If you qualify for Medicare, new insurance marketplaces aren’t for you While the Obama administration is stepping up efforts encouraging uninsured Americans to enroll in health coverage from the new online insurance marketplaces, Kaiser Health News reports officials are planning a campaign to convince millions of seniors to please stay away – don’t call and don’t sign up.

While the Obama administration is stepping up efforts encouraging uninsured Americans to enroll in health coverage from the new online insurance marketplaces, Kaiser Health News reports officials are planning a campaign to convince millions of seniors to please stay away – don’t call and don’t sign up.
To reinforce the message, the 2014 “Medicare & You” handbook – the 100-plus-page guide that will be sent to 52 million Medicare beneficiaries next month — contains a prominent- notice: “The Health Insurance Marketplace, a key part of the Affordable Care Act, will take effect in 2014. It’s a new way for individuals, families, and employees of small businesses to get health insurance. Medicare isn’t part of the Marketplace.”

Enrollment in health plans offered on the marketplaces, also called exchanges, begins Oct. 1 and runs for six months. Meanwhile, the two-month sign-up period for private health plans for millions of Medicare beneficiaries begins Oct. 15. In that time, seniors can shop for a private health plan known as Medicare Advantage, pick a drug insurance policy or buy a supplemental Medigap plan.
And in nearly two dozen states, some Medicare beneficiaries who also qualify for Medicaid may be choosing private managed care plans. None of these four kinds of coverage will be offered in the health law’s marketplaces.
Since many of the same insurance companies offering coverage for seniors will also sell and advertise policies in the marketplaces, people may have a hard time figuring out which options are for them.
While Medicare officials steer seniors away from the marketplaces, there is nothing in the health law that prevents beneficiaries from signing up for markertplace plans. f they do, they will not qualify for premium tax credits for the marketplace plans.
These plans may appeal to wealthy seniors – about 5 percent of Medicare beneficiaries — who pay higher premiums for Medicare based on their income and assets, said Cubanski. But for the vast majority of seniors, Medicare’s benefit package is better and more affordable compared to marketplace coverage.
Here are answers to the most common questions about Medicare and the new healthcare marketplaces:
— Will I lose Medicare coverage? No.

— Do I need a new Medicare card? No.
— Do I have to re-enroll in my Medicare Advantage or supplement plan through the marketplace? No, these policies are not sold in the marketplaces.
— Will seniors in Medicare have to buy supplemental insurance? No.

— Will I be fined if I don’t buy coverage in the health marketplaces? No. As long as you have Medicare Part A, which is free and covers hospitals, nursing homes and hospice, you already have insurance, so you are not subject to the penalty that most uninsured adults under 65 will have to pay. Read the story.

Posted by Patricia Borns at 11:18 AM in Healthcare Reform, Insurance

Read more here: http://miamiherald.typepad.com/health/2013/08/if-you-qualify-for-medicare-new-insurance-marketplaces-arent-for-you.html#storylink=cpy

Reminder: Employee Notices of Coverage Options Are Due October 1

On July 2, 2013, the U.S. Department of the Treasury announced that penalties under the Employer Shared Responsibility provisions of Internal Revenue Code (“Code”) § 4980H and related reporting requirements under § 6055 and § 6056 of the Code have been delayed until 2015. IRS Notice 2013-45 provided details on this transitional relief, confirming that the relief is limited to the Employer Shared Responsibility penalty provisions and information-reporting requirements.

This transitional relief did not delay the requirement to provide notice to employees of Exchange coverage options. These notices must still be provided to all current employees by October 1, 2013.

By way of background, under the Affordable Care Act (ACA), individuals will be able to enroll in state or federally facilitated Health Insurance Marketplace (aka “Exchange”) coverage beginning October 1, 2013, with initial coverage beginning effective January 1, 2014. The ACA requires employers to provide a notice to current employees with information regarding their coverage options, including information on the Exchange by October 1, 2013, and, thereafter, to each new employee at the time of hire, or no later than within 14 days of an employee’s start date.

