Delray Beach, FL (PRWEB) June 26, 2014
Professional tax preparers have often faced challenges in working with clients who have offshore investments or those who earn other income outside of the United States. The IRS's Offshore Voluntary Disclosure Program was intended to encourage non compliant taxpayers to come into compliance. However many taxpayers have been unwilling to do so for fear of severe penalties. The new announcement by the IRS is designed to make it easier for those are non compliant to come to the table and it is hoped it will result in thousands of taxpayers making good on their obligations.
The highlights of the announcement are an expansion of the streamlined filing compliance procedures and important modifications to the Offshore Voluntary Disclosure Program. The important distinction in these cases is between those taxpayers whose non compliance was non-willful.and those who intentionally avoided paying taxes. The Department of Justice is also working in tandem with the IRS to identify US based institutions who have willfully assisted taxpayers in their avoidance of taxes. Moreover, thousands of foreign institutions have also agreed to cooperate with the U.S. government and provide information on taxpayers who have assets overseas and are avoiding paying taxes.
The Offshore Voluntary Disclosure Program was launched by the IRS in 2012 and the IRS reports that more than 45,000 taxpayers have used the program paying about $6.5 billion in taxes, interest and penalties.It is hoped the new announcement will convince non compliant taxpayers who have previously been reluctant to come forward to do so. For non-willful taxpayers residing outside the U.S. all penalties will be waived and for those residing inside the U.S. there will be a miscellaneous offshore penalty equal to 5 percent of the foreign financial assets that gave rise to the tax compliance issue.
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