New IRS Program for Offshore Tax Help
IRS Penalties Increasing
In a statement from the January 9th press release, IRS Chief Doug Schulman restated the Agencyâs intention, âAs weâve said all along, people need to come in and get right with us before we find you,â Shulman said. âWe are following more leads and the risk for people who do not come incontinues to increase.â
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However, with attempts to get everyone into compliance, there will still be those who donât 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 ortravel
- executives and workers in the US on temporary visas
- dual citizens
No Set Deadline to Pay IRS Debt
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.
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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.
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 programâs lack of clarity in getting taxpayers who have offshore dealings the IRS help they need.
Major news agencies are reporting the recent IRS announcement that it wasâreopeningâ 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.
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.