As a reminder, almost all employers are subject to the notice requirement, unlike the Employer Shared Responsibility provisions, which generally apply only to employers with at least 50 full-time equivalent employees. Employers must provide these notices to all employees, regardless of their plan enrollment status or whether they are part-time or full-time. Notices are not required for dependents or other individuals who are not employees.

The notices must include specified information about the services provided by the Exchange and how to contact the Exchange; information about the employer and any employer-sponsored coverage available; and must advise the employee of information he or she will need to gather in order to apply for coverage through an Exchange. Notices must be free of charge and can be sent by first-class mail, or electronically if the U.S. Department of Labor’s electronic disclosure safe harbor rules are met.1

For More Information

IRS Notice 2013-45
For additional details, see the May 10, 2013 Eye on Washington coverage of the ACA Section 1512 notice requirement
U.S. Department of Labor (DOL) Technical Release 2013-02
Model Notice to Employees of Coverage Options (for employers who offer health plans)
Model Notice to Employees of Coverage Options (for employers who do not offer a health plan)
Additional information for employers regarding the Affordable Care Act is available at http://www.healthcare.gov and http://www.dol.gov/ebsa/healthreform

Brazil Insurer Continues Outperforming After World’s Largest IPO

August 23, 2013

by Francisco Marcelino and Ney Hayashi

BB Seguridade SA, the Brazilian insurer that held the world’s largest initial public offering this year, is outperforming every other IPO from an emerging- market financial company this year. The rally isn’t over yet, according to a survey of analysts.

Since it started trading on April 29, BB Seguridade has climbed 8.6 percent, the biggest gain among the 12 financial firms from developing economies that held an IPO of at least $100 million this year, data compiled by Bloomberg show. The Brasilia-based insurer may rise 22 percent more in the next 12 months, according to a Bloomberg survey of seven analysts.

BB Seguridade is gaining market share by taking advantage of the distribution network at Banco do Brasil SA, its controlling shareholder and Latin America’s biggest bank by assets. Revenue for the industry has been expanding at about 20 percent a year, according to the Brazil insurance federation, sustained by rising employment, higher wages and the expansion of Brazil’s middle class.

“BB Seguridade is rising because of fast growth, an amazing margin and dividends,” Rodolfo Amstalden, an equity analyst at consulting firm Empiricus Research in Sao Paulo, said in a telephone interview. “BB isn’t a cyclical case. It isn’t a commodities case. It’s sheltered from economic conditions.”

Shares Rally

BB Seguridade raised 11.5 billion reais ($4.7 billion) in its April IPO, selling shares at 17 reais apiece. They dipped below the offer price two months later, before rallying to as high as 20.10 reais on Aug. 12. The shares gained 0.4 percent to 18.55 reais at 10:36 a.m. in Sao Paulo.

“BB Seguridade’s IPO was a great opportunity for larger investors willing to get into Brazil’s insurance market,” Marcelo Labuto, the firm’s chief executive officer, said in a telephone interview from Brasilia. “BB Seguridade standalone was bigger than all publicly traded insurance companies in Brazil.”

Gains since the IPO outpaced the 5 percent advance of UPDC Real Estate Investment Trust/Nigeria, the second-best performing emerging-market IPO from a finance company this year. Seven of the 12 companies have declined since their IPOs. The data excludes MPHB Capital Bhd, which sold shares in June to existing investors.

The MSCI Emerging Market Insurance index of 24 companies has dropped 4.8 percent since BB Seguridade started trading on April 29. China Life Insurance Co., the biggest company by market value on the gauge, dropped 8.7 percent in the same period.

Insurance Offerings

BB Seguridade controls all of Banco do Brasil’s insurance businesses, including joint ventures with Madrid-based Mapfre SA. The firm offers life, health and property insurance.

Insurance premiums climbed 37 percent to 11.5 billion reais in the second quarter from a year earlier. In the first six months of this year, insurance revenue nationwide increased 20 percent from a year earlier and may expand 19 percent in 2013, Brazil’s insurance federation CNseg said this month.

Demand for insurance is rising after Brazil added about 35 million people to its middle class in the past decade, according to research-company Datapopular. In the same period, the jobless rate declined by half to 5.6 percent in July.

