The IRS's pursuit of U.S.taxpayers with money and assets hidden in offshore accounts is much more far-reaching than just its inquiry into the UBS accounts.
Washington, DC (PRWEB) September 10, 2009
The IRS recently reaffirmed its commitment to combating offshore tax evasion by forming a new elite unit of professionals dedicated to investigating and auditing offshore tax evasion by U.S. taxpayers. Kevin Thorn of Thorn Law Group, PLLC states that taxpayers with undisclosed foreign accounts should take careful notice of the IRS's commitment of resources to a long-term strategy for pursuing unreported income and assets kept in undisclosed offshore accounts. Said Thorn, "The IRS's pursuit of U.S.taxpayers with money and assets hidden in offshore accounts is much more far-reaching than just its inquiry into the UBS accounts."
The new IRS unit will be comprised of auditors and professionals with specialized experience in investigating complex cross-border transactions and multi-national business structures. The group will be a part of the IRS Large and Mid-Size Business division and will be a part of LMSB's global high-wealth industry office. The global high-wealth industry office will be responsible for monitoring and examining wealthy individual U.S. taxpayers as well as businesses and other entities suspected of offshore tax evasion.
In the short-term, the unit will provide much needed assistance to an estimated 10,000 cases related to the investigation of Swiss-banking giant UBS AG - including the 4,450 taxpayers UBS will provide to the IRS plus the thousands of taxpayers anticipated to participate in the IRS's offshore account voluntary disclosure initiative. U.S. taxpayers with undisclosed accounts in foreign banks, such as UBS, have just two weeks - or until September 23, 2009 - to make a voluntary disclosure of their offshore accounts to the IRS or risk facing increased monetary penalties and potential criminal prosecution.
Under the IRS's offshore account settlement initiative, taxpayers may potentially limit their tax liability for undisclosed foreign accounts to income on the accounts for the last six years - or the length of time the account was in existence, if less - plus interest on the income tax and an accuracy penalty of 20% of the unpaid tax for each year the account was undisclosed. Additionally, the taxpayer will be liable for a single penalty equal to 20% of the amount in the offshore account for the year in which the account had the highest aggregate value, which may be reduced to 5% under special circumstances. Additionally, the IRS will not refer any taxpayer who is accepted into the offshore account settlement program for criminal prosecution.
By contrast, Thorn points out, undisclosed offshore bank accountholders may receive civil penalties of up to 50% of the balance of each offshore account for each year the account is undisclosed as well as an additional income tax on income earned by the foreign account plus interest. Further, the IRS may impose a fraud penalty for each account of up to 75% of the value of unpaid taxes plus the greater of $100,000 or 50% of the offshore account balance for willful failure to file a Form TD F 90-22.1 - Report of Foreign Bank and Financial Accounts (FBAR). The IRS may also pursue criminal sanctions against U.S. taxpayers for intentional failure to disclose offshore accounts.
The new IRS unit was created in part to deal with the offshore settlement initiative; however it will play a larger role beyond the UBS investigation. The move signals an ever-increasing priority in the IRS offshore tax evasion enforcement strategy - aggressively pursuing individual U.S. taxpayers with undisclosed foreign accounts. "Given the IRS's assignment of highly-trained, specialized professionals to focus on the investigation of these accounts, it is more critical than ever for U.S. offshore accountholders to consider the IRS's settlement initiative or traditional voluntary disclosure options," advises Thorn.
For additional information on the news that is the subject of this release, contact Kevin E. Thorn or visit http://www.thorntaxlaw.com.
About Thorn Law Group, PLLC:
Thorn Law Group, PLLC is a law firm dedicated to helping clients resolve complicated international tax and financial problems.
Kevin E. Thorn, Managing Partner
Thorn Law Group, PLLC
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