In the last few months, the IRS has dramatically increased the pressure on U.S. taxpayers with unreported foreign accounts. Its lawsuit against Swiss banking giant UBS demanding that the bank identify more than 52,000 U.S. persons alleged to have accounts there has received the greatest attention.
The IRS has also ramped up other enforcement tools to identify taxpayers using offshore accounts and entities to avoid tax. The most important of these are a series of “John Doe” summonses seeking credit card records of U.S. merchants alleged to be hiding money in offshore bank accounts.
But on April 20, 2009, the IRS announced an initiative that offers taxpayers who make a full disclosure regarding unreported funds offshore a reduction in possible penalties. The offer is effective for six months and ends Oct. 20.
Some commentators—including Bob Bauman, legal counsel to The Sovereign Society—have justifiably criticized the initiative. The problem is that the IRS is under no obligation to grant the reduced penalties to a taxpayer who comes forward. It can still pursue criminal charges and penalties if it wishes.
However, yesterday, the IRS posted a series of questions and answers on its Web site that answered a crucial question for taxpayers who reported all the income from their offshore accounts, but never filed Form TD F 90-22.1, the "foreign bank account reporting" form.
If you're in this situation, the IRS now says you can file the delinquent forms, and the IRS will not impose a penalty. To learn more, follow this link: http://www.irs.gov/pub/irs-news/faqs.pdf and see the answer to question 9.
On the other hand, if you have unreported offshore income, don't contact the IRS yourself. Contact a lawyer who specializes in criminal tax defense first. Your lawyer, not you, should approach the IRS.
source: nestmannblog.sovereignsociety.com
