The Jewish Chronicle Quotes Charles Ruchelman on IRS' Probe of Israeli Bank Account Holders
Charles M. Ruchelman is quoted by The Jewish Chronicle regarding the IRS's widening probe and prosecution of U.S. taxpayers with unreported Israeli bank accounts. For the full story, please see The Jewish Chronicle's website.
Excerpt taken from the article.
"A lot of Jewish people have accounts in Israel, and they may be for completely innocuous reasons," said Ruchelman, who advises many clients with foreign accounts. "They may have a house there, or relatives there. But they need to be aware of the tax implications."
While lots of people have foreign accounts, Ruchelman said, there is a "disproportionate number of American Jews with accounts in Israel."
Tax implications are triggered when the assets in those accounts exceed $10,000, requiring the filing of a Foreign Bank and Financial Account Report (FBAR), according to Ruchelman.
"A lot of people are unaware of the requirement," he said. "Even a lot of accountants don't know about it."
While the federal government has been prosecuting people with foreign accounts in Switzerland, India and Hong Kong for several years, the government's attention has now turned to Israel because of the large number of Americans with accounts there, Ruchelman said.
Recent reports by Reuters indicate that Bank Leumi, the largest commercial bank in the Jewish state, has been urging its American clients to disclose information about their accounts to government authorities.
"Israeli banks are going to cooperate [with U.S. authorities] because they want to maintain a good relationship with the United States," Ruchelman said.
If one has a foreign account over $10,000 that has not been previously disclosed, one can avoid prosecution by entering into an IRS program to voluntarily disclose that account now, and pay a penalty. Instructions and forms for entering into that program can be found at http://www.irs.gov/uac/2012-Offshore-Voluntary-Disclosure-Program.
Because each case is unique, Ruchelman advises people with foreign accounts to seek the advice of an attorney or accountant knowledgeable in the field to ensure that all rights and obligations are considered, and to determine the correct course of action.
"The Jewish community should be aware of this," he said, "and not stick their heads in the sand. They do have options, but they should move quickly."