Client Alert:
IRS offers voluntary
disclosure for
offshore accounts
The Internal Revenue
Service has announced
new voluntary disclosure
terms for U.S. taxpayers
with undisclosed
foreign bank accounts.
Though the compromise
measures announced
by the IRS still
require six years
of back taxes plus
interest and penalty,
they present the “lesser
of two evils” should
taxpayers continue
to maintain these
accounts and not
report them.
The voluntary disclosure
terms, valid for
six months beginning
March 26, 2009, require
the payment of:
- Income taxes
on income generated
from the newly
disclosed assets
for the last six
years;
- Interest due
on these income
taxes for the last
six years;
- A 20% or 25%
penalty on the
unreported income
for each period
in question; and
- 20% penalty on
the total balance
of all of the taxpayer’s
foreign bank accounts
or assets during
the year among
the past six in
which the accounts
had the highest
aggregate value.
Those with offshore
accounts who choose
not to voluntary
disclose at this
time face the possibility
of future criminal
charges and the seizure
of accounts.
For additional information
on this issue, please
contact your Anchin
relationship partner
or Clarence Kehoe,
partner-in-charge
of Anchin’s
Tax Department. |
