by Linda Beale
Offshored Assets still in IRS cross-hairs but new disclosure program available
As most who follow the issues are aware, the IRS has been focusing for some time on the foreign bank accounts of US taxpayers. The big break came when the IRS was able to get some data from UBS, including information about particular bankers and mechanisms that US taxpayers were using to sequester significant amounts abroad to avoid paying US taxes on the income. This has allowed the IRS to pursue leads and draw connections from bankers to accounts to taxpayers, and to pursue criminal prosecutions for international tax evasion in some cases.
There have been two “voluntary programs” for declaring offshore accounts and avoiding potential criminal prosecution with the payment of a set penalty–the first in 2009 and the second in 2011. The penalty in the second program was stiffer than the penalty in the first program, so that those who delayed had to pony up more to get clear. The programs have been enormously successful, bringing in more than $4.4 billion dollars, according to an IRS release announcing a reopening of the offshore voluntary disclosure program. See IR-2012-5.
Under the new program, some taxpayers may be eligible for the 5 or 12.5% penalties but the stiffest penalty will be higher than under earlier versions: 27.5% of the highest aggregate balance in foreign bank accounts during the 8 years prior to disclosure, up from 25% in the 2011 program. In addition, of course, participants have to file returns and pay back taxes and interest for the preceding 8 years, and pay any accuracy-related penalties due.
originally published at ataxingmatter