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Undisclosed Foreign Accounts

Your Foreign Accounts are Concealed? Look Out for The IRS

 

Anyone keeping information about overseas assets from the U.S.government, whether intentional or unintentional, the news of Credit Suisse turning over names and account details of selected U.S. clients to the Internal Revenue Service might have been akin to a death knell.

During that time, the IRS, who was aggressively targeting taxpayers who have offshore assets and income to bring them back into the tax system, allowed for a number of windows of time for voluntary disclosure to lure taxpayers to confess. The final window closed on September 9, 2011.

Thereafter, folks with undisclosed foreign assets that missed out on the amnesty, became heavily reliant upon the advice of tax professionals.

“The advice to someone over in Switzerland is to run like hell for the nearest tax lawyer to discuss whether it makes sense to do a voluntary disclosure,” said Dennis Brager, a Los Angeles tax attorney with Brager Tax Law Group, who specializes in tax controversies.

People who are required to step forward include U.S. taxpayers who hold numbered accounts in Switzerland, people who reside overseas (which includes retirees), and immigrants who continue to sustain financial lives in their home countries.

Although the amnesty window had closed, some taxpayers with undisclosed foreign assets might still be eligible to file a traditional voluntary disclosure so as to avoid possible criminal prosecution, Brager explained.

There are key distinctions between the specific voluntary disclosure programs and a more traditional voluntary disclosure. First off, the specific voluntary disclosure programs laid out the details of the possible penalties.

“Taxpayers who do not submit a voluntary disclosure run the risk of detection by the IRS and the imposition of substantial penalties, including the fraud penalty and foreign information return penalties, and an increased risk of criminal prosecution,” the IRS warned.

According to the IRS, If you are convicted of tax evasion, you could face up to five years in jail.

Credit Suisse Action

Credit Suisse, Switzerland’s second-largest bank, started notifying clients who might fit the description of offshore tax evasion that it was preparing to give their names and account details over to the IRS, in conjunction with Swiss tax authorities.

The move came right after a formal request that had come shortly before for the information from the IRS.

This campaign to corale tax evaders came with the U.S. government’s crusade at that time to balance the budget and cut the deficit. Lowering the tax gap — the difference between the tax dollars owed and the amount collected from taxpayers — is one of the few relatively easy ways to bring in more revenues.

Taxpayers that voluntarily confessed their failure to report foreign bank assets on the FBAR (Foreign Bank Account Report) within a program that gave them the opportunity during that time were charged 25% of the highest aggregate balance between 2003 and 2010.

This FBAR filing is required for all U.S. citizens with a minimum $10,000 in a foreign financial account.

Steep Penalties

Nonetheless, the penalties are far greater if the IRS discovers that you neglected to file an FBAR, especially if your violation is found to have been “willful.”

In such cases, the fees could tick up as high as 50% of the total balance in the accounts, or $100,000 for relatively smaller accounts, according to Baker Tilly, an international tax and accounting firm. In other words, if you kept the IRS in the dark about the $2 million you have stashed in an overseas account, you might bid farewell to $1 million of your money.

During the two amnesty periods in 2009 and 2011, a whopping 30,000 taxpayers stepped forward. The IRS reported that it had rounded up a total of $2.2 billion from taxpayers who participated in the 2009 program, and another $500 million by November 2011, not including penalties, from people who passed through the 2011 windows.

For U.S. persons who still have unpaid taxes on significant offshore assets, attempting to hide assets overseas from American tax authorities became increasingly ineffective.

Tax lawyer Brager warns his clients thusly: “I keep telling clients the same thing, ‘I don’t know if you’re going to get caught, or how you’re going to caught, but if you do, you’re not going to like what happens next.'”


