IRS RENEWS AMNESTY
The Internal Revenue Service announced the renewal of its amnesty program for taxpayers with foreign bank accounts, foreign business entities, rental properties, and assets held in trusts who have previously failed to properly report those foreign assets on tax returns and on a Foreign Bank Account Report (aka FBAR). It is a renewal of the Offshore Voluntary Disclosure Program of 2009, but with refined application procedures and penalty structures.
The amnesty program for 2011 is called the Offshore Voluntary Disclosure Initiative ("OVDI"). The initiative is designed to bring previously unreported offshore assets back into the U.S. tax reporting system. It accomplishes that goal by requiring people with previously undisclosed income from offshore accounts (some purposely hidden, others unknowingly unreported) get current with their reporting. The Service terms this as "compliance."
The new voluntary disclosure initiative is available now through August 31, 2011. As IRS Commissioner Doug Shulman has recently stated, "[t]his new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all. And it gives people a chance to come in before we find them." "As I've said all along, the goal is to get people back into the U.S. tax system," Shulman said. "Combating international tax evasion is a top priority for the IRS. We have additional cases and banks under review. The situation will just get worse in the months ahead for those hiding assets and income offshore. This new disclosure initiative is the last, best chance for people to get back into the system."
The new initiative includes several changes from the 2009 Offshore Voluntary Disclosure Program (OVDP). The overall penalty structure for 2011 is higher, meaning that people who did not come in through the 2009 voluntary disclosure program will not be rewarded for waiting. However, the 2011 initiative does add a tiered penalty framework for some taxpayers with lower foreign asset valuations. The penalties depend on the facts and circumstances of taxpayer's particular case.
If you have offshore assets (including rental properties and business entities) with values in excess of $10,000, and you failed to report those assets on tax returns or other required informational returns, YOU NEED TO SPEAK TO A TAX ATTORNEY NOW! We can assist in the negotiations needed to resolve your IRS problems in a reasonable manner.
Please call Stephen McFarlane at (480) 998.0999 ext. 101.
