In its continuing effort to discover those who evade taxes by having unreported offshore accounts, the Justice Department is increasing its commitment to identify, investigate and prosecute those with undisclosed accounts. Last November, a New York Federal Judge authorized the Internal Revenue Service to serve John Doe Summonses on five banks to obtain information concerning U.S. taxpayers with undisclosed accounts.
A John Doe Summons requires the bank to produce account information and identify U.S. account holders. It also requires that banks disclose accounts in which a U.S. citizen or resident has an interest, regardless of the name on the account.
The banks receiving the summons are: Zurcher Kantonalbank (ZKB) and its affiliates in Switzerland, Bank of N.T. Butterfield & Sons, Ltd. (Butterfield) and its affiliates in Switzerland, the Bahamas, Barbados, Cayman Islands, Guernsey, Hong Kong, Malta, and the United Kingdom.
While offshore accounts are not illegal, it is a crime to not report foreign income and offshore accounts to the government. The IRS usually allows people to enter the Offshore Voluntary Disclosure Program (OVDP) which enables people to get straight with the IRS and avoid criminal prosecution. There are limitations to entering the OVDP. Once the IRS receives records from the offshore bank, the account holder is barred from the OVDP and will be subject to criminal investigation and prosecution. The assistance of an experienced attorney is important to the successful completion of the OVDP. Anyone with offshore accounts should consider the benefits of the OVDP before it is too late to avoid criminal prosecution.
Law Offices of Mark L. Horwitz, P.A.
17 East Pine Street
Orlando, FL 32801