Too Many Taxpayers Not Benefitting from Streamlined Amnesty
Posted in News, Offshore Account Update on August 19, 2014 | Share
Offshore voluntary disclosure programs (OVDP) make it possible to report offshore accounts to the Internal Revenue Service that you should have reported on in the past and didn’t. OVDP allows you to alert the IRS that you did not file the required Report of Foreign Bank and Financial Accounts (FBAR) that you must file each year. Streamlined OVDP procedures limit the penalties that you face for a failure to file the required forms, and also provide amnesty so you will not have to worry about criminal prosecution.
Unfortunately, many people who want to participate in streamlined OVDP procedures are not permitted to do so. In fact, some people who are seeking amnesty through streamlined programs end up unable to participate in OVDP at all. This can result in very large financial penalties and even the potential risk of criminal prosecution. To reduce the risk that you will be prevented from getting amnesty, it is important to speak with a Washington D.C. IRS voluntary disclosure lawyer as soon as possible for help taking advantage of streamlined IRS amnesty programs.
Streamlined Amnesty Limited for OVDP
To be eligible for the streamlined OVDP procedure, there are very specific requirements that a taxpayer must meet. These include the following:
- Non-residency requirements. You must not have a U.S. residence and you must have been out of the country for at least 330 days in the year when you did not file FBARs.
- You must not have reported income and paid taxes on foreign assets and you must have failed to file FBARs.
- You must not have engaged in willful evasion of your tax obligations. Your failure to file all of the forms required of you must have resulted from a good faith misunderstanding of your obligations, or from mistake or inadvertent omission.
In addition, you must also comply with other specific requirements and instructions for streamlined amnesty programs. If you fail to follow any instructions at all, the IRS says that this “will result in returns being processed in the normal course without the benefit of the favorable terms of these procedures.”
Participation in streamlined amnesty programs requires you to file amended or delinquent tax returns as well as FBARs from the prior six years. You will need to pay the full amount of back income taxes that are due, as well as interest, at the time when you file.
Unfortunately, if you submit back tax returns and FBARs, this alerts the IRS to the foreign accounts. If you are found to be ineligible for streamlined amnesty or for any type of OVDP program, then you could face very serious financial penalties. Civil penalties just for a failure to file FBARs could be equal to the greater of $100,000 or 50 percent of the total balance of the unreported foreign accounts.
You do not want to take a chance on losing your money and investments. Before you try to apply for amnesty, contact a Washington DC IRS voluntary disclosure lawyer for assistance. Kevin Thorn and his team of professionals at Thorn Law Group have over 80 years experience to help you take advantage of any program you might be eligible for.