Wednesday, February 09, 2011 2011 Offshore Voluntary Disclosure Initiative
As we predicted in our seminars, the IRS has announced (IR-2011-14) a second voluntary disclosure initiative designed to bring offshore money back into the U.S. tax system. The previous initiative resulted in 15,000 voluntary disclosures and since it ended over 3,000 more taxpayers have become compliant. Commissioner Douglas Shulman has stated that "Combating international tax evasion is a top priority for the IRS."
The new initiative will end on August 31, 2011. To participate the taxpayer must file all original and amended returns and include payment of taxes, interest and accuracy-related penalties by that date. The years covered by this initiative are the calendar years 2003 through 2010. (It should be noted that the previous voluntary disclosure program covered six years while this program covers eight years).
The penalty for those participating in this initiative is 25% of the amount in the foreign account with the highest aggregate balance covering the eight year tax period. (The penalty under the previous program was 20%.) However, a 12.5% penalty rate will apply if the offshore accounts do not exceed $75,000 in any of the eight years covered.
As in the previous voluntary disclosure program, taxpayers who do not come forward face higher penalties and the posssibility of criminal prosecution.
It should be further noted that taxpayers who have used so-called "silent disclosure" can qualify for this new initiative.
The IRS is going to launch a new section on its website (www.irs.gov) dedicated to information related to the new voluntary disclosure program, to help taxpayers and tax professionals.
Should you need any assistance with voluntary disclosure do not hesitate to call upon us.
Bob Katz |