IRS Offshore Voluntary Compliance Program  

 "We have your clients on the run. We have these banks on the run, and we're going to keep going after them," Kevin Downing, a senior trial attorney with the Justice Department's Tax Division, said at the fall meeting of the American Bar Association Section of Taxation. The Department of Justice is now cracking down on taxpayers with accounts hidden overseas, as well as the banks that facilitate it. Officials from the Department have suggested that taxpayers should make use of the IRS's voluntary disclosure program as soon as possible.

The IRS announced its offer of an amnesty program under which taxpayers may come into compliance with their previously undisclosed offshore bank accounts. The principal benefit is the avoidance of criminal prosecution for tax fraud and related tax crimes. Qualifying taxpayers also receive the benefit of reduced penalties. The deadline for initiating the disclosure process is October 15, 2009.

The program arose as a result of the IRS's belief that more than 50,000 U.S. taxpayers have hidden funds in Swiss bank accounts, principally at UBS, and have failed to report the related income on their federal returns and the ownership of the accounts on Forms TD F 90-22.1, "Report of Foreign Bank and Financial Accounts" ("FBAR").

Martens, Seay & Todd has substantial experience in advising and representing high-wealth individuals in the recently announced voluntary disclosure program.

For more information, please e-mail Jimmy Martens at jmartens@textaxlaw.com, Mike Seay at mseay@textaxlaw.com, or Kelli Todd at ktodd@textaxlaw.com or call any of them at (512) 542-9898.