The Federal government is stepping up the pressure on taxpayers to report their offshore assets as a deadline to report foreign bank accounts draws near. Taxpayers need to be sharply aware of their responsibility to file the Form FinCEN 114 (formerly known as Form TD F 90-22.1), Report of Foreign Bank and Financial Accounts (“FBAR”), […]
The changes announced by IRS on June 18, 2014 make important modifications to the Offshore Voluntary Disclosure Program (“OVDP”). The changes include: Requiring additional information from taxpayers applying to the program; Eliminating the existing reduced penalty percentage for certain non-willful taxpayers in light of the expansion of the streamlined procedures; Requiring taxpayers to submit all […]
June is a busy month for taxpayers and tax pros alike. Nestled amid due dates for estimated tax payments and deadlines for taxpayers who were out of the country on Tax Day is one of the most overlooked dates for taxpayers: June 30, 2014. June 30, 2014 marks the due date for the Report Of […]
The IRS has authority to assert FBAR civil penalties. Before delving into the FBAR abyss, this is a good time to debunk some FBAR myths. First, there is no such thing as an FBAR penalty within the Offshore Voluntary Disclosure Initiative (“OVDI”). The FBAR penalty exists only outside of the OVDI framework. However, there is […]
In 1998, Congress enacted a limited privilege for tax advice that extends the same common law protections of confidentiality that apply to communications between a taxpayer and an attorney to communications between a taxpayer and any “federally authorized tax practitioner”. IRC § 7525(a)(1). Thus, if the communication would be considered privileged if it was between […]
With more than six million U.S. citizens living abroad, the IRS is looking to expand its net to bring in those U.S. Expats who are noncompliant with their tax obligations but are not willfully evading taxes may to come into compliance. On June 3, 2014, the Commissioner of the Internal Revenue Service, John A. Koskinen, […]
Despite the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) publishing final regulations for reporting bank accounts, securities accounts and other financial accounts located in a foreign country many taxpayers remain confused regarding the filing requirements, including the fast-approaching and accelerated filing deadline. Historically, the disclosure of foreign bank accounts was done by filing […]
A taxpayer who has not disclosed foreign bank accounts to the IRS can be charged with substantial miscellaneous Title 26 offshore penalties that ultimately can wipe out a taxpayer’s foreign assets. Disclosure is made by e-filing FinCEN Form 1114 (formerly Form TD F 90-22.1), Report of Foreign Bank and Financial Accounts (“FBAR”). The civil penalty […]
U.S. taxpayers with previously undisclosed interests in foreign financial accounts and assets continue to analyze and seek advice regarding the most appropriate methods of coming into compliance with their U.S. filing and reporting obligations. Many are pursuing participation in the current IRS Offshore Voluntary Disclosure Initiative known as OVDI (the current version began in 2012 […]
A taxpayer who has not disclosed foreign bank accounts to the IRS and to cure this delinquency and avoid criminal repercussions applies to the Offshore Voluntary Disclosure Initiative (“OVDI”), generally must pay a miscellaneous Title 26 offshore penalty, in lieu of traditional penalties that would apply to foreign assets or entities outside of OVDI. The […]
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