BB Seguridade’s second-quarter adjusted net income rose 31 percent to 550.3 million reais from a year earlier, the company said last week. The insurer plans to pay 817.8 million reais in dividends to shareholders, or 41 centavos a share, on Aug. 30, according to its earnings statement. The company’s policy is to pay shareholders 80 percent of net income in dividends.

‘Strong Earnings’

“BB Seguridade posted very strong earnings,” Banco Bradesco BBI SA analysts including Carlos Firetti wrote in a note to clients last week. The analysts, who rate BB Seguridade their top pick among banks and insurance companies they cover, are “confident that results may continue improving in the coming quarters.”

Brazil’s insurance industry will continue growing faster than the overall economy, pushed by the growing middle class, said BB Seguridade’s Labuto, who expects the company to outperform the market. Since 2003, Brazilian consumers have been opening bank accounts and tapping credit to buy cars and houses, and they want to protect those purchases, he said.

“We have the appropriate products and Banco do Brasil’s powerful network distribution with branches in almost every Brazilian city,” he said. “Brazil is still forming a huge middle class, which gives us the confidence growth is certain and sustainable in coming years.”

Other Options

Other companies are better poised to benefit should Brazil’s economy rebound, said Joao Pedro Brugger, a portfolio manager at Leme Investimento. He cited brewer Cia. de Bebidas das Americas and retailer Cia. Brasileira de Distribuicao Grupo Pao de Acucar.

“We still have the same opinion we had in the IPO, that in terms of price the stock is not attractive,” Brugger, who helps manage about 350 million reais, said in a telephone interview from Florianopolis, Brazil. “It’s a good company with a strong market position, but you’d have to get it for the right price.”

BB Seguridade trades at 16.6 times its 2014 forecast earnings, which compares with a ratio of 9.5 for the MSCI Emerging Markets Index, according to data compiled by Bloomberg.

BB Seguridade increased its share of Brazil’s insurance- market revenue to 25.2 percent in the second quarter from 21.6 percent a year earlier, it said last week. The company expects return on equity, a measure of profitability, to range from 37 percent to 41 percent. ROE was 39 percent last quarter.

“The strong second quarter and the 2013 guidance leave us more bullish,” Grupo BTG Pactual analysts including Eduardo Rosman wrote in a report to clients last week. BB Seguridade offers a “unique combination of strengths,” with “solid growth prospects” and “juicy dividends,” the analysts wrote

Editors: Steve Dickson, Steven Crabill

European stocks slide ahead of confidence data

By Sara Sjolin

LONDON (MarketWatch) — European stock markets moved lower on Friday, with oil firms leading the way south, ahead of the latest reading of consumer confidence in the euro zone, due in the afternoon. The Stoxx Europe 600 index XX:SXXP +0.01% lost 0.4% to 302.45, after posting the biggest gain in three weeks on Thursday. Oil firms added pressure on the index, tracking oil prices lower. Shares of Total SA FR:FP +0.85% TOT +1.11% dropped 1.1% in Paris and BP PLC UK:BP +0.31% BP +0.27% shaved off 0.5% in London. On a more upbeat note, shares of FLSmidth & Co. AS DK:FLS +6.92% climbed 4% after the engineering firm reported second-quarter earnings. Among country-specific indexes, the U.K.’s FTSE 100 index UK:UKX +0.27% dropped 0.4% to 6,423.61, while France’s CAC 40 index FR:PX1 -0.37% lost 0.8% to 4,028.82. Germany’s DAX 30 index DX:DAX -0.01% fell 0.3% to 8,370.77.

Female Travelers To India Beware

Journalist Gang-Raped in Mumbai
Victim, 22 years old, is hospitalized; one man arrested.

By SHREYA SHAH

NEW DELHI—Five men raped a 22-year-old woman in an abandoned textile mill in central Mumbai Thursday, Indian police said, casting further doubt over the safety of women in the country.

The woman, an intern at an English-language magazine in Mumbai, was on assignment taking photographs of dilapidated buildings in the Mahalaxmi area of the city, Mumbai’s police chief Satyapal Singh said at a news conference Friday.

