MILWAUKEE, WI, January 12, 2012 /24-7PressRelease/
-- IRS Commissioner Doug Shulman announced another amnesty program for U.S. taxpayers with unreported offshore and foreign bank accounts. Previous amnesty programs in 2009 and 2011 brought in approximately 30,000 taxpayers yet estimates reveal that as many as 500,000 or more taxpayers are still not in compliance with the reporting rules.
Tax attorney Brian Mahany said the amnesty program offers another opportunity for people with unreported foreign income or accounts to avoid jail and high penalties. "The IRS has been relentless in recent months about finding people who failed to report their overseas bank accounts. Most of these people are simply ignorant of the law," said Mahany.
Many foreign born Americans, dual nationals and Americans living overseas do not know they must file annual FBAR forms. (An FBAR is a Report of Foreign Bank and Financial Account and must be filed every June.) "Only a small percentage of unreported foreign accounts involve businessmen with secret Swiss accounts," said Mahany. "More often these accounts belong to Chinese, Canadian, Indian or Mexican Americans simply sending money back 'home' to family," he added.
Penalties for not following the law can be as high as 50% of the highest account balance for each year of noncompliance and can involve prison if the violation was willful. Amnesty participants generally avoid criminal prosecution and can usually get a substantial reduction of civil penalties.
This year's program is called the Offshore Voluntary Disclosure Program or OVDP.
Mahany & Ertl is a Wisconsin-based law firm concentrating in offshore tax matters. Brian Mahany is Maine's former state revenue commissioner and a former assistant attorney general tax. Please call partner Brian Mahany at 414-704-6731 for more information.