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MILWAUKEE, WI, April 19, 2011 /24-7PressRelease/ -- April 15th has come and gone but the IRS estimates there are hundreds of thousands of Americans with unreported foreign bank accounts. Penalties for not reporting an account in a foreign country include prison and loss of 50% of the highest balance in the account.
In 2009, the IRS offered an amnesty program for those with unreported foreign bank accounts. Only 15,000 people came forward. This year, the IRS says that the 2011 program - called the Offshore Voluntary Disclosure Initiative - is the last chance to avoid possible prosecution and huge penalties.
Opening an account in a foreign country is not illegal. Not reporting the income from that account or simply not disclosing the account can be a felony.
Many foreign born residents simply think they are sending money "home." They forget that the IRS considers their home bank account to be a foreign one.
The IRS is ramping up its investigation of offshore banks. Swiss banks have long been a target but this year the government has indicted two U.S. residents with accounts in India.
Former state revenue commissioner and tax prosecutor Brian Mahany says, "The world is getting much smaller. The risk of getting caught with an unreported offshore account is at an all time high. Those that choose to play the 'audit lottery' this year will probably lose."
Residents have until August 31st to participate in the amnesty but thee is a catch. All reports, amended returns, payments and paperwork must be complete by that date. Mahany urges people who plan to participate to not wait until the last minute.
Mahany & Ertl is a boutique law firm concentrating in Tax Resolution, Fraud Recovery and White Collar Criminal Defense. We represent businesses and individuals throughout the United States. For further information, please call us at (414) 704-6731 or go online to www.mahanyertl.com.
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