The woman was with a 21-year-old male companion. The assailants tied his hands with his belt and raped the woman from 5:30 p.m. to 7 p.m., an official at N. M. Joshi police station said. Medical tests confirmed the rape, he said.

The woman, who cannot be named according to Indian law, was admitted to Jaslok Hospital Thursday evening suffering internal injuries. In a news release, the hospital said her condition is stable.

Mr. Singh said one man has been arrested and four other suspects identified. The arrested man admitted he was present during the attack, Mr. Singh said, without elaborating. Friday morning, police questioned as many as 25 people, the officer at N. M. Joshi station said.

The attack comes as the trial of five people accused in the December gang rape and murder of a 23-year-old student on a moving bus in Delhi enters its final phase. That crime, in which the student’s male friend was also badly beaten, sparked nationwide protests and prompted the government to introduce harsher penalties for crimes against women.

There were 24,915 reported rapes in India in 2012, according to the National Crime Records Bureau, including 233 in Mumbai. The victims in almost half the Mumbai cases were between 14 and 18 years old.

Activists say the number of rapes is much higher, as many go unreported. India also has a poor record on convictions, with only around a quarter of alleged rapists convicted in 2010. Rape trials can also drag for years.
Journalist organizations in Mumbai said they will hold a “silent protest” rally Friday afternoon at Hutatma Chowk, a square in the south of the city. A joint statement by the city’s Press Club and other journalist groups said the protest will be against the deteriorating law and order situation in Maharashtra and Mumbai.

According to the statement, a delegation of Press Club representatives and other journalists met Mr. Singh, the police commissioner, Thursday night, telling him that the police had failed to provide safety and security to ordinary citizens.
“The police chief was also told that the perception gaining ground was that in most cases the perpetrators of such crimes were never traced, and the victims were left without justice,” the statement said.

It added that journalist organizations will also meet Maharashtra’s home minister R. R. Patil and chief minister Prithviraj Chavan to press for swift action in this case.

Brazil launches $60 bln program to boost real

By Karen Friar

LONDON (MarketWatch) — Brazil’s central bank will begin a $60 billion currency-intervention program on Friday, aimed at supporting the real USDBRL +0.0383% , which recently fell to its lowest level against the U.S. dollar since December 2008. Under the program, announced Thursday, the central bank will offer $3 billion on the spot market and in currency swaps each week until the end of 2013, according to media reports. On Friday, the real slipped 0.2% to $0.4097, according to FactSet.

Reminder: Employee Notices of Coverage Options Are Due October 1

Although I rarely blog about subjects that are not internationally related. I believe that The Affordable Care Act being one subject that affects us all, and since its requirements become effective October 1st, this information needs to be disseminated to as many companies and individuals as possible.

On July 2, 2013, the U.S. Department of the Treasury announced that penalties under the Employer Shared Responsibility provisions of Internal Revenue Code (“Code”) § 4980H and related reporting requirements under § 6055 and § 6056 of the Code have been delayed until 2015. IRS Notice 2013-45 provided details on this transitional relief, confirming that the relief is limited to the Employer Shared Responsibility penalty provisions and information-reporting requirements.

This transitional relief did not delay the requirement to provide notice to employees of Exchange coverage options. These notices must still be provided to all current employees by October 1, 2013.

By way of background, under the Affordable Care Act (ACA), individuals will be able to enroll in state or federally facilitated Health Insurance Marketplace (aka “Exchange”) coverage beginning October 1, 2013, with initial coverage beginning effective January 1, 2014. The ACA requires employers to provide a notice to current employees with information regarding their coverage options, including information on the Exchange by October 1, 2013, and, thereafter, to each new employee at the time of hire, or no later than within 14 days of an employee’s start date.

As a reminder, almost all employers are subject to the notice requirement, unlike the Employer Shared Responsibility provisions, which generally apply only to employers with at least 50 full-time equivalent employees. Employers must provide these notices to all employees, regardless of their plan enrollment status or whether they are part-time or full-time. Notices are not required for dependents or other individuals who are not employees.

