The Taxman Cometh after 9/23
The amnesty period set by the IRS for you to declare any taxes you owe, especially unpaid taxes on offshore assets is fast coming to an end. On September 23rd, the Voluntary Disclosure program of the IRS draws to a close and there will be no extensions to the deadline. That leaves you just 3 weeks to make voluntary disclosure and make settlement or risk being charged interests and penalties or even face criminal prosecution if the IRS has a case against you.
Penalties at present are up to 50% of the amount in your offshore account for each year the taxes were not filed for the money in those accounts. In addition, you will also be taxed on the interest your money earns in the offshore accounts plus be charged interest on the tax. In addition, you may be slapped a penalty for fraud of up to 75% of the unpaid tax amount and a penalty of $100,000 or 50% of each account balance for not filing Form TD F 90-22.1, Report on Foreign Bank and Financial Accounts (FBAR), whichever is higher. All this does not exclude criminal charges for intentional non-disclosure of foreign accounts.
On the other hand, if you accept the IRS' offer to disclose your offshore assets, you will face a potentially smaller penalty of taxes on the undisclosed foreign accounts for up to 6 years or the length of time the account has been in force if less than 6 years. In addition, you pay the interest on the tax and an accuracy-related 20% of the unpaid taxes for each tax year. You also have to pay a penalty of 20% of the highest amount in one day in your offshore accounts over the 6 years. Under special circumstances, this may even be reduced to 5%. And you will not face criminal charges. This is certainly a better proposition than having to pay all those fines and face possible criminal charges if the IRS finds out about your offshore accounts from a third party.
With the recent settlement between the IRS and UBS bank of Switzerland in which the bank has agreed to reveal details of 4,450 of its American depositors who the IRS suspects of evading taxes, there is an increased awareness of the intensity with which the IRS is pursuing offshore account holders to pay up any undeclared taxes. But the initiative to recover these taxes is not limited to UBS depositors only. The IRS has means to trace account holders of other foreign banks not only in Switzerland but also in the Caribbean, Hong Kong, Panama and other popular tax havens.
So it is to your best interest to voluntarily disclose your foreign assets for tax evaluation. Seek advice from a qualified tax lawyer who can help you resolve this issue to the best of your interest. Visit http://getirshelp.com for more information.
Darrin T. Mish is a veteran, nationally recognized tax attorney who has focused on providing IRS help to taxpayers for over a decade. He regularly travels the country training other attorneys, CPAs and enrolled agents on how to handle their toughest cases with the IRS. He is highly ranked among the top attorneys in the country, with an AV rating from Martindale-Hubbell and a perfect 10 on Avvo.com. Martindale-Hubbell has also honored him with a listing in their Bar Register of Preeminent Lawyers. He is a member of the American Society of IRS Problem Solvers and the Tax Freedom Institute. With clients on every continent but Antarctica, he has what it takes to solve your IRS problems no matter where you live in the world. If you would like more information about his practice and how he can help you, please call his office at (813) 229-7100 or toll free at 1-888-GET-MISH.
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