Navigating Tax Compliance with a Texas Offshore Account Attorney
It is not illegal for U.S. citizens to have foreign bank accounts. There are many legitimate reasons for a U.S. taxpayer to maintain a foreign bank account, including confidentiality, portfolio hedging and asset protection.
However, U.S. taxpayers who have offshore or foreign accounts must adhere to certain requirements. They must report the existence of these accounts as well as income from these accounts on their U.S. income tax returns. They must also declare any offshore or foreign bank accounts over which they have signature authority, regardless of whether they receive any income from the account.
For many years, numerous taxpayers holding offshore or foreign bank accounts have not disclosed the existence of accounts or claimed income from them on their income tax returns. These taxpayers felt comfortable that the U.S. government could not obtain information about their accounts from foreign financial institutions.
Recently, things have changed.
The IRS and the U.S. Department of Justice have focused a great deal of effort on offshore compliance and pursuing criminal and civil penalties against individuals who have not disclosed the existence of their offshore accounts or reported the income from these accounts.
This is especially evident in the number of civil and criminal investigations widely covered in the media, including the ones listed below:
- German investigation of Credit Suisse
- U.S. investigation of HSBC
- U.S. investigation of Swiss banking giant UB
It is a top priority of the current administration in Washington, D.C. to capture the revenue lost to the Federal government through the use of and non-reporting of offshore accounts and the income derived from them. The IRS has increased the number of audits in this area and is hiring more staff with expertise in international tax investigations. Legislation has been passed and is pending in both the House and the Senate that would provide tools to help increase the ability of the IRS to enforce these tax laws.
Why You Need a Texas Offshore Account Attorney: Staying Compliant with Evolving Tax Laws
At Brown, PC, we have a comprehensive understanding of the rapidly changing laws and policies that affect people with substantial monetary holdings and assets in the U.S. and overseas. With offices in Dallas-Fort Worth, Texas, and Washington, D.C., our nationwide practice is dedicated to protecting the rights of these individuals. We are focused on bringing your offshore bank accounts into compliance with government regulations while minimizing the potential consequences you may face. We represent clients across the United States- from Boston to Atlanta to Los Angeles – as well as American citizens who live and work abroad.
Contact a Texas Offshore Account Attorney
If you have an offshore account that you have not previously disclosed to the IRS, we urge you to contact our law firm for a confidential consultation with a lawyer. Please call attorney Lawrence Brown of Brown, PC, toll free at 888-870-0025 or contact us online.
German Investigation of Credit Suisse
The United States has recently launched investigations of banks such as HSBC and UBS, preparing to take civil and criminal action against Americans with offshore accounts who fail to pay required U.S. taxes. Germany appears to be following the U.S. lead regarding enforcement in the area of undisclosed offshore accounts and unreported offshore income.
In July, German authorities raided 13 Credit Suisse branches in an effort to target and investigate Credit Suisse staff suspected of advising clients on how to evade taxes through the use of offshore accounts. The raids on the second largest Swiss bank were instigated by German authorities who, earlier this year, acquired information that lead to the opening of investigations on wealthy Credit Suisse account holders.
The investigators hope to spur a large-scale movement through international tax authorities to diminish tax evasion worldwide through the use of Swiss private banks. If you hold an international bank account and are concerned about your tax liability, contact an experienced attorney as soon as possible.
At Brown, PC, attorney Lawrence Brown is a former Justice Department Tax Division trial attorney with over 20 years of experience handling tax controversies. Mr. Brown has tried more than 500 cases to verdict and has tried over 100 cases before a jury, building the knowledge, experience and skill to achieve favorable outcomes for clients facing involvement in investigation of offshore or foreign bank accounts.
U.S. Actions Against the Use of Offshore Accounts
It is clear that the United States and other major industrialized nations are focusing more resources on stopping international tax evasion through the use of offshore accounts. The gold standard in the area of banking secrecy (Swiss banking) has been cracked by the United States in the UBS case. The United States has forced UBS to turn over names of account holders. The U.S. is also investigating other major offshore banks including HSBC.