The notices must include specified information about the services provided by the Exchange and how to contact the Exchange; information about the employer and any employer-sponsored coverage available; and must advise the employee of information he or she will need to gather in order to apply for coverage through an Exchange. Notices must be free of charge and can be sent by first-class mail, or electronically if the U.S. Department of Labor’s electronic disclosure safe harbor rules are met.1

For More Information

IRS Notice 2013-45
For additional details, see the May 10, 2013 Eye on Washington coverage of the ACA Section 1512 notice requirement
U.S. Department of Labor (DOL) Technical Release 2013-02
Model Notice to Employees of Coverage Options (for employers who offer health plans)
Model Notice to Employees of Coverage Options (for employers who do not offer a health plan)
Additional information for employers regarding the Affordable Care Act is available at http://www.healthcare.gov and http://www.dol.gov/ebsa/healthreform

This information was obtained from a ADP Eye on Washington Tweet.

Europe stocks drop as tapering concerns hit mood

By Sara Sjolin, MarketWatch

LONDON (MarketWatch) — European stock markets dropped on Monday, tracking losses seen overnight in Asia and last week in the U.S., where worries over rising Treasury yields and jitters over monetary policy spooked investors.

The Stoxx Europe 600 index XX:SXXP -0.44% gave up 0.4% to 305.17, erasing a 0.3% gain from Friday.

Banks posted some of the biggest losses in the pan-European index, with UniCredit SpA IT:UCG -3.93% off 1.5%, Deutsche Bank AG DE:DBK -1.05% DB +0.89% down 1% and Banco Santander SA ES:SAN -2.10% SAN +2.23% 0.9% lower.

Shares of Glencore Xstrata PLC UK:GLEN -2.30% erased 1.7% after reports said the resource giant is expected to write down the value of assets from recently acquired Xstrata. A representative from the firm declined to comment. Glencore Xstrata reports first-half earnings on Tuesday.

On a more upbeat note, shares of Atlas Copco AB SE:ATCOA +3.66% climbed 2.1% on news the Swedish engineering group will buy Edwards Group Ltd. EVAC +1.20% for $10.50 a share in cash, valuing the transaction at around $1.6 billion, including debt.

More broadly, investors were cautious of placing any big positions amid uncertainty over the U.S.’s monetary-easing program. Federal Reserve Chairman Ben Bernanke has said any tapering of the bank’s $85-billion-a-month asset purchases will only happen if data improve, and recent jobless claims and an improvement in core retail sales have added to speculation it could happen as soon as September.

Reuters Enlarge Image
European stocks drop on Monday amid concerns the U.S. Federal Reserve will taper its easing program.
The concerns pushed the yield on the 10-year U.S. Treasury to hit the highest level in two years on Friday. In return, the Dow Jones Industrial Average DJIA -0.20% suffered its biggest weekly percentage drop and point loss of 2013.

The negative mood also spilled over into the new trading week in Asia, where most markets closed lower.

On Wednesday, minutes from the Fed’s latest policy-setting meeting will be released, which could provide more information about the central bankers’ view on the tapering process.

Among country-specific indexes in Europe, the U.K.’s FTSE 100 index UK:UKX -0.39% dropped 0.3% to 6,481.84, while France’s CAC 40 index FR:PX1 -0.73% lost 0.7% to 4,093.81. Germany’s DAX 30 index DX:DAX -0.31% shaved off 0.7% to 8,331.95.

Sara Sjolin is a MarketWatch reporter based in London. Follow her on Twitter @sarasjolin.

Overseas Americans: Time to Say ‘Bye’ to Uncle Sam?

Chased by the U.S. Government, Thousands Are Severing Ties With America. Here’s What You Need to Know.

As required by law, the IRS compiles a list of those who renounce their citizenship, and the names are published in the Federal Register.

By LAURA SAUNDERS and LIAM PLEVEN

Here is a sign that life is getting complicated for U.S. taxpayers with assets abroad: More of them are deciding they are better off cutting official ties with America.
In the first half of 2013, 1,809 people renounced their American citizenship or permanent-resident status, according to a tally by Andrew Mitchel, a tax lawyer who tracks U.S. data. At that pace, the 2013 total would double the previous high of 1,781 renunciations in 2011.

