Are You In Compliance With Your Foreign Reporting Obligations? If Not, Read On…Posted on August 9 2011 by admin
The IRS is offering a second voluntary disclosure opportunity for those with offshore accounts. Those who wish to comply with the disclosure must do so by August 31, 2011. The program requires taxpayers to bring all tax filings up to date for years 2003 – 2010 and report any previous unreported taxable income. Although the 2011 voluntary disclosure program has larger penalties than the first program that ended October 15, 2009, the offer is still more appealing than the alternative fines and possible criminal prosecution.
Penalties under this new initiative are only 25% of the highest aggregate value during the 2003 – 2010 program time period. Certain taxpayers may only be subject to 12.5% or 5% penalties. Participants in the program would also need to pay back taxes and interest as well as accuracy and/or delinquency penalties. Taxpayers who do not comply with the program and are later discovered by the IRS could be subject to a higher 50% penalty or even 75% fraud penalty as well as criminal prosecution.
With the IRS increasing investigations in the international area and more information becoming available through tax treaties, the risk of hiding offshore accounts is only getting riskier. This may be the last opportunity to come to the IRS before the IRS comes to you.
Jill A. Helm, CPA
There is nothing more complex than the world of taxes. We know this and yet we chose careers where we face these issues everyday. We get questions day in and day out about new tax laws, forms and news items and how they affect everyday people and businesses. Well, here at Henry & Horne, LLP we have set out to do what we do best; help everyday people understand what is going on in the world of state, local, federal, estate and international taxation. We will provide these weekly posts and we encourage you to give us feedback on those posts as well as letting us know what else you would like to know more about. Welcome to "Tax Insights." We hope you find this blog informative and worthy of your time.
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