bank or financial account at one of these banks, contact an experienced FBAR lawyer, CPA or expat tax service TODAY. This may be your last opportunity.
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For more information, contact attorney Bethany Canfield at or by telephone at (414) 223-0464. All inquiries are kept in confidence.