Major news agencies are reporting the recent IRS announcement that it was “reopening” the offshore voluntary disclosure program to encourage taxpayers to disclose their offshore accounts and becoming current with their IRS tax debt. An article written in Forbes, IRS Offers Taxpayers One More Chance, shined some light on the most likely motives for this latest IRS amnesty: money.
In a statement from the January 9th press release, IRS Chief Doug Schulman restated the Agency’s intention, “As we’ve said all along, people need to come in and get right with us before we find you,” Shulman said. “We are following more leads and the risk for people who do not come in continues to increase.”
Under the previous two voluntary disclosure programs; one in 2009 and the most recent in 2011, the IRS has reported collecting taxes in upwards of $4.4 billion. This figure is expected to climb as the IRS continues to processes the 2011 disclosures, including those which were extended due to natural disasters such as Hurricane Irene.
However, with attempts to get everyone into compliance, there will still be those who don’t know they have IRS tax problems and are inadvertently breaking the law. The following are examples of these unwitting IRS targets:
- taxpayers who have modest foreign accounts for things like paying tuition for study abroad programs, internships or travel
- executives and workers in the US on temporary visas
- dual citizens
No Set Deadline to Pay IRS Debt
With this program, the IRS touts the idea that there is no set deadline for people to apply. This fact concerns many tax professionals who are frustrated by the new program’s lack of clarity in getting taxpayers who have offshore dealings the IRS help they need.
IRS Penalties Increasing
Taxpayers who participate in this program will now pay a penalty of 27.5% (up from 25% the 2011 offered) of the highest aggregate balance in foreign bank accounts or value of foreign assets during the eight full tax years prior to the disclosure. As in 2011, if circumstances warrant, some taxpayers will be eligible for penalties of just 5% or 12.5%. To qualify for the program, participants must file all original and amended tax returns for up to 8 years prior to the disclosure. Payment must also be made for the taxes and interest due as well as applicable penalties.
Get IRS Help Now-Offer Expire Soon
If have undeclared funds in offshore bank accounts, the time is now to report them. Contact a certified tax resolution specialist or tax attorney expert in resolving foreign tax debt. Being proactive about disclosing your foreign funds can help reduce your chances of criminal prosecution, minimize severe IRS penalties and work out a structured offshore tax settlement.
More Tax Help, IRS News and Tax Relief Tips:
- IRS Help for Americans with Foreign Income
- IRS Holds Taxpayers Responsible – No Matter What
- Ask the Certified Tax Specialist – Small Business Back Taxes
- Got Back Taxes? Passport and Retirement at Risk
- IRS Bankruptcy-Five Tax Relief Options for Back Taxes
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