For most US expats who are behind on their taxes it is as simple as filing your US taxes, your FBAR forms and writing a letter explaining why you have fallen behind. You just need to make sure your taxes are prepared correctly.”
New York, NY (PRWEB) January 31, 2012
The IRS has begun a new Foreign Bank and Financial Account Report (FBAR) amnesty program, following the success from the previous years’ amnesty programs. Since the first program launched in 2009, the IRS has collected more than $4.4 Billion in payments from penalties related to delinquent FBAR reports that have been disclosed under the first two programs. The IRS has already received more than $1 Billion in pre-payments from taxpayers who chose to come forward with their delinquent FBAR reports during the 2011 disclosure program.
Many Americans overseas find themselves in the situation where they are behind on their FBAR reports. The FBAR must be filed with the U.S. Department of the Treasury by any U.S. Person who has over $10,000 in overseas bank or financial accounts. While failure to file typically results in increased penalties and potential criminal persecution, the IRS recently introduced a new Offshore Voluntary Disclosure Program (it's third) as a way to encourage individuals to come clean with their offshore accounts.
According to David McKeegan, President of Greenback Expat Tax Services: “US expats are not the primary target of the IRS’s Offshore Voluntary Disclosure Program and thankfully the IRS is starting to let them know this. We have helped hundreds of US expats come forward and voluntarily get caught up on their US taxes and FBAR filings and these individuals have not been penalized. If you owe money on your taxes, you will likely need to pay the failure to file and failure to pay penalties, but between the Foreign Tax Credit and the Foreign Earned Income Exclusion, individuals need to be making a significant income before this becomes a risk. For most US expats who are behind on their taxes it is as simple as filing your US expat taxes, your FBAR forms and writing a letter explaining why you have fallen behind. You just need to make sure your taxes are prepared correctly.”
The Offshore Voluntary Disclosure Initiative from 2011, offered US citizens and US expats the ability to file their delinquent US taxes and FBAR forms with reduced penalties and no criminal prosecution. If you came forward and submitted your documents voluntarily then you were able to avoid criminal prosecution and receive more lenient (and fixed) penalties from the IRS. The new program offers a similar reduction in penalties and avoidance of criminal prosecution, albeit with slightly higher maximum penalties.
It should also be noted that the 2012 Voluntary Disclosure Program does not currently have an end date. This is both good and bad in the sense that it could end in March or could run for the whole year. The IRS has stated that although there is no deadline, this could change at any time so it is recommended that any US expat that wants to come forward do so sooner rather than later.
Mr. McKeegan continued, “This is great news for US expats who are behind on their taxes and or FBAR filings. And it really should motivate any late filers to come forward and get caught up before things change. This is an opportunity not to be missed by any US expat who is behind on his/her taxes.”
For more information on the Offshore Voluntary Disclosure Program and other US expat tax topics, please visit http://www.greenbacktaxservices.com
About Greenback Expat Tax Services
Greenback Expat Tax Services specializes in preparation of US Expat Taxes for Americans living abroad. Incorporated in New York, Greenback’s CPAs have 30+ years specialist experience in US expat taxes. Greenback offers flat fee pricing; a simple, hassle-free process; and, most importantly, CPAs who are experts in the ins-and-outs of US expat taxes. For more information and to download a free guide to US expat taxes, visit http://www.greenbacktaxservices.com