Daniel Kuettel, a Colorado native who lives near Zurich, says he gave up his U.S. citizenship in October because he feared he wouldn’t be able to get a mortgage now that some Swiss banks are cutting ties with American clients.
“It was a really difficult decision. I had to think about what was best for me and my family, to reduce the risk,” says Mr. Kuettel, a 41-year-old software developer. He says his income was below the limit the U.S. allows overseas taxpayers to exempt and he owed no U.S. taxes.

The increase in renunciations is one sign that ordinary Americans who have lived and worked abroad for years, as well as green-card holders in the U.S. and overseas, believe they are at growing risk because of the intensifying government pursuit of undeclared foreign assets.

The crackdown started in the wake of the 2001 terrorist attacks, and it gathered force after Swiss banking giant UBS AG agreed in 2009 to pay $780 million to settle charges it had helped U.S. taxpayers hide assets.
Since then, more than 80 U.S. taxpayers have been criminally charged, and Switzerland’s oldest bank, Wegelin & Co., closed down after pleading guilty to helping U.S. taxpayers hide more than $1.2 billion abroad.

On Friday, a prominent Swiss lawyer pleaded guilty in U.S. court to helping U.S. taxpayers hide millions of dollars abroad.

U.S. officials are enforcing rules established by Congress—some widely ignored for years, and others added more recently—that threaten stiff penalties and even prison for failure to comply. The crackdown has brought more than $6 billion in taxes and penalties into U.S. coffers, and experts say another $5 billion is in the pipeline. A representative for the IRS declined to comment.

Much of the money comes from well-heeled taxpayers. The top 10% of taxpayers who went through one of the Internal Revenue Service’s limited-amnesty programs had account balances over $4 million, the U.S. Government Accountability Office estimated in a March report. The programs are one way for taxpayers who have missed past filings to come into compliance.

But many U.S. taxpayers who aren’t wealthy also are finding it harder to attend to routine financial matters abroad, because some foreign institutions don’t want to face the cost of complying with U.S. requirements.
Amid the crackdown, some face stiff U.S. tax bills and crippling fines over undeclared assets. Paying lawyers and accountants to help meet the various reporting and filing requirements routinely costs at least $1,000 a year, and often much more, experts say.
Other people say they are considering whether to renounce but are reluctant to take such a drastic step. Renouncing can cause additional complications, including another steep bill because of an exit tax the U.S. imposes on those who meet certain income or asset thresholds.

Although the U.S. State Department doesn’t keep official statistics, it estimates that 7.2 million U.S. citizens live abroad. And the U.S. Department of Homeland Security estimates there were 13.3 million green-card holders living here as of Jan. 1, 2012.
Despite the campaign against undeclared accounts, U.S. taxpayers filed only 825,000 foreign-account reports last year—meaning that millions of people likely aren’t complying with the law.

“It’s clear that compliance is dismal, and also why the IRS is being aggressive in its enforcement efforts,” says Jeffrey Neiman, a former federal prosecutor now practicing law in Ft. Lauderdale, Fla.

So many people could be affected by the crackdown that mass-market tax preparer H&R Block has expanded services for taxpayers with international ties. In May, the company launched a tax-preparation service via the Internet that is targeted at expatriates and highlights the firm’s ability to help taxpayers with unfiled prior-year returns.

U.S. laws and rules provide few options for people who are in a showdown with Uncle Sam. Here is some of what U.S. taxpayers need to know:
Understand what is different about the U.S. Unlike almost all other countries, the U.S. taxes citizens and permanent residents on all income, wherever it is earned in the world. So a U.S. taxpayer living in India could owe U.S. levies on income from a British investment.
The U.S. tax code does allow taxpayers living overseas an exemption for wages earned abroad of up to about $100,000, plus a housing allowance, but taxpayers must file a return to claim the benefits.

