Do You Have an Unreported Offshore Account?
Kegler Brown Business Tax Alert October 13, 2009
The Internal Revenue Service ("IRS") has increased its scrutiny of unreported offshore bank accounts. A joint investigation between the IRS and the Department of Justice recently resulted in a $780 million settlement with UBS, whereby UBS also agreed to disclose the names of clients with unreported offshore accounts. Offshore accounts must be disclosed by filing a Report of Foreign Bank and Financial Accounts ("FBAR") if:
- A person with U.S. tax obligations has a financial interest in, or signature authority over one or more accounts in a foreign country, and
- The aggregate value of all foreign financial accounts exceeds $10,000 at any time during the calendar year.
The IRS is offering a voluntary disclosure program for persons with U.S. tax obligations who have unreported offshore accounts. If taxpayers voluntarily disclose before October 15, 2009, they may avoid civil penalties and criminal prosecution.
If you think you may have an unreported offshore account, consult with your tax advisor to determine whether you should participate in the voluntary disclosure program. For further guidance, visit the IRS voluntary disclosure program website.