Why Did a Foreign Bank Send me a “Voluntary Disclosure” Package?
Did a Foreign Bank Send you a “Voluntary Disclosure” Package: Unfortunately, many foreign banks and other Foreign Financial Institutions are taking it upon themselves to try to cover their own butts when it involves U.S. tax compliance – and putting U.S. Account Holders at risk with the IRS.
These are the same Foreign Financial Institutions that told U.S. persons that they can safely move money into their offshore accounts — and avoid the long arm of the IRS.
Received a “Voluntary Disclosure” Package?
Just like your favorite page of UGG boots, moving money offshore is no longer “in fashion.” With the introduction and enforcement of FATCA, and several deferred prosecution agreements later — many foreign banks are declining to risk big fines and penalties.
Therefore, they are sending their own clients, generic (and oftentimes incorrect) voluntary disclosure packages to submit to the IRS.
Do not directly submit to the IRS.
If you are a U.S. person and you have unreported foreign accounts, assets, investments, or income, then you are not out of luck. The IRS has developed various Tax Amnesty Programs, which were developed to assist you with getting into IRS Offshore compliance.
These programs are generally referred to as “voluntary disclosure programs,” and there are various different types of programs.
Why is the Bank Sending me This Information?
Here’s the problem: Some U.S. Persons opened up foreign bank accounts such as offshore numbered bank accounts, for no reason other than the fact that they thought it was a good investment (or Miami Vice made it look super cool). They may have not reported the foreign accounts to the U.S., because they were simply unaware they were required to report it.
Alternatively, there are individuals who are U.S. persons who intentionally hid their money offshore to try to avoid uncle Sam.
In the first category of people, applicants may get the chance to reduce their penalty to 5% — or even a full penalty waiver.
In the second category, the penalties are stiffer and applicants may face up upwards of a 50% penalty (although the penalty may vary)
Guess Which Package your Foreign Bank Sent You?
We are approached by many clients who contact us after receiving a package from their foreign bank, and it is never regarding the non-willful submission.
The same banks that convinced you to invest your money overseas, are the same banks trying to trying to get you to fall on the sword, and acknowledge that you were willful and intentionally seeking to a big US tax – even when it may not be true.
Golding & Golding – Board Certified in Tax Law
Golding & Golding represents clients worldwide in over 70-countries exclusively in Streamlined, Offshore and IRS Voluntary Disclosure matters. We have successfully completed more than 1000 streamlined and voluntary disclosure submissions.
Our Team Lead is a Board Certified Tax Law Specialist (Less than 1% of Attorneys nationwide) and Enrolled Agent, with a Master’s of Tax Law (LL.M.)
Mr. Golding leads his team in each and every case we accept for submission.
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Sean holds a Master's in Tax Law from one of the top Tax LL.M. programs in the country at the University of Denver. He has also earned the prestigious IRS Enrolled Agent credential. Mr. Golding's articles have been referenced in such publications as the Washington Post, Forbes, Nolo, and various Law Journals nationwide.