Think you don’t need to report that offshore account to the IRS? Think again. A recent article in Forbes reports that the Internal Revenue Service (IRS) is hardly done with searching for unreported offshore accounts.
“As we continue to receive more information on foreign accounts,” IRS Commissioner John Koskinen told Forbes, “people’s ability to avoid detection becomes harder and harder.”
What options are available to report foreign accounts?
Two options available for those who need to report foreign accounts include the Offshore Voluntary Disclosure Program (OVDP) and the streamlined program.
The IRS defines streamlined filing compliance procedures as an option to come into compliance that is particularly useful for those whose failure to report these accounts was not willful.
A second option, the OVDP program, is available for those who cannot certify that the failure to disclose was not willful. This program implements uniform penalty structures that are used for taxpayers who voluntarily report undisclosed foreign accounts. It is designed to help taxpayers avoid prosecution for failing to disclose this information as well as limit the exposure to civil penalties.
How effective are these programs?
The IRS has confirmed that it has collected $9.9 billion as a result of the Offshore Voluntary Disclosure Program and an additional $450 million from the streamlined program.
What should I do if I need to report foreign assets or accounts?
Those who have yet to report these accounts are wise to take steps to come into compliance. Many options, including those listed above, are available. Contact an experienced tax lawyer to discuss your options for compliance.