The threat of FATCA enforcement has impacted every jurisdiction in the world and the global financial industry is quaking with fear. The US Justice Department has taken the position that the entire non-US financial industry is potentially part of a continuing criminal conspiracy with some US individuals and multi-national companies to evade US income tax. The Justice Department has unilaterally forged ahead to obtain indictments and convictions over prominent foreign banks, bankers, and some of their US customers. The United States justification for claiming the moral high ground is that it is merely seeking to have all US taxpayers pay tax as required under US law.
On August 30, 2012 I wrote a post calling attention to a new OVDP program. How is it new? This program was NOT for individuals but was for banks. I introduced it as:
I concluded that post with:
The possible next step …
The U.S. is clearly on a mission to confiscate assets throughout the world.
In the beginning, there was OVDP for individuals.
Now we have OVDP for banks.
Coming soon, OVDP for financial advisors.
The solution to this is for the U.S. to simply absorb all the other sovereign nations of the world. Once we become one country, there will be no more “offshore accounts”. But, how would fines be imposed then?
Conclusion and message to U.S. citizens abroad …
You better enter OVDP before your bank does!
(Since I wrote that post, #FATCANatic and Patriot American (of the “Blind Patriotism” variety), Diane Francis has finished her book calling for the merger of Canada and the Unites States.)
Interestingly a U.S. law firm reinforces my view that the IRS has created OVDP for Swiss banks.
In August 2013, the Swiss Federal Government and the DOJ announced a first of its kind program (the New Program) that will enable eligible Swiss banks to address and resolve their status with regard to the DOJ’s ongoing enforcement investigations.
The New Program, which is open only to Swiss banks not currently under investigation by the DOJ, is effectively a voluntary disclosure program for banks, with features comparable to those of the voluntary disclosure programs offered by the US Internal Revenue Service in recent years to US persons with undisclosed financial accounts outside of the United States (referred to collectively as the OVD Initiatives), incorporating definitions, due diligence procedures and compliance program approaches contained in the Foreign Account Tax Compliance Act (FATCA) as implemented by Switzerland and the United States in the Swiss-US Intergovernmental Agreement (Swiss IGA).
The New Program, similar to the OVD Initiatives, will provide the US with data regarding US taxpayers who hid their income and assets from the US and with a list of financial institutions and financial advisors who participated in the tax non-compliance of US persons. (Please see our reports on these developments, listed below.) With the knowledge that the IRS and the DOJ through their ongoing investigations into tax evasion have already uncovered extensive data through the OVD Initiatives, the IRS whistleblower program, bilateral double tax treaty, tax information agreements and informal cooperation agreements with other countries, the New Program enables Swiss Banks not already targeted in a DOJ investigation to help ensure that they are not targeted or prosecuted going forward.
Good enough. But, what is particularly interesting is the author’s thoughts on the expansion of OVDP.
WHO ELSE IS AT RISK AND WHAT SHOULD THEY DO?
The IRS now offers US persons who evaded tax an opportunity to voluntarily disclose such activity through OVD Initiatives and avoid criminal prosecution. The DOJ is now offering Swiss Banks an opportunity to voluntarily disclose any potentially criminal conduct related to such tax evasion through the New Program. However, no opportunity to voluntarily disclose is affirmatively being offered by the DOJ either to those professionals who may have facilitated tax evasion through accounts held outside the US or to non-Swiss Banks outside of the US Those professionals (including bank employees, financial advisors, lawyers, accounts and others) and institutions, as well any US persons with previously undisclosed financial accounts outside of the US should also seek legal counsel as soon possible to identify and evaluate their options, particularly given the additional information that will be provided to the DOJ in connection with the New Program and FATCA.
OVDP for financial planners – coming soon to a bank near you!
Remember that your and their salvation lies in becoming a whistle blower!
This might be a reason to avoid financial planners at any bank that is FATCA compliant. Hmm, …. who might they be?