Is the IRS most Interested In UBS Account Holders of Passive Foreign Income Companies? We think that may be the case.
Why? Look at the number one criteria the IRS used in determining which names of the 4,450 UBS customers it wanted.
Was it the highest individual account holders? Nope.
So, what were they targeting? If the account was held by a Passive Foreign Income Companies (PFIC) controlled by US citizens, the IRS wanted the account information. The reason?
If the IRS just went after individuals, chances are that account is the only foreign account the individual held. The investigation would end in a cul de sac — netting the IRS no more information than the one account holder.
But, the IRS is interested in catching the big fish that will lead to other big fish. The IRS wants to learn who the players are. By targeting PFIC's, the IRS is sure to unravel sophisticated webs involving large players with large abilities to pay and large incentives to "rat out" whomever else was involved in criminal conspiracies to defraud the United States.
The Northeast, is the epicenter of non-disclosure. Two-third of all Passive Foreign Income Companies (PFIC) are held by taxpayers in Connecticut, New York and New Jersey. Yet, from a very good source, less than half of those PFIC's came forward. The IRS will be going after those that have not as soon as the plate full of Voluntary Disclosures Requests is completed.
For those who haven't come forward and who happen to control PFICs, there may still be time.
If a criminal investigation or audit has not commenced, Voluntary Disclosure may still available to taxpayers. The deal may not be the same as paying taxes on unreported income over the past 6 years and an FBAR penalty of 20% of the highest account value, but it will not involve jail time.
If you're not sure if you should get into a disclosure program, or are unsure of which program would be best for you, contact us. We can help. Call us at 888-727-8796 or call email@example.com.