You must have heard about the FBAR reporting last year. Sanjiv has talked about it on radio and TV. We have discussed it on our blog and reminded customers in our office. Last year, Govt. started a volunteer disclosure program that reduces the penalties for those who have not disclosed their foreign income and assets.
But some of you may have missed the deadline simply thinking if you should disclose your assets or not. By now, you may have figured out that disclosures are not going away. IRS is really after those who are not disclosing their foreign income. The government is using all the tools, Financial Penalties and Criminal Charges, they got to deal with this issue. It is our recommendation to take this issue very seriously and properly report all worldwide income and assets.
If you missed the last year's relief program than you are not out of luck. You can take advantage of it this year. IRS Commissioner Douglas H. Shulman announced on February 8, 2011, that the Internal Revenue Service has begun a second offshore voluntary compliance initiative (“OVCI”).
Program is similar to the 2009 program whereby the IRS is offering taxpayers the opportunity to fully disclose all unreported offshore accounts in exchange for reduced penalties. Our office can help you file the proper returns and statements to bring you in compliance and help you reduce the penalties.
Disclosing your information will require you to amend your federal and state income tax returns from 2003 forward and will be required to pay interest and penalties. I know its lots of work but that is what we are here for. Our office will work with you to make it as easy as possible.
Also, please note that IRS will also charge you the interest. The interest is calculated at IRs published rates, and penalties are assessed at a rate of up to 25% of the highest balance in the account during that time period.
The initiative is open to individuals and entities, such as corporations, trusts, and partnerships. Individuals currently under examination or under criminal investigation cannot participate.
Now, you have another chance to come out clean with the IRS and put this headache to rest.