August 04, 2009
/24-7PressRelease/ --
IRS Amnesty Program for Unreported Offshore Bank Accounts
Article provided by Law Offices of Mark L. Horwitz, P.A.
Visit us at
www.mlhorwitzlaw.com
IRS Ups Efforts to Obtain Offshore Account Information
Over the last year, the IRS has been placing increased pressure on foreign banks to give up the names of American taxpayers who keep unreported offshore bank accounts in their institutions. The IRS has uncovered various fraudulent schemes committed by certain foreign banks to help US taxpayers hide their assets from the IRS. Several well-known banks already have cut deferred prosecution deals with the IRS, including Lloyds TSB Bank and UBS AG Bank.
While these banks currently only are providing the names of individuals involved in the fraudulent schemes, many believe it will not be long before the IRS demands and receives the names of any US taxpayers who are keeping assets in offshore accounts.
Putting money in offshore bank accounts alone is not illegal. Failing to make the necessary disclosures to the IRS and include any interest earned on the accounts on income tax returns, however, is illegal. Taxpayers found in violation of US laws regarding offshore accounts may be prosecuted federally for tax evasion, among other criminal tax offenses. Those convicted of tax evasion may be required to spend time in a federal prison as well as pay fines, penalties and interest on any unpaid taxes.
Amnesty Available for a Limited Time to Taxpayers
In an effort to encourage Americans to voluntary disclose information they have illegally withheld about these accounts, the IRS created an amnesty program. Under the amnesty program, any taxpayer who successfully completes the requirements will not be criminally prosecuted for their acts.
The program currently is only available until September 23, 2009.
The key, however, is that the program must be completed successfully. This means the taxpayer must be willing to cooperate 100% with the IRS and make full, voluntary disclosures of all information requested by the federal government agency. In order to complete the program successfully, the following steps must be taken:
-The taxpayer must calculate all of the taxes and interest due for the last six years, or if the offshore account is not six years old, for the amount of time the account has been in existence
-The taxpayer must then file returns and/or amend past tax returns for this entire period, including filing the necessary Report of Foreign Bank and Financial Accounts (Form TD F 90-22.1) for each year
-The taxpayer also must determine whether there are any penalties owed for the relevant time period, including any accuracy or delinquency penalties.
-In lieu of all other penalties that could apply, the taxpayer must calculate a penalty equal to 20% of the amount in the offshore account in the year with the highest aggregate account/asset value.
It is imperative that taxpayers considering the amnesty program understand that they may be
audited by the IRS to determine if they owe any other money to the government and they still will be responsible for paying any
penalties for failing to report income as well as accrued
interest on any amount owed to the IRS even if they are granted amnesty from criminal charges.
Working with an Experienced Criminal Tax Attorney
Taxpayers should not attempt to enter the amnesty program without first seeking the advice of an attorney experienced in handling criminal tax matters. The key to receiving amnesty from criminal prosecution under the program is providing complete, accurate and honest information to the IRS. Any oversight or failure to provide all of the required information could result not only in losing amnesty, but also in additional criminal charges for crimes such as providing false statements on a tax return and/or tax evasion due to omitted income or false deductions, for example.
A criminal tax attorney can be invaluable for taxpayers considering the amnesty program and can help them by:
-Reviewing each person's case to give specific advice on the best course of action to take in light of their particular tax situation
-Explaining the advantages and disadvantages of the amnesty program as well as the potential outcomes upon completing the program
-Working directly with the IRS and handling all communications with the agency concerning the taxpayer's amnesty application and other tax matters
-Helping the taxpayer fill out the paperwork correctly and completely to minimize the possibility of additional federal charges
-Helping the taxpayer with any other tax issues, including preparing for an audit, paying penalties or any other consequences from the amnesty program
Additionally, taxpayers working with an attorney to handle their amnesty program applications also have the added benefit of receiving the protection of attorney-client privilege for all of their communications with the attorney. In criminal tax matters, individuals do not receive a similar privilege for the communications they have with their accountants -- meaning anything said to the accountant is not confidential and the IRS can require the accountant to reveal any and all information shared. The privilege, however, does attach if the attorney hires an accountant to help with a taxpayer's case.
Conclusion
The IRS's current focus on Americans hiding assets in off-shore accounts is not likely to abate any time soon. If you have one of these accounts and are concerned about the possibility of charges being brought against you, it is imperative that you seek the advice of an attorney knowledgeable in criminal tax matters to protect your interest and help minimize the consequences you may face.
Article provided by Law Offices of Mark L. Horwitz, P.A.
Visit us at
www.mlhorwitzlaw.com---
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