The AP is reporting that former Swiss Banker Rudolf Elmer has given WikiLeaks 2000 names of potentially secret account holders at the private bank of Julius Baer. Worried taxpayers with unreported off-shore accounts — not just at Julius Baer — should read on.
First, as long as the IRS has not started a criminal investigation or has commenced an audit for unreported income, Voluntary Disclosure may still be available. The key then, is to act quickly — before the IRS learns the names that WikiLeaks discloses. The terms of Voluntary Disclosure may differ, typically, taxpayers have to pay for at least the last six year’s worth of unreported income, and associated interest, along with one large penalty for failing to file a FBAR. However, the upside is that once accepted into a Voluntary Disclosure program, the taxpayer will have no criminal liability — the case is resolved as a civil matter.
Second, tax evasion is crime of intent. Even if not accepted into a Voluntary Disclosure program, coming clean before the IRS begins an investigation makes it very difficult for the Department of Justice to prove the requisite intent for the crime of tax evasion. A prophylactic strategy like this, would likely cause the DOJ to focus its scarce prosecutorial resources elsewhere — meaning no criminal charges.
Every client we’ve helped with unreported off-shore accounts comes to our office with a difficult decision to make. We’ve found, however, that once our clients fully appreciated the true risks and was able to weigh those risks against the actual costs of compliance, the decision became a lot easier.
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Find out more information on Offshore Voluntary Disclosure Initiatives by visiting our main OVDI page or by reading articles from our OVDI blog category.
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