Charle Butler
Charle Butler
2021-03-12
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I was hesitant to hire the Spodek Law Group. I read reviews and knew they have a great reputation. However, I thought I would spend money and not see or speak to my attorney. From the beginning to end of my case Todd and the entire staff were available and willing to help. We worked towards and end result that was way above my expectation and Todd delivered. I am forever grateful for patience and long days and night spent working on my case. Thanks Todd and the entire team!
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Mesonista parsons
2021-03-05
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My attorney at Spodek was Abigail. She was very knowledgeable and helpful with all my questions and concerns, as well as responsive. Her fees are affordable and Abigail took the time to make sure I understood everything relating to my case. I highly recommend Abigail and will request her services in the future.
debabrata chakraborty
debabrata chakraborty
2021-03-03
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Todd A Spodek is the experienced and best criminal lawyer at USA. He is very professional and always respond on time. Alex also very cooperative and always help me. They took care me and my problem like family member. I am 100% satisfied for their professional service. My result was unexpected and amazing. They dismissed my case. I am really grateful to them. I will recommend you to go there if you want to solve your problem. I wish all the best for them.
Asata Hendricks
Asata Hendricks
2021-03-02
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Truly appreciate the work the guys did!. Exceptional team & I know they care about each and everyone of their clients. I am super thankful to be referred to Spodek Law Group and I am grateful Todd & Alex were able to work diligently to achieve an outcome I am pleased with. Despite COVID they stayed on top of things and kept me informed every step of the way. Very thankful.
Mike Moroff
Mike Moroff
2021-02-26
Verified
I'm very satisfied with the services rendered by Todd, Alex and Mary Lou. I whole heartedly recommend Spodek Law Group . I've worked with and have retained other attorneys in the past with Todd's firm being the cream of the crop for many reasons. A very serious legal matter was resolved after a year's hard work and effort. Todd expertly guided me through the process and was able to navigate and make the good journey bearable as well as successful. Mary Lou initially provided excellent assistance before referring my case to Todd. Alex's support was effective and timely. The customer portal (MyCase) is an invaluable communication tool that also kept track of my case. Various aspects of my case were explained and there were several options provided but I made the final decision of how the case would be handled. The legal fee was reasonable considering the effort and amount of work plus it was a flat fee regardless of the length of time required to conclude my case. Todd made himself available to me and we had many scheduled meetings to go over the progress and to discuss the next steps. I felt more confident after many discussions with him. You will not go wrong choosing Spodek Law Group for legal matters.
Josh Katz
Josh Katz
2021-02-24
Verified
Being that it was the first time that I was in need of an attorney, I was afraid and hesitant and knew I needed the absolute best. It is beyond understood why Spodek Law Group has a reputation of being the top, if not the best law firm in New York. Alex and Abigail were there every step of the way even at the most unconvenient hours. I could not have asked for more. They are extremely good at what they do and they delivered much much more than just winning my case. A big thank you to Alex and Abigail for all the guidance and counseling and their upmost loyal support that extended far more than just legally. If you need the absolute best than don't hesitate to hire Spodek Law Firm.
L.C.
L.C.
2021-02-24
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I cannot tell you how thankful I am to Todd and Alex for their hard work and dedication to my case. I had never been in any trouble before but I had an unfortunate event occur and in the midst of COVID-19 at that therefore I knew I needed a team that was dedicated to my success. Today- my case has been finalized and I’m walking away with no record and can continue life as a mother and a Grad student worry free. I cannot express enough gratitude for their assistance.
AnnMarie Soliman
AnnMarie Soliman
2021-02-23
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I received a summons and called Spodek law group for a free consultation. Alex took my call and was very quick and responsive. He was available anytime through multiple platforms and very reassuring when needed. They are extremely organized and thorough. They got my case dismissed! I’m very grateful. Thank you Alex and Todd!

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"Spodek Law Group have offered me excellent support and advice thru a very difficult time. I feel I've dealt with someone who truly cares and wants the best outcome for you and yours. I'm extremely grateful for all the help Spodek Law Group has offered me. I can't recommend them..."

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