IRS Announces Major Changes to its Amnesty Program: Last Chance For U.S. Taxpayers to Voluntarily Declare Undisclosed Overseas AccountsOffshore Account Update, Press Releases
Posted in on June 20, 2014
Kevin E. Thorn, Managing Partner of Thorn Law Group, discusses the new 2014 IRS Amnesty Program and the impact that the new requirements may have on U.S. taxpayers who have undisclosed overseas accounts.
Washington, DC (PRWEB) June 20, 2014 - On June 18, 2014, the IRS revealed their new 2014 Amnesty Program, meant to encourage more United States taxpayers with undisclosed overseas accounts to come into compliance. The changes to the 2012 program include expansion of the streamlined filing procedures, changes to the disclosure submission requirements, and an increased penalty for taxpayers with accounts at certain banks. [IRS Press Release announcing Changes to Offshore Program, June 18, 2014, at http://1.usa.gov/1nnMikk.]
One big change is the IRS’s agreement to consider whether a taxpayer’s failure to disclose offshore accounts and financial assets was willful. Under the expanded streamline procedures, U.S. taxpayers, even those residing in the U.S., may qualify for a significantly reduced penalty if they can substantiate that their failure to disclose the foreign accounts was non-willful. Prior to June 18, 2014 only certain U.S. taxpayers living abroad qualified for relief.
Kevin E. Thorn of Thorn Law Group observes that this relief will likely help many U.S. taxpayers who may have been afraid of the potentially large penalties to finally come forward and come into compliance. Thorn cautions, however, that U.S. taxpayers with undisclosed accounts should consult with an experienced tax attorney before deciding to forego the standard OVDP and enter the streamlined program instead. Says Thorn, “Account holders should consult with an attorney to assess their case and to explain the risks if the IRS disagrees with their position. If the IRS disallows a taxpayer’s claim of non-willfulness, the consequences could be severe.”
The IRS’s Offshore Voluntary Disclosure Program (OVDP) has also been changed to increase the penalty for some account holders. For U.S. taxpayers with undisclosed foreign accounts at banks identified publicly as being under criminal investigation by the IRS, the penalty is 50% of the account’s high balance if the taxpayer does not at least seek pre-clearance into the OVDP before the investigation of the bank is announced. Thorn notes that this ups the ante for taxpayers.
Kevin Thorn encourages U.S. accountholders who still have undisclosed bank accounts to come forward as soon as possible. Thorn believes the IRS and Department of Justice are pursuing numerous banks and financial institutions all over the world and cautions that “the only way to protect yourself and your assets is to make a voluntary disclosure and come into compliance.” Adds Thorn, “DOJ is likely receiving information from foreign banks and financial professionals that will allow the U.S. government to identify and prosecute American taxpayers who have not been reporting their overseas accounts.” In some cases, Thorn believes the information will allow the DOJ to prosecute the offshore banks and bankers, not just the account holders. Thorn emphasizes that the DOJ is not afraid to criminally investigate and prosecute banks, and points to the Credit Suisse plea agreement as the latest example. [U.S. Department of Justice Press Release Announcing Credit Suisse Guilty Plea, May 19, 2014, at http://1.usa.gov/1ofyUjR.]
Kevin E. Thorn, recommends that U.S. taxpayers with undisclosed overseas accounts consult an experienced attorney to assess their options for coming into compliance. Observes Thorn, “It is no longer a matter of if the IRS will find your offshore account, but when they will.” Adds Thorn, “Foreign banks are making voluntary disclosures to avoid prosecution and severe penalties, and so should U.S. taxpayers with undisclosed foreign bank accounts. Once the DOJ and the IRS obtain the identities of U.S. taxpayers with undeclared foreign accounts in these overseas banks, they will not allow the account holders to enter into the IRS's OVDP.”
Mr. Thorn has also observed that many overseas banks are sending letters to U.S. taxpayers with undisclosed foreign accounts informing them of the bank’s decision to participate in the OVDP and suggesting that they do the same, Thorn states that, “If your bank sends you a letter advising you to enter the IRS’s Offshore Voluntary Disclosure program, consider it a warning that they are going to turn your undisclosed foreign account information over to the DOJ and IRS very soon.” Thorn recommends that U.S. taxpayers with undisclosed overseas accounts contact an experienced tax attorney as soon as possible in order to discuss their options and rights.
For additional information on the news that is the subject of this release, contact Kevin E. Thorn, Managing Partner of Thorn Law Group at 202-270-7273 or visit us at http://www.thorntaxlaw.com/.
About Thorn Law Group, PLLC: Thorn Law Group, PLLC is a law firm dedicated to helping clients resolve complicated tax, criminal tax, and international tax problems.
Kevin E. Thorn
Managing Partner Thorn Law Group, PLLC