US prosecutors seek tenfold increase in offshore evasion sentences

By Sanford Millar of MillarLaw A Professional Corporation On Sunday, December 17, 2017

A conviction for failure to report offshore financial account now carries a far greater risk of a lengthy prison term according to Mark Daly, senior litigation counsel at the U.S. Department of Justice. US prosecutors seek tenfold increase in offshore evasion sentences

The Journal STEP is reporting that the US DoJ will, in future, press for tax evaders to be sentenced based on the value of the undeclared offshore accounts, rather than the unpaid tax, as in previous cases. The result could be that penalties will, in some cases, be increased by a factor of ten.

The plain meaning of this change in sentencing posture is that for civil cases the DOJ in the case of FBAR enforcement and is likely to pursue the maximum civil penalties for “willful” failure to report foreign bank accounts. The maximum civil penalty is the greater of $100,000 or 50% of the highest account balance per year for up to six years.

Anyone with an undeclared foreign financial account needs to come forward and participate in one of the voluntary disclosure programs. The three programs are 1) Delinquent filing; 2)Streamline Domestic and Streamline non-resident Procedure and 3) Offshore Voluntary Disclosure Program. Each program has different qualifications and penalty structures and should be chosen only with advice of counsel.