The new revisions to the US offshore voluntary disclosure initiative, which we posted on 6/18/14 “IRS Makes Changes to Offshore Programs; Revisions Ease Burden and Help More Taxpayers Come into Compliance“, now provides for and increased 50% FBAR Penalties for ‘Willful’ Non-Disclosers.
This group includes those individuals who have offshore bank accounts with a foreign financial institution which has been publicly identified as being under investigation, or is cooperating with a government investigation. IRS has published a list of those foreign financial institutions or facilitators.
The complete list is as follows:
1. UBS AG
2. Credit Suisse AG, Credit Suisse Fides, and Clariden Leu Ltd.
3. Wegelin & Co.
4. Liechtensteinische Landesbank AG
5. Zurcher Kantonalbank
7. CIBC FirstCaribbean International Bank Limited, its predecessors, subsidiaries, and affiliates
8. Stanford International Bank, Ltd., Stanford Group Company, and Stanford Trust Company, Ltd.
9. HSBC India
10. The Bank of N.T. Butterfield & Son Limited (also known as Butterfield Bank and Bank of Butterfield).
11. Sovereign Management & Legal, Ltd., its predecessors, subsidiaries, and affiliates (effective 12/19/14)
12. Bank Leumi le-Israel B.M., The Bank Leumi le-Israel Trust Company Ltd, Bank Leumi (Luxembourg) S.A., Leumi Private Bank S.A., and Bank Leumi USA (effective 12/22/14)
13. BSI SA (effective 3/30/15) . See our post BSI Becomes the First Swiss Bank to Settle With Under the U.S. Swiss Bank OVDP Program.
A list of foreign financial institutions or facilitators meeting this criteria is available.
Of course, the IRS may add names to that list at any time, and whole groups of taxpayers will then be cut-off from OVDP without prior notice.
The same goes for taxpayers who worked with a “facilitator” who helped the taxpayer establish or maintain an offshore arrangement if the facilitator has been publicly identified as being under investigation or as cooperating with a government investigation.
Taxpayers who had undeclared income from one of these 13 Banks are still be eligible to enter the OVDP, but they will be subject to a 50% offshore penalty, rather than the existing 27.5 percent penalty.
Of course if the IRS already has a particular taxpayer’s name, then that person will not be eligible to enter the OVDP, and could be subject to multiple FBAR penalties.
Do You Have Undeclared Income from One of the 13 Banks under Investigation by the IRS?
Original Post By: Ronald Marini