Is another Amnesty in the Works? The attack on Tax Havens and Tax Evasion Continues


IRS Commissioner Shulman announced this week that the IRS is seriously considering offering a new Offshore Voluntary Compliance Initiative (OVCI). The last OVCI expired in October 2009 and produced a total of 18,000 filings according to the Commissioner. There was ample reason to have filed under the 2009 OVCI not the least of which were a waiver of criminal prosecution and a limit on the FBAR penalty to 20% of a single year account balance, plus the tax and interest and an accuracy related penalty on the tax. Since October 2009, the U.S. and Swiss government signed an amendment to the U.S.-Swiss Information Exchange Agreement allowing for the U.S. to request information on all U.S. account holders, by class, as opposed to individual designation with a cause showing. This amendment was a paradigm shift in bank secrecy law application. The Swiss had a 200 year history of maintaining depositor account information in confidence and with the amendment that all but disappeared as between nation states. The amendment was challenged in the Swiss courts, but the Swiss highest court said that a treaty provision was enforceable over domestic law. The result is that another 4,450 account holders will and are finding that their account information is being delivered to the IRS. Some of the account holders will be subject to criminal prosecution. Some taxpayers will find themselves subject to FBAR penalties both civil and criminal and tax penalties both civil and criminal. So why another amnesty offer?

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Published In: Criminal Law Updates, Finance & Banking Updates, International Trade Updates, Tax Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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