Offshore Bank Account Report (FBAR)
Will I get caught?
Yes–
- The IRS has served subpoenas on International Visa and Master Card to find users of offshore-credit-cards. click here offshore-credit-cards.
- The IRS commissioner has also made finding and auditing offshore account owners a priority.
- Treasury arrest a Swiss Banker and forced the disclosure of US taxpayers.
- The G20 have agreed to go after the “dirty little tax havens” in the Caribbean and elsewhere to force automatic disclosure of U.S. taxpayers with accounts.
The form is here. f90221
What are the penalties for an undisclosed foreign bank account?
The answer is that the penalties, both criminal and civil, are huge.
The penalties are:
- Failure to File Penalty – up to $250,000 and/or up to 5 years in prison for any person “willfully violating” the requirements to file. (31 CFR 5322a penalty)
- Fraud Penalty – up to $500,000 and/or up to 10 years in prison for any person “willfully violating” the requirements to file “as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period.” (31 CFR 5322b penalty)
- False Information Penalty – fine or up to 5 years in prison for any person providing false, misleading, fictitious, or fraudulent statements on TD F 90-22.1; or up to 8 years in prison if the false information involves domestic or foreign terrorism. (18 CFR 1001 penalty)
Foreign corporations used in a tax evasion schemes to create service charges for U.S. corporations or add to the cost basis of goods sold by the U.S. corporations. These bogus charges are then kicked back through foreign bank accounts to the U.S. corporation or their shareholders. This loophole is also covered because a foreign corporation regularly doing business in the U.S. must also report–or it and its shareholders will face the same stiff penalties.
Further, using foreign nationals or other schemes, to sneaked kick backs back into the U.S. to buy real estate or other investments is, among other things, criminal tax evasion and money laundering. Such schemes demonstrate “willful violations” of the FBAR rules, subjecting the participants to the maximum fines as well as criminal penalties.
Finally, because of the possibility of criminal prosecution, you should hire a tax attorney who then hires a tax preparer because a CPA’s immunities do not include criminal tax evasion. For a consultation about undisclosed offshore corporations and personal bank accounts, please contact us to set up an appointment. Your interview will be held in strict confidence.