The environment that taxpayers with unreported offshore bank accounts find themselves in today is downright frightening. The vision that many people have – and that politicians are only too happy to promote – is that of wealthy expats who throw Great Gatsby-esque parties, during which the attendees burn their delinquent tax notices with fondue candles as they cackle over bad jokes and gossip about people who aren’t in the room.

This vision has been the driving force behind the U.S. government’s aggressive pursuit of U.S. taxpayers with undisclosed offshore accounts. Some believe that the current economic and political climate facing foreign account holders is so hostile that it bears an uncanny resemblance to “McCarthyism,” the term that has its origins in the period of U.S. history known as the “Second Red Scare.” Beginning in 1950 and lasting until 1956, “McCarthyism” was characterized by heightened political repression against communists, as well as a campaign spreading fear of their influence on American institutions and of espionage by Soviet agents.

Originally coined to criticize the anti-communist pursuits of Republican U.S. Senator Joseph McCarthy (Wisconsin), “McCarthyism” soon took on a broader meaning. The term is now used more broadly to describe reckless, unsubstantiated accusations, as well as demonized attacks on the patriotism of political adversaries.

Has “McCarthyism” been reincarnated today, this time with the targets being U.S. persons who own unreported foreign accounts? A compelling argument can be made that the heightened scrutiny that such taxpayers receive can mean but one thing: the government has resorted to branding every taxpayer with an unreported offshore account with the letter “C” for “Criminal.”

Caught between FATCA and the draconian penalties looming over their heads like the “Sword of Damocles,” those who have been branded with the proverbial “Scarlett Letter” find themselves between a rock and a hard place. They have few choices, none of which is particularly appealing. Not surprisingly, the fear of what could happen if they make the “wrong choice” is so palpable that the thought of disclosing their foreign accounts by any means other than the IRS’s compliance-driven initiatives or the offshore voluntary disclosure program (OVDP) doesn’t even enter their mind.

This book is intended as a guide to assist tax professionals and taxpayers alike to understand the labyrinth of arcane and nebulous rules that have come to define the U.S. international tax compliance regime.

With all of the information available on the internet today relating to this topic (some of which is misleading), my goal is to provide you with a deeper understanding of foreign asset reporting, along with the U.S. government’s enforcement objectives in this highly scrutinized area of international tax compliance. This way you can make a well-informed decision of which option, if any, is right for you. Because the risks of making the “wrong” decision can be nothing short of catastrophic, this guide is not a substitute for consulting with a tax professional.

Those who are feeling overwhelmed and perhaps even discouraged by this process can seek comfort in the words of the famous poet, Dylan Thomas. They offer inspiration to those who have raised their masts and begun their Maiden voyage into the “choppy seas” of foreign asset reporting:

Do not go gentle into that good night.
Rage, rage against the dying of the light.i