ABA Tax Section Webinar part III

ABA Webinar “ANSWERING YOUR CIVIL AND CRIMINAL OFFSHORE DISCLOSURE QUESTIONS” – Tuesday, February 24, 2015 at 12:00 to 1:30PM ET.
The Department of Justice’s greater concern is over funds that originated in the U.S. as opposed to funds that were always offshore. Thus, U.S. profits and gains diverted to offshore accounts garner more attention on the criminal side than do foreign gifts or inheritances that were deposited into offshore accounts.Swiss Bank Secrecy laws still prevent banks in the program from turning over a client’s name unless the client consents or a proper Treaty Request is made (must indicate fraud) such as where nominee entity was employed although a Treaty Protocol pending in the U.S. Senate would expose personal numbered accounts to being turned over.The banks must turn over the name and location of bank accounts to which “Leavers” transferred funds but not the name itself. With that information IRS will be able to identify the individuals by obtaining a John Doe Summons requiring the bank to turn over names.

Preclearance of names is now taking much longer than when the Program first opened because IRS has much more data to go through in order to check a name. Size of the account does matter but is not determinative other than at the extreme ends of the spectrum (very small being an indicator of non-willful conduct and very large being a strong indicator of willful conduct). IRS cashing of your check or sending a bill for additional interest is not an acknowledgment that your returns pass muster in the Streamlined Process. Your return can still be selected for audit later on and there is no process by which one can request an early audit. In theory Taxpayers with accounts at listed banks (subject to the 50% OVDP penalty) can go Streamlined if non-willful.