If you have unreported foreign bank accounts and assets, you will want to rethink your current status when you see how high the IRS is raising the stakes. A recent Forbes article by Robert W. Wood titled “Forbes Undisclosed Foreign Bank Accounts? They’re Even More Explosive Now“ makes clear how the Agency is using its generous resources to go after and prosecute tax evaders who, in spite of several years of tax amnesties, are still reluctant to fully disclose their accounts.
When it comes to offshore account disclosure, don’t mess around with the IRS; seek tax relief now! If you are playing IRS roulette with your foreign accounts, here are five key points about offshore compliance you will want to know:
All Worldwide Income Must be Reported. No matter where American citizens reside, they are obligated to file a tax return, report their assets and pay (if applicable) federal income taxes.
Penalties for Failure to File and FBAR Non-Compliance are Huge – and very serious. American citizens who have not reported their income or assets could face the following:
- IRS penalties that can exceed 100% of the value of the asset plus interest.
- FBAR fines that start at $10,000 for each non-willful violation. A willful penalty is the greater of $100,000 or 50% of the account balance for each violation (year of non-filing). Important note: the criminal statute of limitations is six years. The statute of limitations on civil tax fraud never expires.
- FBAR non-compliance tax issues are very serious. Criminal sanctions by the U.S. Department of Justice (DOJ) can be as much as up to 5 years in prison.
Don’t Consider “Quiet Disclosure” – Many people think they can quietly close their account and correct past returns and FBAR’s without being noticed. The IRS discourages quiet disclosure and treats it the same as they do non-disclosure.
Voluntary Disclosure; The Only Way To Go – Coming clean with the IRS means you will pay back taxes and penalties but not be prosecuted. In a previous blog post, I reported on new IRS procedures for “low risk” Americans living abroad or dual citizens that would make it easier for them to report their foreign assets. For some, this tax relief program might be easier and cheaper than the Offshore Voluntary Disclosure Program (OVDP), but not in all cases.
If you have unreported offshore assets or may be a “low risk” candidate, you need IRS tax relief now before the bar gets raised again. Hire the services of a tax attorney or Certified Tax Resolution Specialist who can let you know what your options are and help you resolve this serious IRS tax issue.
More Tax Help, IRS News and Tax Relief Tips:
- IRS Help for Americans with Foreign Income
- To Avoid Tax Issues-Americans Give Up Passports
- Offshore Banking-Swiss Tax Evasion Advisors Indicted
- FATCA-No Tax Relief for Americans Living Abroad
- Senator Rand Paul Challenges U.S. and Swiss Banking Treaty