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PAGE 2AHERITAGE FLORIDA JEWISH NEWS, JANUARY, 24, 2014 I Djampa via Wikimedia Commons. Bank Hapoalim in Jerusalem's Zion Square. By Maayan Jaffe JNS.org Americans with Israeli bank accounts may be in for a fnancial nightmare in just several months if they haven't filed their taxes prop- erly. According to Charles M. Ruchelman, a member of the Washington, D.C., law firm of Caplin & Drysdale, some Israeli banks are already no- tifying U.S. account holders that they may be disclosing the relationship between the Israeli banks and their U.S. owners to the U.S. Depart- ment of Justice, which could result in fines or even pros- ecution--for Israeli account holders who didn't inform the U.S. of the funds they have abroad. By law, Americans are required to submit 1040 tax forms to the Internal Revenue Service (IRS) each year. Those forms ask them whether or not they hold a foreign bank account. If they do, and the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the cal- endar year to be reported, they must file another form, the Report of Foreign Bank and Financial Accounts (FBAR). The IRS penalties for failing to report foreign accounts include fines of up to 50 percent of the account balance for each year of each violation. Since 2007, the United States has been aggressively working to counter tax eva- sion, going after foreign banks to find what assets Americans are hiding within, and Credit Suisse to disclose information on their U.S. account holders; prosecution followed. The banks are revealing the data because they are participating in a special program with the U.S. De- partment of Justice in order to avoid criminal prosecution themselves. The Foreign Ac- count Tax Compliance Act (FATCA) was enacted in 2010 and accepted by Switzerland in August 2013. According to multiple reports, Israeli banks have also agreed to sign on and will begin turning over information as early as July 2014. Media reports indi- cated that the Swiss branches of Bank Hapoalim, Bank Leumi, and Mizrahi Tefahot are under investigation. "Israel wants to stay on the good side of the U.S. and to be a friend and an ally, so the banks are going to cooperate with the Internal Revenue Service and the U.S. govern- ment," Caplin & Drysdale's Ruchelman told JNS.org. As part of the participa- tion in and implementation of the program, explained Ruchelman, the Israeli banks will be required to disclose to the U.S. authorities certi- fied details about U.S. held accounts, including--on an account-by-account ba- and threatening to shut them sis the highest value since out of the U.S. financial 2008, the number ofpersons system if they don't comply, affiliated with the account. Just this past year, the IRS whethertheaccountwasheld convinced UBS Switzerland in a structure (i.e. founda- Reach Every Known Jewish Family in Central Florida With a Special EW SH NE S Community Mailing Publication Date: February 7. 2014 Advertising Deadline: January 29. 2014 For more information Please call Jeff at 407-834-8787 tion), and information about transfers of funds into or out of the account. An IRS exami- nation could be triggered by the banks' disclosures to the U.S. authorities. The challenge: This ag- gressive, all-encompassing approach may pick up a lot of people not intentionally trying to hide money. Yaakov Jacob, a certified public accountantwith Philip Stein & Associates, said his firm--which has offices in Jerusalem, Belt Shemesh, and Ramat Gan is working with several Americans who have been living in Israel for decades (many since birth or since childhood) and didn't know they had to file. "Sometimes people lived here since they were three or since they were born, and their parents were U.S. citi- zens, got for them a social se- curity number and put them on the IRS' radar," Jacob told JNS.org. "Now, they have a filing requirement." Similarly, Moshe Gelbtuch, senior manager at BDO Seid- man Alliance in Brooklyn, said he seesAmerican clients, generally wealthy business- people, who traveled often to Israel and opened an account there for simplicity or to sup- port the Jewish state. "Some of them may have forgotten they opened it or it never entered their minds thatthey wo~Jld have to report it." Gelbtuch told JNS.org. He noted that at the same time. until the U.S. focused its counter tax-evasion efforts on foreign bank accounts, accountants "didn't know WASHINGTON, D.C.-The Senate Special Commit- tee on Aging today heard Holocaust survivors, their family members and Jewish community professionals call for social services to help low-income survivors live in comfort and dignity in their homes and communities. The Jewish Federations of North America praised the committee's Chairman, Senator Bill Nelson (D-FL), and Ranking Member, Sena- tor Susan Collins (R-ME), for convening the panel on this pressing issue. JFNA is submitting tes- timony for the record by William Daroff, Senior Vice President for Public Policy and Director of the Washington Office. Lee Sherman, Presi- dent/CEO oftheAssociation of Jewish Family and Children's Agencies, a member of JFNA's National Federation/Agency Alliance, offered expert tes- timony at the hearing along with others. "Far too many Holocaust