Amnesty for offshore accounts
The IRS is bearing down on tax evaders who hid investments (and income) in Switzerland. Today UBS AG agreed to give the IRS about 10,000 names. (LINK)
If you’ve decided to get into compliance, get it done soon. The IRS amnesty program ends on Sept 23, 2009.
If you decide to take the amnesty program, here are some caveats:
1) The amnesty program reduces the penalties, it does not eliminate them. The penalties for tax due are reduced from 75% down to 20%. And the FBAR penalty is reduced from 50% down to a single 20% penalty on your maximum 5 year balance. So there are still penalties, but at least there’s an incentive to disclose now, voluntarily.
2) Don’t call the IRS until you talk with a tax attorney. Notice I did not say accountant. That’s because your attorney cannot testify against you on this matter, but a CPA is obligated to do so. Let the attorney hire the accountant who will work through the tax issues.
3) Clean up the rest of your taxes. The amended return you file for amnesty must be 100% correct on all other matters. Any other hidden items on the amended return can exposie you to possible prosecution for a fraudulent return.
4) There are several other requirements needed to be eligible for amnesty. (The income cannot be illegally obtained, you cannot be currently under criminal investigation or under IRS audit, for example).
There are lots of reasons clients “fall into” hidden accounts. Inheritance, immigration, marriage, etc. Your attorney can help you minimize the penalties. Have a friend call me if you want a pointer to a good tax attorney.
Mike Dayoub is a tax preparer and financial planner in North Fulton, Georgia. 770 361-3139 website
