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Accountholders Beware: The U.S. is Cracking Down on Offshore Accounts in Singapore

Offshore Account Update

Posted on May 13, 2016 |

The Offshore Voluntary Disclosure Program (OVDP) allows people who did not file a required Report of Foreign Bank and Financial Account (FBAR) to voluntarily report their offshore accounts. Voluntarily reporting a previously undeclared offshore account can allow you to reduce financial penalties and to avoid the possibility of being criminally prosecuted.

Unfortunately, many people with offshore Swiss Bank accounts found they couldn't participate in OVDP because they were already under investigation by the IRS. If the IRS has your offshore account details and knows about your undeclared funds, you can no longer voluntarily disclose.

Accountholders with Swiss accounts had their information provided to the IRS by banks in Switzerland who participated in the Swiss Bank Program. The Swiss Bank Program offers reduced penalties and amnesty from criminal charges to banks who allegedly facilitated tax evasion.

More than 80 Swiss banks have participated in the Swiss Bank Program, effectively eliminating the privacy protections which Switzerland used to guarantee by turning over extensive details about accountholders.

The IRS is now trying to get account details about people with accounts in Singapore. If you have money in an offshore account in Singapore, you should know you are the next target of the IRS. Before it is too late and you can no longer have the option of OVDP participation, you should talk with a Boston tax evasion attorney.

IRS Is Pursuing Accountholder Information for Singapore Accounts

The IRS has asked a federal judge to mandate UBS turn over the accounts of a man living in China. The accounts that the IRS is trying to get UBS to turn over are from a bank in Singapore. Singapore has privacy laws preventing records from being disclosed without the permission of the accountholder.

The IRS is essentially trying to set up a clash between its right to enforce tax laws and Singapore's banking secrecy laws.  Because UBS has subjected itself to U.S. jurisdiction, the IRS argues it is proper to try to force UBS to produce the records.

Singapore has cooperated in the past, allowing banking information to be turned over if foreign authorities requested information or if there was evidence privacy laws were being used to hide criminal activities. One expert familiar with the bank privacy laws in Switzerland suggests Singapore will use appropriate channels to provide bank records.

If the IRS can compel the production of bank records from Singapore banks despite the Singapore laws on privacy, this opens the door to investigating everyone with undeclared offshore accounts in Singapore.

Before the IRS moves forward with efforts to get more information on U.S. accountholders, those with funds in Singapore should strongly consider talking a tax evasion attorney like Kevin Thorn. By the time a Singapore bank gives up your info, it will be too late -- so don't hesitate to find out if OVDP is right for you.

For a consultation, contact Kevin E. Thorn, Managing Partner, at ket@thornlawgroup.com or (617) 692-2989

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