If a debt is canceled or forgiven, other than as a gift or bequest, the debtor generally must include the canceled amount in gross income for tax purposes. A debt includes any indebtedness for which the debtor is liable or which attaches to property the debtor holds.
106 Swiss banks have signed agreements to provide information about U.S. account holders.
“The current Offshore Shore Disclosure Program (OVDP) began in January 2012 continues until it is terminated by the Service. Taxpayers whose names have yet to be disclosed to the IRS may apply for the program. Those accepted to OVDP must amend their last eight years of income tax returns and pay additional taxes, interest and penalties They must also file eight years of special reports for foreign accounts, known as FBARs. The IRS will then assert a penalty of up to 27 1/2% of the highest balance in the offshore accounts. Taxpayers who are dissatisfied with the penalty regime may opt out and might receive lower penalties but the IRS reserves the right to assert even higher penalties if it finds the offshore depositor’s pleas for mercy unpersuasive.”