Just because a taxpayer fails to qualify under the criteria as being low risk is not a reason to avoid applying to the program
Chicago, Illinois (PRWEB) December 13, 2012
A new streamlined IRS program for delinquent American expatriates has been introduced on September 1, 2012. American expatriates living abroad who are considered low-risk taxpayers are encouraged to participate in this program. American expats have to file only 3 years of past due expatriate tax returns and 6 years of FBARs (Reports of Foreign Bank and Financial Accounts) to become compliant if they participate in this program.
Per the original IRS statement back in August 2012, US expats who don’t have any high risk factors and owe less than $1,500 in tax due will be processed in a streamlined way. “Although, many delinquent American expats don’t owe any tax after applying a combination of foreign earned income exclusion, foreign housing exclusion and foreign tax credit, several of our clients have decided not to participate in this streamlined program because they didn’t meet all risk factors”, says ZM Ishmurzina, the principal at Artio Partners.
On December 6, 2012 the IRS issued a further clarification about low-risk taxpayers.
“Just because a taxpayer fails to qualify under the criteria as being low risk is not a reason to avoid applying to the program. Missing one of the factors only means that a revenue agent will review the taxpayer's application. That does not mean there's going to be an audit. It means it's going to be reviewed and could be subject to examination”, said David Horton, director of the IRS Large Business and International Division's international individual compliance function, at the American Bar Association Section of Taxation's annual National Institute on Criminal Tax Fraud in Las Vegas.
Moreover, the IRS "will not necessarily beat up on a taxpayer just because he's a little bit over or doesn't meet one of the criteria," said Christopher Sterner, IRS deputy chief counsel (operations). "It's just we're not guaranteeing that the returns will just be processed without any further inquiry from the Service. I don't think people should be afraid to use this process if they really are a low-risk taxpayer."
This clarification is good news for delinquent American expats living abroad who were not sure about participating in this streamlined program.
Should you hire an expat CPA to help with this process?
The IRS will carefully review expatriate tax returns submitted under this program. If you decide to proceed with an expatriate tax professional, make sure to choose a CPA who provides international tax services and specializes in US expat tax preparation and planning for Americans living abroad.
International tax experts at Artio Partners will help you participate in this program and become compliant. We offer a transparent flat-fee package for American expats. To learn more about our services, please visit http://www.artiopartners.com/
About Artio Partners
Artio Partners provides US expat tax services to American expatriates living abroad and dual citizens from over 75 countries.
We specialize in US expatriate tax preparation, past due expat tax returns and complex international tax issues like FBAR, FATCA, foreign tax credit, foreign real estate, PFIC, foreign adoption and controlled foreign corporations. For more information please visit Artio Partners.