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STRATEGIC TAX LAWYERS:  TAX BLOG

Offshore Programs Produce Billions for the IRS

Monday, December 7, 2015
A new release from the IRS announces the latest efforts to combat offshore tax havens with new offshore compliance programs. These programs have generated the IRS approximately$8 billion.  Over 54,000 taxpayers are subject to paying taxes on income earned offshore.  For over 20 years, the IRS disclosure requirements force taxpayers to disclose their foreign assets, including investments, accounts, property, etc. The IRS is serious about non-compliant offshore bank accounts, so any taxpayers are urged to comply with all their tax obligations. More than half of the 54,000 taxpayers have complied with the IRS’ procedures.  The remaining 20,000 taxpayers participated after June 2014 when procedures were more lenient.

 

Due to taxpayers proactively providing information about offshore accounts to the IRS, the IRS conducted thousands of foreign audits which brought the federal government tens of millions of dollars. In addition, the IRS has followed up with criminal charges that equal billions of dollars in penalties.   The IRS has done all this during an IRS budget reduction.

 

For taxpayers that did not comply, there are two procedures for them to fix their noncompliance with the IRS. These programs are the Offshore Voluntary Disclosure Program (OVDP) and the Streamlined Filing Compliance Procedures.  A taxpayer will not face increased penalties if they disclose their foreign financial institution. The increased fee that taxpayers can face has increased the disclosing of foreign financial institutions by non-compliant taxpayers.  Also, taxpayers who are non-compliant can follow the delinquent FBAR procedure.

 

It is recommended that U.S. taxpayers with undisclosed foreign accounts need to assess their options carefully. The hope is that they will fully comply with the IRS and with their tax obligations. With all the global governing financial entities, it has become much more difficult to keep offshore accounts hidden from the IRS.  The IRS is searching for information from financial institutions around the globe in order to uncover non-compliant U.S. taxpayers. These taxpayers will face criminal prosecution by the federal court system.

 

If you were challenged by the IRS this year and need a good tax attorney, then we are here to assist you.  We are the Strategic Tax Lawyers and we are IRS tax attorneys and experts in the tax code. We have years of experience working with the IRS and negotiating deals for our clients. The Strategic Tax Lawyers, LLP are a firm of taxation attorneys, Intent to Levy attorneys, Fresh Start attorneys and experts in Offer in Compromise.  Call the Strategic Tax Lawyers at (800) 669-4775 for a free consultation to assist you with your tax-related matters.