Probably not ... and if it is, you might not be a client of mine for much longer. The Treasury Department requires taxpayers to file annual reports declaring their interest in foreign bank, investment, and trust accounts. Failure to file these reports causes you to be exposed to a potential penalty of $10,000 to $100,000.
If you have appropriately reported the income generated by these overseas funds, than you may be eligible for amnesty from these penalties. If you didn't, you will be required to amend your tax returns (back to 2002), file, and pay the taxes, interest and penalties that arise from the amendments. You can file the forms late, and may be eligible for amnesty.
Why do I bring this up? UBS has announced that it will be soon informing 4,450 account holders that it has released their information to the US Department of the Treasury. Claiming privacy, UBS (who already turned the information over to the IRS) was refusing to notify its clients if they were included. Two accountholders sued in Swiss Court which sided with the accountholders.
The IRS will likely see any failure to comply with this amnesty program as means to begin criminal tax evasion proceedings. If you're in this situation, it would behoove you to find an attorney.
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