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Chamberlain Hrdlicka LLP attorney Jonathan Prokup on the IRS crackdown on hidden offshore bank accounts and whether a repatriation holiday would help ...
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Moving on the IRS is renewing its effort to crack down on secret Swiss bank accounts it's reopening its offshore voluntary.
-- closure program and giving the American taxpayer another chance to report offshore translation hidden asset.
Excellent work that's the question Jonathan broke up is an attorney would Chamberlain hard liquor and he joins us now.
Jonathan will it work do you think -- made it it has in the past we should mention right it it has been successful so far the IRS has gotten about 33000 tax -- to come forward over the last three years.
They've received about four and a half billion dollars in in taxes and penalties.
So there is a very good chance that -- continue to work going forward is that.
The tip of the iceberg four and half billion or is that a good chunk of it and what estimate how much money is really -- It's difficult to say precisely for the reason that it is hidden I wouldn't venture to speculate just how much there is but certainly the government thinks there's a lot more out there.
And they are continuing to go after the banks.
Overseas and trying to coordinate that with their efforts -- the question is when you're talking about all assess -- we know that some estimates are that there's five trillion dollars in assets -- corporation's US corporations are keeping overseas.
And the argument is that we should have a tax on repatriation.
Tax holiday to bring that back now some people of the administration -- -- some people the administration are against it.
One of whom is Gene Sperling we -- on a couple of weeks ago here's how he responded to that.
You know they're just is absolutely no evidence to suggest.
But doing -- another repatriation holiday would in any way meaningful way help create jobs or investment -- slightly.
They're already sitting on who can one to two trillion of -- -- -- a very low.
Are integral they're refresh rate environment Erica I'm just does not much out there our economy guys disagree with an assessment I can tell you about -- can't -- So Gene Sperling says that incentives don't matter.
With regard to bringing some of this capital back home and you say well I think that's really just speculation.
About that -- that it's not going to work -- -- first.
Let's be clear when we're talking about repatriating cash we're not talking about money being hidden overseas that's money that companies have earned overseas and under the laws of the of the internal revenue code.
Companies are allowed to keep -- and aren't taxed until they repatriated.
I think the key point is that if the government wants to encourage companies to bring that money back.
I it may very well be necessary to institute a repatriation holiday to give them incentives to do so.
How much easier could it be for me if I had that money overseas if -- do it now for the IRS.
What am -- going to gain from that.
Sure well if you're talking now about the money that is a hidden banks count yes in effect what you're being offered now is a form of an amnesty.
If you choose to participate in this offshore voluntary disclosure initiative -- BI they're basically four components to it.
First you have to file to eight years of amended tax returns reporting any on reported income.
Secondly you have to file your F bars foreign bank account reports.
Third you have to pay taxes interest and penalties do on any on reported income and lastly this is a real kicker.
You have to -- a lump sum penalty of 27 and a half percent on the highest balance in an undisclosed account during the last eight years what's.
What I have had to do if I kept it -- -- be thrown in prison maybe if they discover me right.
-- criminal liability is certainly a possibility.
Even if you're talking civil liability.
The government is is authorized to impose a penalty equal to the greater of 100000.
Dollars or 50% of the account balance at the time of the violation.
And that's for each year the violation occurs Jonathan you know your stuff I imagine your business is gonna increase as a result of the John broke up good to see if --
