The IRS is encouraging taxpayers who have not filed tax returns, not reported all of their income on their tax returns and/or have taken frivolous tax deductions to participate in this Limited Time Voluntary Disclosure Program. You must initiate participation in the Voluntary Disclosure Program before the IRS finds you. Voluntary disclosure will allow you to avoid criminal prosecution and the assessment of significant IRS penalties. Call us 877-829-3535 for your free consultation. Deadline Notice: Foreign account holders, non-filers and other non-complying taxpayers have only until September 23, 2009, to participate in the Voluntary Disclosure Program. IRS partial amnesty to end 23 September 2009! IRS NEWS UPDATE: WASHINGTON ─ The Internal Revenue Service today announced a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. These taxpayers now have until Oct. 15, 2009. Under special provisions issued in March, taxpayers with these hidden accounts originally had until Sept. 23, 2009 to come forward. Those taxpayers who do not voluntarily disclose their hidden accounts by the new deadline face much harsher civil penalties, where applicable, and possible criminal prosecution. IRS officials decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. By extending the deadline for a short period of time, the IRS is providing relief for those taxpayers who had intended to come forward prior to the deadline, but faced logistical and administrative challenges in meeting it. The extension will allow tax preparers and attorneys the necessary time to interview and advise their backlog of taxpayers with these hidden accounts, and prepare the necessary paperwork to qualify for the special penalty provisions. The IRS is encouraging taxpayers who have not filed tax returns, not reported all of their income on their tax returns and/or have taken frivolous tax deductions to participate in this Limited Time Voluntary Disclosure Program. You must initiate participation in the Voluntary Disclosure Program before the IRS finds you. Voluntary disclosure will allow you to avoid criminal prosecution and the assessment of significant IRS penalties. The IRS also announced that there will be no further extensions. Call us now at (877) 829-3737 while you still have time to meet this extended deadline. Refer to IRS Amnesty Program Details If you go to Google and enter “FBAR September 23”, you will be amazed at the Internet “buzz” concerning the September 23 extended deadline for filing your mandatory FBAR report of foreign bank accounts (of which many people seem still unaware). As we have reminded visitors to our website, not only are all “U.S persons” (citizens and resident aliens) required to report their U.S.-sourced income to the IRS, but foreign-earned income also must be reported. In addition, whether you live in the United States or abroad, you are required annually to report non-U.S. bank and financial accounts to the United States Treasury. September 23 marks the end of an “amnesty” period for both types of reporting, and should not be ignored… FBAR: Form TD F 90-22.1 must be filed by 30 June each year if you had any financial interest in, or signature or other authority over, a bank, securities, or other financial account in a foreign country and if the aggregate for all accounts was the foreign currency equivalent of $10,000 or more on any one day in the year. This means not only your own accounts but a spouse’s accounts on which you have signing privileges (or a joint account, even with a foreign spouse), your club’s accounts if you can sign checks… This bank account information must be received by June 30 whether you file an income tax return or not and regardless of any extension you may have requested. The form must be filed with the Department of the Treasury and must not be attached to a tax return. It can be downloaded at Form TD F 90-22.1 In October 2008, the form was modified to require the address and maximum value during the year of each account (translated into USD). On 24 June 2009, the IRS announced an extension of the filing deadline to 23 September 2009 for those individuals who meet the following two criteria: (1) they recently became aware of their requirement to file the form, and (2) their 2008 US tax return, when filed, correctly declares all their taxable income. Any form filed after 30 June 2009 is considered delinquent. Therefore, you must attach a statement explaining why the form is filed late (for example, “I recently became aware that I had to file the form”). The form and statement must be taken to the nearest IRS office or mailed to U.S. Department of the Treasury, P.O. Box 32621, Detroit, MI 48232-0621. Additionally, a copy of the delinquent form and your 2008 tax return must be sent to: Internal Revenue Service, 11501 Roosevelt Blvd, South Bldg. Room 2002, Philadelphia, PA 19154 Attn: Charlie Judge, Offshore Unit