The IRS continues to investigate allegations of tax evasion through the use of foreign accounts.
The Internal Revenue Service (IRS) continues to pursue charges against individuals, banks and corporations under allegations of using foreign accounts to circumvent tax obligations. These efforts were highlighted when the IRS entered non-prosecution agreements with almost 80 Swiss banks.
More on the non-prosecution agreements: fines and accusations
A recent article in the Daily Tax Report reported on the agreement, noting the non-prosecution agreements (NPAs) allow the banks to avoid criminal charges in exchange for providing account information and paying a large fine. The fines are hefty, Bloomberg Business reports that Societe Generale SA and three other banks paid $2.2 million in penalties and Rothschild Bank AG, the Zurich-based bank, will pay $11.5 million. These fines pale in comparison to those who face criminal charges and are convicted or plead guilty. Credit Suisse Group AG's subsidiary, for example, pleaded guilty and paid a $2.6 billion fine.
The banks are accused of assisting United States citizens to hide assets and income to avoid tax penalties.
Criminal charges: banks and individuals
Daily Tax Report also reports that the United States has moved forward with criminal charges against foreign banking institutions. Thus far, 17 banks have been charged. Of these banks, 5 face criminal charges, 10 negotiated deferred prosecution agreements and 2 have agreed to NPAs. These investigations and the resulting agreements have also led to criminal indictments for 170 U.S. citizens and over two dozen foreign bank employees and investment advisors.
The Deputy Assistant Attorney General for Appellate and Review of the Tax Division of the Department of Justice also warns that taxpayers should not construe the "absence of public disclosure" as a "sign of inactivity." Instead, global enforcement efforts are underway that will likely lead to additional NPAs in the near future.
Foreign account holders: tips to avoid prosecution
The IRS will likely continue to investigate and move forward with charges of tax evasion for those who have foreign accounts that are not properly reported. The IRS does offer offshore voluntary disclosure programs that are designed to encourage taxpayers to disclose this information. Although taxpayers will likely face monetary penalties, they can reduce civil penalties and avoid prosecution as well as potential jail time.
Those who are considering moving forward with the voluntary disclosure program are wise to seek the counsel of an experienced tax attorney. This legal professional will review the details of your case and discuss your options, better ensuring a more favorable outcome.
Keywords: Tax law foreign accounts