The Voluntary Disclosure Program
The Internal Revenue Service created the IRS Offshore Settlement Initiative Voluntary Disclosure Program. This amnesty program is designed to encourage taxpayers to come forward and disclose money in offshore accounts. Although the deadline for entry into the amnesty program has passed, there are a number of strategies available to avoid prosecution of and limit civil liability for holders of previously undisclosed offshore accounts.
Individuals who have disclosed the existence of offshore accounts through the IRS Voluntary Disclosure Program have nothing to worry about. If you hold an offshore account that you have not previously disclosed, and you have not reported the income there from, seek legal advice as soon as possible.
U.S. Investigation of HSBC
Recently, HSBC, one of the world’s largest banks, came under the microscope of the United States Department of Justice and the Internal Revenue Service.
The investigation began when a Virginia doctor returning from Switzerland lied to customs agents who asked if the doctor had mailed any cash to himself in the U.S. Two weeks later, law enforcement officials raided the doctor’s home and seized the 250,000 dollars in U.S. currency that the doctor sent from Europe to himself after he had been advised that HSBC would be closing the Swiss account that he had inherited in 1997.
This is just the beginning of the investigation into HSBC’s worldwide operations. It has been reported that the U.S. government is looking into HSBC accounts in Asia as well. The U.S. government seems to be committed to bringing all U.S. taxpayers with undisclosed offshore accounts into compliance one way or the other.
After the HSBC Investigation: What Comes Next?
It is highly possible that the government’s investigation of HSBC is only the first part of a series of enforcement efforts. The United States has demonstrated through investigation of other banks, such as Swiss banking giant UBS, that it takes misuse of offshore financial institutions by Americans very seriously.
Current clients who have already been accepted into the Voluntary Disclosure Program have nothing to fear. However, any U.S. taxpayer who has not yet disclosed a foreign bank account located in any offshore location, particularly in HSBC, should contact an attorney immediately in order to avoid or minimize criminal and civil liability.
United States Investigation of Swiss Banking Giant UBS
In June 2007, the United States government launched a civil and criminal investigation against Swiss banking giant UBS AG (“UBS”) and its U.S. account holders, many of whom had allegedly violated United States law by failing to disclose the existence of offshore accounts valued at $10,000 or more on their individual tax returns.
The U.S. government agreed not to prosecute UBS for its actions in assisting U.S. taxpayers evade U.S. taxes through the use of offshore accounts, resting on the condition that UBS disclose the names and account details of its 4,450 largest accounts held by U.S. citizens suspected of tax evasion.
The legal process surrounding this disclosure order was fraught with disagreement. The parties used international tax law to protect their interests and rights:
- Shortly after this agreement was reached, however, a Swiss Court issued a ruling temporarily blocking the agreement between UBS and the U.S. government.
- On June 15th, the Swiss Parliament voted to effectively overturn the Swiss Court’s ruling blocking the agreement between UBS and the U.S. government and giving the green light to UBS to disclose the names that it had agreed to disclose.
- UBS has spent the month of July gathering the information required by the United States under the agreement. It is very likely that UBS will turn over the names of over 4,500 United States taxpayers holding offshore accounts at UBS.
For UBS account holders who have already come forward through the Voluntary Disclosure Program, these events should not be a concern. For individuals holding offshore accounts at UBS or any other offshore financial institution the writing on the wall is clear: You could face serious criminal and civil penalties.
I’m Holding an Offshore Account. Am I Violating U.S. Tax Laws?
If you have an offshore account with UBS that you have not disclosed previously, time is of the essence. Seek legal advice immediately from an experienced tax lawyer who is familiar with the law on offshore bank account enforcement.
Voluntary disclosures are subject to strict rules and guidelines. As extremely complex and sophisticated documents, they require strict attention to detail in order to be completed accurately. Mistakes in completion can lead to more potential harm for offshore account holders.
Although the Amnesty Program has ended, at Brown, PC, we continue to use the voluntary disclosure provisions of the Internal Revenue manual to help protect individuals from the threat of criminal prosecution.