Offshore Account Deadline Nears
ROBERT SIEGEL, host:
There is news you can use, if you happen to have a numbered Swiss Bank account, where been stashing your fortune beyond the rich of Uncle Sam all these years. For the rest of us, it's a momentary glimpse of how the other half banks, perhaps.
Thursday is the deadline for thousands of Americans who have money stored in Swiss Bank accounts to come clean with the government and experience only limited repercussions in exchange for their candor. Come Friday, it's no more Mr. Nice Guy. The IRS has gotten the Swiss banks to cooperate and those bankers who used to be infinitely discreet about their depositors are now part of the crackdown.
Barbara Kaplan is helping her clients navigate this thorny situation. She heads the New York tax practice at the law firm Greenberg Traurig and she joins us from our New York bureau. Welcome to the program.
Ms. BARBARA KAPLAN (Head, New York Tax Practice, Greenberg Traurig): Thank you.
SIEGEL: And first, how many people with this - like this is now a problem of the Swiss Bank again. How many people do you represent?
Ms. KAPLAN: I would say probably between 70 and 80 people in the New York office and others represented by my peers around the country. So, probably close to 100.
SIEGEL: Well, typically, who are these people? I mean, what kind of individuals are you talking about?
Ms. KAPLAN: These are holocaust survivors, these are the children of holocaust survivors, these are foreigners who have become U.S. citizens or U.S. residents, who are here with green cards, and then there are some which is a smaller percentage of the clients I've seen, who are business people who conducted business overseas and put their profits overseas.
SIEGEL: But as for the gunrunning drug dealers, we imagine having Swiss Bank accounts, this is not the group we're talking about here right now.
Ms. KAPLAN: I have not seen that group.
SIEGEL: Well, when we heard here from Doug Shulman, the IRS commissioner a few weeks ago, he insisted that what's available through October 15th is not an amnesty. But can you tell us about what sorts of agreements your clients are finding they can reach with the government if they have come clean?
Ms. KAPLAN: By coming into the voluntary disclosure initiative, the clients can expect that they will have to amend their income tax returns for six years, from 2003 to 2008 and pay whatever additional taxes are owed with respect to income generated from their overseas funds as well as interest on that tax and a 20 percent tax penalty.
And in addition, they're going to have to pay a 20 percent penalty for the most part on the highest balance that they maintained in their foreign accounts in that same six-year period from '03 to '08. There's an exception to the 20 percent penalty for those people who did not establish the account and who never exercised any control over it. But we haven't really seen any clients who satisfy that five percent criteria.
SIEGEL: So, that doesn't sound terrific. On the other hand, there's no prosecution for tax evasion.
Ms. KAPLAN: There's no prosecution for tax evasion and the other penalties that could be imposed will not be imposed, including penalties that if you didn't come into the program would be as high as 50 percent of the account value for each of the six years as opposed to one 20 percent penalty.
SIEGEL: Well, have you had clients who have heard all of this, looked at the numbers and said, I'll risk it. I'll stay out of the program.
Ms. KAPLAN: Absolutely.
SIEGEL: Really, and why? What's the reasoning there?
Ms. KAPLAN: In some instances, coming into the program implicates other family members and not all the family members are on-board. Some may not live in the United States, some may not feel as exposed as those who are living here. This can engender a lot of discussion among family members and some disagreement. So, sometimes I think for family peace, people decide that they're not going to come forward. Sometimes it's greed. Sometimes, it's denial - different things for different people.
SIEGEL: And I gather that in the countdown toward the Thursday deadline, you've come by lots of clients.
Ms. KAPLAN: Yes.
SIEGEL: And it's been building up as that the deadline looms.
(Soundbite of laughter)
Ms. KAPLAN: It's become somewhat of a frenzy.
SIEGEL: Well, thank you very much for talking with us about it.
Ms. KAPLAN: Thank you.
SIEGEL: Barbara Kaplan, who's the head of the tax practice at Greenberg Traurig, a law firm in New York.
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