More than 14,700 Americans have so far disclosed secret offshore bank accounts to the IRS (the US equivalent of HMRC) under a leniency program (aka Tax Amnesty) at the same time as UBS AG bank is about to give data on 4,450 accounts to the IRS.
UBS are handing over the details as part of an agreement reached between the US Treasury and the Swiss government. The IRS plans to use the Swiss agreement as a model to pursue banks and tax evaders in other financial centres around the world. It is reported that this is being done in close consultation with the UK, France and Italy. The IRS has so far identified 70 countries where it suspects bank accounts are being held to enable tax evasion. It is likely that the US will share information it gets with other tax authorities around the world.
Many professional observers are starting to echo the comment: “The days of banking secrecy are almost over.”
The partial Tax Amnesty, announced in March 2009, lets US taxpayers repatriate offshore assets and avoid prosecution by: paying back taxes; interest; and reduced penalties of 20% of a disclosed account’s assets (based on its peak value in the previous six years). Normally, the American taxman can seize the higher of $100,000 or 50% of an offshore account’s value – when the holder deliberately doesn’t disclose it. The penalty can apply each year that required (FBAR) Returns aren’t filed (e.g. after three years of non-compliance an account holder can owe 150 percent of the account’s value!).
UK tax residents who are also US citizens can face particular problems when considering how ot disclose tax irregularities in the UK. Badly managed Disclosures can have the reverse effect; leading to higher penalties, a Civil Investigation of Fraud enquiry or even prosecution.
Lynam Tax Enquiry Experts have substantial experience of the first Tax Amnesty (Offshore Disclosure Facility) and are already helping a number of taxpayers (including some US citizens and their agents) with the New Disclosure Opportunity.
For a free, private, no obligation consultation, call Paul Lynam today on 0845 643 9997