Date: 01/29/12

Topic: Foreign Accounts

There’s good news and bad news for taxpayers hiding assets from the IRS in foreign accounts or for taxpayers that have previously undisclosed / reported for tax purposes, foreign income generating assets.

The good news: the penalties are less if a taxpayer “comes clean” with the IRS voluntarily, and the IRS just reopened its “Offshore Voluntary Disclosure Program” (OVDP).

http://www.irs.gov/Individuals/International-Taxpayers/Offshore-Voluntary-Disclosure-Program-Submission-Requirements

The IRS is affording the tax evader opportunity to repent. In the words of the IRS Commissioner, “People need to come in and get right with us before we [the IRS] find you,” because “we are following more leads and the risk for people who do not come in continues to increase.”

More good news: Our office can help. For more information on disclosing both foreign and domestic income tax evasion voluntarily thus avoiding the risk of criminal prosecution,

For International and DomesticTax Evasion see:

For purely Domestic Tax Evasion see:

The bad: The FBAR penalty of the previous 2011 Offshore Voluntary Disclosure Program has been raised from 25% to 27.5%. However, some tax evaders – those with less than $75,000 in offshore assets or inherited accounts that they have taken no action in regards to – may still qualify for the 2011 OVDI program’s penalty at a lower level, either 5% or 12.5%. The current program has no scheduled end date but the penalties are expected to continue to increase over time. Don’t delay – contact our office today!

The number one reason why a tax evader would want to “come clean” through this program is because if the IRS finds a taxpayer before her or she comes forward voluntarily, he or she will surely be in a world of hurt, facing draconian penalties often in a multiple of the value of the offshore asset and the very real possibility of criminal prosecution.