We recently received the final closing agreement from the Internal Revenue Service formalizing the successful completion of the Offshore Voluntary Disclosure Program (OVDP) for a husband and wife who had an unreported offshore bank account. The couple received notice in 2014 from their bank in Portugal regarding the Foreign Account Tax Compliance Act (FATCA). The bank’s notice advised of the agreement between Portugal and the United States under FATCA. The bank in Portugal further advised that it would begin reporting to the IRS information about any clients who are U.S. citizens.
My firm was retained by the couple and we were able to enter them into the OVDP before the offshore bank reported the assets to the IRS. It was important that we acted expeditiously on behalf of our client because once the IRS receives information about an unreported offshore account, a person is prohibited from entering the OVDP.
The IRS and Department of Justice are vigorously pursuing those with unreported offshore accounts. The potential consequences for those targeted by the IRS include criminal prosecution which can result in long terms in prison and substantial fines: 50% of the value of the account each year that it was not reported. The client’s prompt action in retaining us allowed us to enter them in the OVDP before the government received the bank records from Portugal under FATCA.
Once we entered the couple in the OVDP, we were able to successfully complete the OVDP thereby avoiding criminal prosecution and large civil penalties.
Past results do not constitute a guarantee or prediction regarding the outcome of your legal matter.