“Individuals who fail to file the FBAR will face serious civil and criminal penalties as well as the possibility of criminal prosecution. If ever there was a sense of urgency, it is now, " states Anthony Verni, CPA and Tax Attorney
Miami, FL. (PRWEB) March 05, 2013
“For those individuals who have yet to come forward and report their foreign income, as well as the existence of their foreign accounts, the clock is ticking”, says Anthony Verni, FBAR expert and Tax Attorney. “Individuals will face serious civil and criminal penalties as well as the possibility of criminal prosecution. If ever there was a sense of urgency, it is now!”
Over the past several years the Treasury Department has been increasing its enforcement initiatives with respect to unreported offshore income as well as its investigation of unreported foreign financial accounts.
On February 14, 2013, the U.S. Department of the Treasury announced the signing of a bilateral agreement with Switzerland to assist it with the implementation of the information reporting and withholding tax provisions, commonly known as the Foreign Account Tax Compliance Act (FATCA).
According to Acting Secretary of the Treasury, Neal S. Wolin, the announcement “marks a step forward” in the Treasury’s efforts to work with foreign governments in order to combat offshore tax evasion and to flush out those taxpayers who have decided to wait and see what happens rather than proactively addressing their compliance issues in the form of participation in the Off Shore Voluntary Disclosure Program or by taking other compliance measures.
FATCA, which was enacted by Congress in 2010, focuses on non-compliance by U.S. taxpayers who utilize foreign accounts. The bilateral agreement signed on the 14th of February is the first signed agreement and is based on the second of the two model agreements circulated by the Treasury Department.
Switzerland is one of eight countries that have either signed or initialed the intergovernmental agreement (IGA) which helps facilitate the effective and efficient implementation of FATCA and indirectly, will help weed out those individuals who were required but failed to file Foreign Bank Account Reports (FBARS). The Treasury Department is currently engaged with more than 50 countries and jurisdictions to curtail offshore tax evasion, and more signed agreements are expected to follow in the near future.
"The impact of these agreements will be immediately felt by those taxpayers who have heretofore elected not to comply with FATCA and who have failed to otherwise comply with the FBAR reporting requirements," states Verni.
The latest initiative comes on the heels of last year’s amendment to Section 6501 (e) of the Internal Revenue Code, which extends the statute of limitation for purposes of assessment from three to six years in cases where unreported offshore income exceeds $5,000.00. The stature extends the period in which the Internal Revenue Service may assess additional income tax to six years from the latter of when the return was due without regard to extension or the date the return was actually filed.
The effective date for the amendment to Section 6501 applies to all returns as long as the time period for the assessment of taxes has not expired as of March 18, 2010. Accordingly, if the income tax return was filed after March 18, 2010, or the assessment statute was still otherwise open as of that date, and more than $5,000.00 was omitted from gross income that is attributable to specified foreign financial assets, the statute remains open under Section 6501€ for a total of six years from the date the return was filed. The foregoing applies whether or not Form 8938 was filed with the taxpayer’s Form 1040.
For further information about FBAR regulations, please contact Mr. Verni at 866-700-1040.
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