This is a natural question for an OVDP International Tax Attorney: in light of the ongoing U.S. Department of Justice (“DOJ”) The Program for Non-Prosecution Agreements or Non-Target Letters for Swiss Banks (the “Program”), should every U.S. taxpayer with undisclosed Swiss accounts enter the Program?
As everything in international tax law, the answer of whether you should enter the OVDP program after receiving a letter from the Swiss Bank is not that simple and depends (as any good OVDP International Tax Attorney will tell you) on the particular circumstances of your case. The article below is not intended to give legal advice, but it is merely a discussion of various possibilities – please contact Mr. Eugene Sherayzen, an experienced international tax attorney of Sherayzen Law Office for professional advice with respect to your undisclosed foreign accounts.
OVDP International Tax Attorney: Letters from Swiss Banks
Ever since more than a hundred banks officially announced (and a lot of private banks did so unofficially) that they will enter the Program, U.S. taxpayers with undisclosed Swiss bank accounts have received letters from their Swiss banks asking the taxpayers whether they are in compliance with U.S. tax laws, whether they have filed their FBARs (Report of Foreign Bank and Financial Accounts, currently Form FinCen 114 (formely TD F 90-22.1))and, if not, whether they entered the IRS Offshore Voluntary Disclosure Program (OVDP).
Indeed the emphasis in all of the letters has been on the OVDP without any regard to the individual circumstances of the taxpayers and despite the fact that many of these taxpayers learned about the existence of the FBARs from the very letters from their Swiss banks.
OVDP International Tax Attorney: Common Chorus to Join OVDP
It is not only the Swiss banks that are urging these taxpayers to enter the OVDP. The IRS is also very eager to see as many people enter the OVDP as possible. Shockingly, the great majority of accountants readily take on the legal (not accounting) issue of whether a client should enter the OVDP. The accountants herd their clients into the OVDP without ever discussing the consequences of doing so or any other legal alternatives.
The end result of this common stance has been to convince the terrified taxpayers that OVDP is the only route available to them irrespective of their circumstances, whether the FBAR non-compliance was willful or non-willful, whether they have reasonable cause for the delayed filing of their FBARs or not, whether they owe any taxes or not, and so on.
OVDP International Tax Attorney: OVDP is Option #1
Of course, as an OVDP International Tax Attorney, I agree that there is no doubt that OVDP is Option #1 that must be considered by U.S. taxpayers who received a letter from their Swiss banks However, being Option #1 does not mean the only option and does not mean that it should be automatically followed.
Moreover, even under the OVDP, there are many issues, strategies and possibilities that must be explored by your OVDP International Tax Attorney.
Undoubtedly, OVDP has tremendous benefits to offer to U.S. taxpayers with willful non-compliance and who may be facing realistic criminal penalties. On the other hand, the calculation becomes much more complicated when your client simply did not know about the FBARs and the IRS is not likely to be able to sustain its burden of proof on the willfulness issue.
Comprehensive Legal Analysis of the Voluntary Disclosure Alternatives Must Be Considered
In all cases, but even more so in the non-willful cases, a very complex calculation and cost-benefit analysis must be conducted by your OVDP International Tax Attorney, comparing traditional FBAR penalty structure with the OVDP penalty structure. Outside factors, such as time, legal fees, complexity of the issues, impact on tax returns, appeal possibilities, and many others, should be considered your OVDP International Tax Attorney. Once all factors are considered, the Attorney should advise you on the available Voluntary Disclosure alternatives and the probability of success.
Only then, armed with this knowledge and based on the analysis of a good OVDP International Tax Attorney, should a U.S. taxpayer with undisclosed Swiss accounts make his decision.
Contact Sherayzen Law Office for Professional Legal and Tax Help With the Voluntary Disclosure of Your Foreign Accounts
The point of this article is not to diminish the value of the OVDP, but to argue that all U.S. taxpayers with undisclosed foreign accounts should be given a chance to consider all of their voluntary disclosure options based on the comprehensive analysis of their particular circumstances.
This is precisely what Sherayzen Law Office experienced international tax firm can do for you. We will thoroughly analyze the facts of your case, assess the potential FBAR and OVDP penalties and tax liabilities, analyze the voluntary disclosure alternatives, create a comprehensive voluntary disclosure plan for you, and implement this plan (including the preparation of all legal documents and tax forms).