DOJ May Offer Non-Prosecution Agreements to Other Foreign Countries (Golding & Golding)

DOJ May Offer Non-Prosecution Agreements to Other Foreign Countries (Golding & Golding)

DOJ May Offer Non-Prosecution Agreements to Other Foreign Countries

Before there were the Panama Papers, Paul Manafort and other recent international tax enforcement activities, there was Switzerland and Offshore Banking.

Offshore Banking was one of the catalysts that led to the development of FATCA – and subsequent enforcement by the IRS, DOT and DOJ.

And, while FATCA violations typically result in civil penalties, the DOJ recently chalked up the first FATCA Criminal Conviction (See Here).

What is FATCA Reporting for Individuals?

FATCA (Foreign Account Tax Compliance Reporting) for individuals is usually completed on a Form 8938 (which is filed alongside your tax return).

Unlike the FBAR, which is a similar form, the Form 8938 is submitted directly with your tax return at the time you submit your tax return to the US government.

The form has different threshold requirements depending on whether the filer is Married Filing Jointly (MFJ) or Married Filing Separate (MFS)/single, and/or if the person resides in the United States or is considered a foreign resident. 

Generally, if you live abroad (outside of the United States) the threshold requirements are higher for the individual to have to file the form. In other words, you need to have more money or specified foreign assets before you would be required to file this form.

In addition, unlike the FBAR in which a person has to report accounts in which they may have no interest in (but have signature authority), generally speaking a person only files the 8938  for accounts or specified assets that they actually have an interest in.

Form 8938 Penalties

As you may or may not be aware, the IRS issues very stiff penalties for individuals who have not properly reported the foreign accounts or assets. The IRS has the authority to issue upwards of $10,000 for violations involving FATCA Form 8938, and penalties can reach as high as $60,000.

This would be in addition to any other penalties the IRS could issue for failing to properly file an FBAR or other related forms. Moreover, if the IRS is able to prove that a person was willful or fraudulent in in the failure to file the form, the IRS can issue much higher penalties against, as well as take immediate action against your foreign/U.S. accounts, and possibly revoke your passport.

You May Have Other Reporting Requirements as Well

Depending on the types of foreign/offshore assets, accounts, investments and income you have, you may also be required to report:

  • FBAR (FinCEN 114)
  • Form 3520
  • Form 5471
  • Form 5472
  • Form 8621
  • Form 8865

DOJ to Expand FATCA Non-Prosecution beyond Switzerland?

In a recent article by Alex M. Parker for Law360, he provided the following:

“We’ve made no decisions about how we’re going to handle other jurisdictions,” said Nanette Davis, senior litigation counsel for the Department of Justice, during a Thursday panel discussion.


Because we have the transactional data, we are doing the analytics to see where the money flows are going from the Swiss banks. Some countries seem to be more popular than others.”

The Risk of Losing Your Right to Voluntarily Disclosure

A big concern, is that the IRS already has information about U.S. Account Holders, and is consistently being fed information about U.S. Account Holders from Foreign Financial Institutions within many different countries.

If these countries enter into non-prosecution agreements BEFORE you have a chance to disclose, and provides your information to the IRS — it may limit or prevent your submission to the IRS Offshore/Voluntary Disclosure.

We Specialize in Safely Disclosing Foreign Money

To avoid the IRS obtaining your information from one of these countries/institutions before you have the chance to disclose, you may want to consider getting into compliance with IRS Offshore/Voluntary Disclosure.

We have successfully handled a diverse range of IRS Voluntary Disclosure and International Tax Investigation/Examination cases involving FBAR, FATCA, and high-stakes matters for clients around the globe (In over 65 countries!)

Whether it is a simple or complex case, safely getting clients into compliance is our passion, and we take it very seriously.

What Should You Do?

Everyone makes mistakes. If at some point you discover that you should have been reporting your foreign income, accounts, assets or investments, the prudent and least costly (but most effective) method for getting compliance is through one of the approved IRS offshore voluntary disclosure programs.

Golding & Golding, A PLC

We have successfully represented clients in more than 1000 streamlined and voluntary disclosure submissions nationwide, and in over 70-different countries.

We are the “go-to” firm for other Attorneys, CPAs, Enrolled Agents, Accountants, and Financial Professionals across the globe.