DP S-611. If your tax return is due after 23 September 2009 (you filed IRS Form 4868), you need not include a copy of your 2008 tax return. The international firm of Nixon Peabody LLP has this posted on the Internet: The IRS has stated that U.S. persons who failed to file FBARs for any of the prior six years (2003 to 2008), but reported and paid tax on all taxable income, should file FBARs for such years by September 23, 2009, with an attachment providing the reason why the FBARs were not filed on time, together with copies of their tax returns. In such cases, the IRS has advised that no penalties will be imposed for the late filing of FBARs. Note that the mailing address for submitting the amnesty is different from the mailing address for filing the regular FBAR return. Many U.S. investors only recently became aware of the need to make FBAR filings. As a result of this amnesty provision, taxpayers should consider whether they had FBAR obligations for prior years. If they do, they should try to take advantage of the amnesty and file for such prior years in a timely manner. This amnesty is not unconditional. The taxpayer must (i) explain the reason for the late filing, (ii) have reported and paid all taxable income for each applicable year, and (iii) attach copies of tax returns for each applicable year. The rationale that the U.S. investor was not aware of the filing obligation in the particular circumstances should result in qualifying for the amnesty. This should be the case despite the official IRS position that the guidelines for FBAR filing are broad and have not changed for many years. “VOLUNTARY DISCLOSURE” of unreported income – Partial amnesty: The pushed-back September 23 deadline also applies taxpayers who have neglected to file tax returns or have incorrectly reported their taxable income. These people (you might even know some!) are encouraged by the IRS to participate in its Voluntary Disclosure Program, open only to those who do, indeed, come forward voluntarily, before being identified by (or to) the IRS. Fines will be imposed but criminal charges will (in most cases) not be pressed. A recent article in the Wall Street Journal said this: Wealthy taxpayers have inundated the IRS in recent weeks with requests to come clean for past tax evasion, amid a government crackdown on undeclared income from overseas accounts. The volume has been so great that (…) the IRS issued a streamlined three-page form for taxpayers seeking entry into its temporary voluntary-disclosure program. “Last week we had 400 [applicants] – four times as many as in all of last year,” said IRS spokesman Frank Keith, who declined to provide more detailed figures. Two main factors appear to be driving the clemency-seeking spree. The IRS disclosure program, which began in March and is set to end Sept. 23, offers Americans the possibility that they may face civil charges, which can carry lower penalties than criminal charges, for volunteering details of tax evasion. At the same time, the IRS and the U.S. Justice Department are pressing ahead with efforts to investigate taxpayers who failed to report income earned from undeclared accounts with Swiss bank UBS. (See the whole article here Wealthy Tax Payers Hit the IRS) Concerning this looming September 23 deadline, the New York firm of Andreozzi Fickess LLP has this to say: The IRS voluntary disclosure initiative provides a window of opportunity for U.S. Taxpayers who have not complied with foreign bank account reporting requirements and who have not paid taxes on their foreign income. The program does not guarantee that criminal charges will not be brought, but a properly made voluntary disclosure greatly reduces the likelihood of criminal liability. The program further offers Taxpayers an opportunity to significantly reduce civil liabilities by avoiding or reducing the foreign bank and financial account balance nondisclosure penalty provisions and other provisions pertaining to various information returns. We cannot stress enough the fact that compliance has become very important. IRS Commissioner Schulman has described the voluntary compliance initiative as “a last chance for people to come clean on their own” and stated that “those who truly come in voluntarily will pay back taxes, interest and a significant penalty, but can avoid criminal prosecution.” We urge readers to consult a U.S. tax professional quickly or call the IRS Hotline (+1(800) (800) 2877, option 2 for FBAR questions; +1215-516-4777 for “voluntary disclosure” questions) to determine the type of reporting required (and if it is required of you) and how to comply in a timely manner, so as to avoid penalties. For answers to some of your questions, see a recently revised IRS FAQ sheet at: IRS Voluntary Disclosures and AnswersYou Have a Right to Tax Representation
IRS Partial AmnestyAndy
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