FBAR international tax IRS after you?
IRS
Offshore Voluntary Disclosure Program Reopens
Lance Wallach Council Member President, VEBA Plan
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Abusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
Jan. 9, 2012 Today, the Internal Revenue Service reopened the offshore
voluntary disclosure program to help people hiding offshore accounts get
current with their taxes. Additionally, the IRS revealed the collection
of more than $4.4 billion so far from the two previous international programs.
The Offshore Voluntary Disclosure Program (OVDP) was reopened following
continued strong interest from taxpayers and tax practitioners after the
closure of the 2011 and 2009 programs. The third offshore program comes as the
IRS continues working on a wide range of international tax issues and follows
ongoing efforts with the Justice Department to pursue criminal prosecution of
international tax evasion. This program will remain open indefinitely
until otherwise announced. Lance Wallach and his associates have received
thousands of phone calls from concerned clients with questions about the prior
programs. Some of Lance’s associates are still very busy helping people with
the last program. Not a single person has been audited and most are pleased
with the results and are now able to sleep easily without worrying about the
IRS. According to Lance, it requires years of experience to obtain a good
result from the program. He suggests using a CPA-certified, ex-IRS agent with
lots of international tax experience. While this is not a requirement to file
under the program, Lance has heard many horror stories from people who have
tried to file by themselves or who have used inexperienced accountants.” Our
focus on offshore tax evasion continues to produce strong, substantial results
for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have
billions of dollars in hand from our previous efforts, and we have more people
wanting to come in and get right with the government. This new program makes
good sense for taxpayers still hiding assets overseas and for the nation’s tax
system.” The new program is similar to the 2011 program in many ways, but it
has a few key differences. Unlike last year, there is no set deadline for
people to apply. However, the terms of the program could change at any
time going forward. For example, the IRS may increase penalties in the
program for all or some taxpayers or defined classes of taxpayers – or decide
to end the program entirely at any point.” As we've said all along, people need
to come in and get right with us before we find you,” Shulman said. “We are
following more leads and the risk for people who do not come in continues to
increase. “The third offshore effort accompanies another announcement that
Shulman made today, that the IRS has collected $3.4 billion so far from people
who participated in the 2009 offshore program. That figure reflects
closures of about 95 percent of the cases from the 2009 program. On top of
that, the IRS has collected an additional $1 billion from up front payments
required under the 2011 program. That number will grow as the IRS
processes the 2011 cases. In all, the IRS has seen 33,000 voluntary disclosures
from the 2009 and 2011 offshore initiatives. Since the 2011 program closed last
September, hundreds of taxpayers have come forward to make voluntary
disclosures. Those who come in after the closing of the 2011 program will
be able to be treated under the provisions of the new OVDP program.
The overall
penalty structure for the new program is the same for 2011, except for
taxpayers in the highest penalty category.
The new
program’s penalty framework requires individuals to pay a penalty of 27.5
percent of the highest aggregate balance in foreign bank accounts/entities or
the value of foreign assets during the eight full tax years prior to the
disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will
be eligible for 5 or 12.5 percent penalties; these remain the same in the new
program as in 2011Participants must file all original and amended tax returns
and include payment for back-taxes and interest for up to eight years as well
as paying accuracy-related and/or delinquency penalties. The IRS recognizes
that its success in offshore enforcement and in the disclosure programs has
raised awareness related to tax filing obligations. This includes
awareness by dual citizens and others who may be delinquent in filing, but owe
no U.S. tax.
Lance
Wallach, National Society of Accountants Speaker of the Year and member of the
AICPA faculty of teaching professionals, is a frequent speaker on retirement
plans, abusive tax shelters, financial, international tax, and estate planning.
He writes about 412(i), 419, Section79, FBAR, and captive insurance plans.
He speaks at more than ten conventions annually, writes for over fifty
publications, is quoted regularly in the press and has been featured on
television and radio financial talk shows including NBC, National Public
Radio’s All Things Considered, and others. Lance has written numerous books
including Protecting Clients from Fraud, Incompetence and Scams published by
John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal
Estate and Gift Taxation, as well as the AICPA best-selling books, including
Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot
Spots. He does expert witness testimony and has never lost a case. Contact him
at 516.938.5007, wallachinc@gmail.com
or visit http://www.taxadvisorexpert.com.
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