IRS Shares the Love: Another Amnesty Program for Secret Offshore Bank Accounts

10:52 am Uncategorized

IRS Logo 150x150 IRS Shares the Love: Another Amnesty Program for Secret Offshore Bank Accounts Just in time for Valentine’s Day, the IRS announced last week that it is providing amnesty from prosecution to Americans with secret offshore bank accounts until August 31, 2011.

The new 2011 Offshore Voluntary Disclosure Initiative is similar to the IRS’ most recent amnesty program that ended in October 2009, with slightly stiffer penalties for those with more than $75,000 in unreported offshore accounts.  Those currently under investigation are not eligible for the new amnesty program.

The IRS believes that a new federal law that offers large rewards for tax whistleblowers and its new Global High Wealth investigation unit will incentivize those with illegal offshore accounts to take advantage of the new amnesty program.  Those who do must pay all back taxes owed between 2003 and 2010, a 20 percent penalty on those back taxes, interest and a penalty equal to 25 percent of the account’s highest balance between 2003 and 2010 (known as a “FBAR” penalty after the Report of Foreign Bank and Financial Account form that taxpayers must file annually).  Those with accounts under $75,000 may qualify to pay a reduced penalty of 12.5 percent of the account’s highest balance between 2003 and 2010.

A pre-clearance process is required of any taxpayer who wishes to make a voluntary disclosure of an unreported offshore account.  Before filing amended returns and applying for the amnesty program, a taxpayer or a taxpayer’s attorney can fax the IRS’ Criminal Investigation unit the taxpayer’s identifying information—name, Social Security number and date of birth—and the IRS will notify the taxpayer by fax whether he or she has been cleared to make an offshore voluntary disclosure.

For assistance with establishing legal offshore business and asset protection plans, contact our California asset protection law firm.

Get started by contacting our Orange County asset protection estate planning law firm as soon as possible.

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