Public attention to offshore accounts began in June 2008 when IRS announced it had filed a "John Doe Summons" seeking an order from a Federal court in Miami, Florida permitting IRS to request information from Swiss banking giant UBS about American taxpayers who may be using Swiss bank accounts to commit tax evasion.

Offshore accounts do NOT equal tax evasion. 

Being accused of tax evasion leaves a taxpayer feeling humiliated, vulnerable and uncertain who to trust.

It is your Consititutional right to avoid taxes (minimize your tax liability) by utilizing exemptions, deductions and exclusions Congress has provided.  This is not tax evasion.

Offshore accounts and who is involved is not limited to the information gained by the UBS scandal but is rapidly growing as the IRS gathers information through taxpayers who are voluntarily disclosing offshore accounts.  This is how the IRS gathers leads to other potential cases that may involve offshore accounts.

IRS is hiring hundreds of employees which is being referred to as "The IRS high wealth unit" to focus on trusts, real estate investments, privately held companies and other business entities controlled by rich individuals (http://www.msnbc.msn.com/id/34383346/ns/business-us_business/ ).

Hundreds of articles have been published in an effort to encourage and intimidate taxpayers with offshore accounts to come forward.  This effort was enhanced with offers of an "amnesty program".  These efforts have been highly successful for the IRS in gathering and collecting evidence to begin "hunting" wealthy taxpayers who may be evading taxes through offshore accounts.

Articles relating to offshore accounts assume a taxpayer is evading taxes.  This is not true.  Most often the taxpayer is unaware they have a problem.

What you should know:

Individual taxpayers who file U.S. tax returns, and who have Swiss bank accounts, or any other offshore accounts must report income from these offshore accounts on Schedule B of their Form 1040 income tax returns.  They must also declare these offshore accounts on their tax returns.  Taxpayers with signatory authority over, or an interest in offshore accounts are required to file Form TDF 90-22.1 no later than June 30th.  Anyone with an offshore account who doesn't file Form TDF 90-22.1 can be hit with both criminal tax penalties, and civil tax penalties.  The criminal tax penalties are a maximum of $250,000, or five years in prison, or both 31 U.S.C. 5322(a).

If you have an offshore account or offshore assets it does NOT mean you intended to break the law.  Clients who own other types of foreign assets such as life insurance may be unaware that those assets also must be disclosed to the IRS.

Some examples of foreign assets that may be subject to disclosure are:

• Foreign life insurance policies with a cash surrender value greater than $10,000
• Trusts with foreign financial accounts
• Investments in gold bullion
• Foreign-type individual retirement accounts
• Pention plans that are in the client's control
• Foreign annuities with a balance that exceeded $10,000 any day during the year
• Inheritance from a foreign-based relative

We can help you understand what you might be facing.  We can explain the IRS process and procedures and help you know that you do have options to correct offshore reporting issues.  We have assisted more than 80 clients resolve offshore accounts.  Call for a free and confidential consultation.

Call 1-800-447-6181 for a free consultation