Is the IRS Voluntary Disclosure Program for You


For many years, the usual practice among wealthy Americans who wanted to evade taxes was to open a foreign bank account in countries like Switzerland, famed for its tax secrecy laws and low income tax rates. The IRS requires that all who have a foreign bank account fll up a Foreign Bank and Financial Accounts Report (FBAR). The FBAR is to be fled by June 30 for accounts in existence as at December 31 the previous year. Failure to fle your FBAR will attract a fne of $10,000 unless it can be proven that the omission was due to reasonable cause and that the amount in the foreign bank account at the time was reported.

But if not fling the FBAR was done willfully, the fne increases to $100,000 or 50% of the balance in the account at the time of violation. Furthermore, if the violation was willful and the amount unreported was material, you might be prosecuted Internal Revenue Code 7201 (tax evasion) or IRC 7206 (fling a false tax return). Such prosecutions usually lead to convictions, a prison term and restitution.

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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.

© Darrin Mish, Tampa Tax Attorney, The Law Offices of Darrin Mish, P.A. | Attorney Advertising

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