The article is mostly a review of the history of the offshore initiative with a peek into where it is going. Excerpts from the peek into the future are (emphasis supplied in bold by JAT):
Since the 2012 OVDI asserts an offshore penalty based on foreign ﬁnancial accounts and asset valuations, for many with smaller ﬁnancial account values the aggregate offshore penalty determination, even for multiple years, may likely be less outside the OVDI. Indications are that those opting out will be treated fairly, based upon any unique factual scenario. For those participating in the OVDI, is an “opt out” based on a unique factual scenario a viable alternative to the OVDI?
There are rumors regarding ongoing “John Doe” summons activity seeking to force foreign ﬁnancial institutions to deliver account-holder information to the U.S. government as well as possible indictments of foreign ﬁnancial institutions. Recently, several foreign institutions have advised their account holders to consult U.S. tax advisors regarding the IRS offshore voluntary disclosure program and their U.S. tax reporting relating to their foreign ﬁnancial accounts. It is reasonable to assume that such institutions will take whatever action is necessary to avoid being indicted, beginning with the delivery of information regarding account holders to the U.S. government.
It is likely that ongoing enforcement efforts will require foreign ﬁnancial institutions doing business in the United States to disclose account holders having relatively small accounts and earnings. There have been rumors of discussions regarding accounts having a high balance of the equivalent of $50,000 at any time between 2002 and 2010. U.S. persons having interests in foreign ﬁnancial accounts should not ﬁnd comfort in a belief that their foreign ﬁnancial institution will somehow refrain from disclosing very small accounts in the current enforcement environment. Those who think too long may be sorely surprised at the high level of ultimate cooperation of their institution with the U.S. government.
Taxpayers having undisclosed interests in foreign financial accounts must consult competent tax professionals before deciding to participate in the 2012 OVDI. Many taxpayers will decide to submit a voluntary disclosure based on a personal desire to come into compliance now that they are aware of the FBAR and other foreign account reporting requirements. Others may simply want to move on with their lives. Some may decide to risk detection by the IRS and the imposition of substantial penalties, including the civil fraud penalty, numerous foreign information return penalties, and the potential risk of criminal prosecution. Although the 2012 OVDI penalty regime may seem overly harsh for many, the decision to participate should include an economic analysis of the taxpayers projected future earning power that could be generated from the funds held offshore. Participating taxpayers may well beneﬁt by repatriating stagnant foreign funds into a recessionary domestic economy with a suffering real estate market and business opportunities lurking behind every corner.