survivors struggle to meet basic needs, and we have a moral responsibility to help lift them up," said Michael Siegal, chair of the Jew- ish Federations' Board of Trustees. "We applaud Chair- man Bill Nelson, Ranking Member Susan Collins and the entire Senate Special Committee on Aging for or think to ask clients... ]These accounts] simply got ignored." Gelbt.uch said right now is the time to take action. "IfI were a betting person, I don't know that I would want to take a chance. I don't think any of this is hype," he said. In 2013, six Israelis were prosecuted for having undis- closed bank accounts. Most recently, David Raminfard of Los Angeles pleaded guilty on Nov. 4 in federal court to one count of conspiracy to defraud the United States. Ac- cording to court documents, Raminfard, a U.S. citizen, maintained undeclared bank accounts at an international bank headquartered in Tel Aviv, identified in court docu- ments as Bank A. For tax years 2005 through 2010, Raminfard failed to report approximately $521,000 in in- come. The highest balance in Raminfard's undeclared ac- counts was approximately $3 million. He faces a potential maximum prison term of five years and a maximum fine of $250,000. In addition, he has agreed to pay a civil penalty to the IRS in the amount of 50 percent of the high balance of his undeclared accounts, for failing to file FBARs. Ruchelman said that for another several months, Americans are ableAo take advantage of the ~)verseas Voluntary Disclosure Pro- gram (OVDP) for people who have violated the law. This requires them to admit past violations, file old tax returns and pay a lower--though pos- sibly still substantial fine. recognizing this critical issue. The proposals dis- cussed today, coupled with the support Vice President Biden recently announced, will provide survivors with the care and programs they so desperately need." Last month, Vice Presi- dent Biden announced that the Obama Administration would take concrete steps to help Holocaust survivors living in poverty. The Admin- istration announced plans to establish a Special Envoy at the Department of Health and Human Services to act as a liaison for Holocaust survivors and the nonprofit community organizations that serve them; to cre- ate a partnership with the AmeriCorps VISTA program to dedicate volunteers to increase the capacity of community organizations to serve impoverished Ho- locaust survivors; and to explore public private part- nerships to address resource shortfalls so that community organizations can continue to serve Holocaust survivors. "The Jewish Federations of North America is pleased to be working together with the White House to lead the implementation of this initiative to serve Holocaust survivors," said Daroff. "Fed- erations and family service agencies are working tire- "[Americans with Israeli bank accounts] really need to talk to an attorney," Ruchelman said. "There is a cost to that, but doing so will be getting criminal exposure off the table so you can sleep at night." Ruchelman said part of the reason for OVDP is to give individuals who really did not know about the law a chance to make good, and to get people back into compliance and back into the system. He explained that the U.S. is losing millions of dollars per tax year, which is multiplied exponentially over decades. He added that when FATCA goes into effect, there would no longer be a chance to plead innocent or ignorant. Jacob said that people who open new bank accounts at Bank Leumi are already being asked about their U.S. citizenship. He said they are being requested to fill out a W-9 form, which enables the banks to obtain the informa- tion that will be required to turn over to the States. He also noted that once some- one is under investigation, that person cannot enter the OVDP program, so it is important that people make that move before they are turned over to the IRS. Ruchelman explained, "Whether you are inten- tionally hiding it or not, the information will be sent to the IRS... The IRS voluntary disclosure program..: could change at any moment... U.S. taxpayers should move quickly." lessly to meet the need, and we are pleased to have sup- port at the highest levels of government." Of the approximately 120,000 Holocaust survivors living in the United States today, three-quarters are over the age of 75 and about two-thirds live alone. Many of these survivors struggle to afford basic needs, such as adequate food and health- care; about half of the sur- vivors arriving in ~the U.S. after 1965 from the former Soviet Union fall beneath the poverty line. Sherman testified about the thousands of Holocaust survivors needing assis- tance. "Living in poverty, plagued by immeasurable loss, they are at risk of falling into isolation and despair," Sherman testi- fied. "It is for them--and to honor the memory of the six million Jews murdered in the Holocaust--that we commit ourselves each and every day to ensure they live with respect and dignity. It is our greatest honor to ensure that those who suffered the most heinous brutality of the last century are able to live their twilight years with dignity, comfort, and secu- rity. Holocaust survivors are living, breathing triumphs of survival over bigotry and hatred."