Tax treaties might help U.S. citizens or green-card holders who live abroad avoid double taxation, but there can be gaps, experts say. For example, treaties typically don’t provide an offset for foreign sales or value-added taxes. And if the tax rate is lower abroad than in the U.S., the U.S. taxpayer could owe the difference to Uncle Sam.
The U.S. also has an expansive definition of who is a citizen. It includes people born on U.S. soil as well as people born to U.S. citizens living abroad.

Kevin Packman, a partner with law firm Holland & Knight in Miami, has a Canadian client who was born in the U.S. to Canadian parents but moved to Canada as an infant. “She had no idea she was a U.S. citizen until she was nearly 50,” he says. Experts say there are many similar “accidental citizens.”
Know what has changed. While U.S. taxes on world-wide income have existed for decades, experts say laws regarding such income were seldom enforced.

That changed after the attacks of Sept. 11, 2001, in part because of concerns about terrorism. In 2004, Congress imposed severe penalties—up to $100,000 or 50% of the account, whichever is greater, per year—on U.S. taxpayers who choose not to tell the IRS about foreign financial accounts totaling $10,000 or more.
Critics point out that this penalty is for not filing a form, not for evading taxes. Bryan Skarlatos, a New York partner with law firm Kostelanetz & Fink who has handled hundreds of offshore accounts cases, says the total includes more than a dozen in which the tax and interest owed on offshore accounts was less than $20,000. Yet the IRS assessed penalties of more than $1 million, he says. The IRS declined to comment.

U.S. officials ramped up their campaign after the 2009 settlement with UBS. As part of the deal, the Swiss bank turned over the names of more than 4,000 U.S. taxpayers with secret accounts. Other banks have since made payments to the U.S. and named names.
In 2010, Congress passed the Foreign Account Tax Compliance Act, known as Fatca, which requires further disclosures by U.S. taxpayers with offshore accounts. The law also requires foreign financial institutions to report information to the IRS about U.S. account holders or face steep costs for not doing so.

Important Fatca provisions have been postponed until July 1, 2014, but the law has a long reach. For example, it could require a foreign-based trust to report information to the IRS about a beneficiary who holds a green card, even if that person gets no money from the trust and doesn’t know it exists, says Dean Berry, a partner with law firm Cadwalader, Wickersham & Taft.
Accidental tax cheats may be able to avoid large penalties. The IRS has a limited-amnesty program that offers protection from criminal prosecution, typically in exchange for stiff penalties.
Taxpayers deemed less culpable—for instance, because they inherited money in a foreign account they didn’t touch—can face lesser penalties. But the exceptions are often narrowly defined.
There are other options. People who have already entered the IRS’s limited-amnesty program sometimes choose to opt out. That leaves them vulnerable to a regular IRS audit, though the penalties are often lower.
But there are risks: Outside the program, there is less protection from prosecution and penalties can be higher, although experts say both outcomes are rare.

Advisers often recommend that taxpayers whose violations were unintentional and haven’t entered the limited-amnesty program should consider making “quiet disclosures” instead. That means catching up with back returns as well as filing them in the future.

The IRS hasn’t officially sanctioned such filings, and going this route may not offer protection against prosecution. But experts say the IRS seldom challenges quiet disclosures. In practice, says Mr. Skarlatos, the IRS almost never looks back more than six to eight years.

Taxpayers need to be able to show their violations weren’t willful, however. Experts say the evidence could include never having filed a U.S. return if you live abroad, having the undisclosed account in the country where you live, rather than a tax haven, or not having lived in the U.S. for many years. It also helps to have little to no income earned in the U.S. and not to hold the undisclosed account within a trust or foundation.

Expatriation can have stiff costs of its own. People who renounce often have to certify they have complied with U.S. tax laws for the past five years. That means expatriation is a bad strategy for cleaning up past problems.
In addition, U.S. citizens and some green-card holders who formally expatriate are treated as though they sold their property on the day before they renounce. There are few exceptions, says Stow Lovejoy, another lawyer with Kostelanetz & Fink in New York.

