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Swiss Firm Provides Accountholder Info to DOJ as Part of Settlement

Offshore Account Update

Posted on September 1, 2017 |

 If you have any funds invested with foreign financial institutions, it is imperative you ensure you are in compliance now, and have complied in the past, with FATCA, with mandated annual FBAR filings, and with all other tax rules and requirements. If you have not been in full compliance with tax obligations, you should speak with a Boston tax law firm as soon as possible to explore your options for resolving your unresolved tax issues through participation in amnesty programs such as the Offshore Voluntary Disclosure Program.

OVDP allows you to limit the possible penalties and consequences you could face if the IRS discovers you have undeclared offshore accounts. There is a very substantial likelihood that the IRS will discover this, because the IRS has repeatedly entered into deals with foreign financial institutions that involve those institutions turning over accountholder information in exchange for avoiding prosecution.

Your bank or financial management firm, in other words, has likely turned over your information already or will do so in the future. Just recently, for example, another foreign financial management company entered into a non-prosecution agreement and agreed to pay a fine and cooperate with the DOJ in providing accountholder information. 

Swiss Firm Gives DOJ Information on Accountholders

Prime Partners is the Swiss asset management firm that has now entered into an agreement with the DOJ. Prime Partners oversaw $270 million of assets belonging to U.S. taxpayers in 2008, and it was accused of helping those U.S. taxpayers to evade their tax obligations. To avoid being prosecuted, Prime Partners made a deal with the Department of Justice. The DOJ indicated that Prime Partners has been extraordinarily cooperative as part of its deal, giving the DOJ extremely comprehensive information.

Prime Partners turned over a total of 175 un-redacted files with information about its clients to the Department of Justice. The DOJ and IRS can use all of the information provided by Prime Partners to conduct investigations into the U.S. taxpayers who worked with Prime Partners to conceal offshore investments.  Prime Partners is one of many banks and financial institutions that have offered lots of accountholder information for the DOJ and IRS to use to investigate taxpayers.  Like other financial institutions, Prime Partners will now pay a small fine -- around $5 million – to settle charges and avoid criminal penalties.

The legal trouble for the accountholders whose information has turned over, however, may be just beginning. If the IRS is investigating your offshore accounts, you are no longer eligible for amnesty options that allow you to voluntarily report your past nondisclosures to limit penalties. You face the very real likelihood that you will incur substantial civil fines that, in some cases, have exceeded the value of funds kept offshore. You could also face criminal prosecution for not complying with disclosure requirements for foreign accounts.

Contact a Boston tax law firm as soon as possible if you are at risk of becoming the target of an IRS investigation so you can find out what options you have available to you now and so you can take swift action to try to protect yourself from loss. Attorney Kevin Thorn can help.

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


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