Such people owe an exit tax if their net worth is $2 million or more or their average annual income tax for the past five years is greater than $155,000. The exit tax is due on net gains, above an exclusion of $668,000. Deferred income in IRAs and some other tax-deferred accounts becomes taxable at ordinary rates, up to 39.6%, according to Mr. Lovejoy.

Expatriation can also bring severe estate-tax consequences. The U.S. heirs of people who paid an exit tax often owe a 40% tax on assets they inherit from the expatriate, whether the assets are in the U.S. or not. Unlike with typical estates, there usually isn’t a $5.25 million exemption.
In addition, law requires that the names of people who surrender their citizenship be published by the government, which some consider embarrassing.

At the same time, there are important exceptions to the exit tax. For example, people who have been dual citizens from birth can be exempt. For more information, see the instructions to IRS Form 8854.

Green-card holders might have other options. People with permanent-resident status who turn in their green cards are subject to the exit tax if they have held the card in at least eight of the previous 15 years. As with citizens who renounce, their names are also required to be published.
However, under complex treaty provisions the U.S. has with some countries, years when a green-card holder lives abroad might not be included in the eight-year tally. So careful planning can help some holders stay under this threshold.
Cushion the blow of U.S. taxes and disclosure with planning. Although the U.S. rules are strict, there is room to maneuver.

Cadwalader’s Mr. Berry points out that a wealthy person who plans to expatriate might be able to use the U.S. gift-tax exemption of $5.25 million per individual to shift assets into a trust in order to reduce total assets enough to avoid the exit tax.

If trust assets are used to purchase a life-insurance policy, then U.S. heirs could inherit cash from the expatriate who isn’t subject to the special inheritance tax, he adds.
In some cases, a wealthy family may choose to have one family member expatriate and hold assets for the benefit of the rest of the family. Using a “foreign grantor trust,” the non-U.S. person could hold assets and make taxfree gifts to other family members who are U.S. citizens or green-card holders. However, the non-U.S. person is often required to have authority to revoke the trust and keep the assets, giving that person enormous power.

Write to Laura Saunders at laura.saunders@wsj.com and Liam Pleven at liam.pleven@wsj.com

Philippine Death Toll Rises in Worst Sea Tragedy in Five Years

Philippine authorities said the death toll from the collision of a passenger ferry and a cargo ship in Cebu province has increased to 52, making it the worst such tragedy for the country since June 2008. Sixty-eight people are still missing as efforts to contain an oil spill intensify.

A total of 750 passengers and crew members from M/V St. Thomas Aquinas and cargo vessel M/V Sulpicio Express 7, which collided on the evening of Aug. 16 have been rescued, Commander Winiel Azcuna of the Coast Guard station in Cebu said by phone. As much as 30,000 liters [7,920 gallons] of oil have leaked from the sunken passenger ship, and containment and coastal clean-up operations are ongoing, Azcuna said.

The passenger vessel, which has an authorized capacity of 1,010 people and 160 units of twenty-foot containers, came from Surigao and Nasipit port and was scheduled to arrive in Cebu for a stopover at 10 p.m. on Aug. 16 before heading to Manila, owner 2GO Group Inc. said on its website. 2GO said it’s flying in international oil spill experts and several Japanese technical divers to assist in containing the oil spill.

The cargo vessel is owned by Philippine Span Asia Carrier Corp. formerly known as Sulpicio Lines Inc. Sulpicio owned M/V Dona Paz which collided with an oil tanker and sank in December 1987, killing more than 4,000 people in the world’s worst peacetime shipping tragedy. It also owned M/V Princess of the Stars, which capsized in June 2008 and killed more than 800 people as typhoon Fengshen lashed the central Philippines.

Divers retrieved 11 bodies this morning before halting operations due to high waves and strong winds, Azcuna said.

The passenger ferry had 20,000 liters [5,280 gallons] of diesel fuel and 120,000 liters [31,680 gallons] of crude fuel in its fuel tank, while 20,000 liters of lube oil were being used by the engines before the incident, 2GO said. M/V St. Thomas Aquinas carried mostly agricultural products, it said.

–Editors: Colin Keatinge, Clarissa Batino