This program, much like other voluntary disclosure programs set forth by the IRS, is their attempt to convince delinquent taxpayers to basically turn themselves in, without the government having to dedicate manpower to actually searching for these people
Encino, CA (PRWEB) July 19, 2012
Attempting to step up its efforts to encourage delinquent income tax filers to come forward and pay their taxes, the IRS has announced a program to help some American citizens who are residing in a foreign country to catch up on their back taxes without incurring penalties that are traditionally levied against such filers. While living abroad, U.S. citizens are supposed to file Reports of Foreign Bank and Financial Accounts each year to declare their income and pay taxes. For some of those who have failed to do so, the IRS is extending an olive branch.
“The economic downturn in this country has had a far-reaching impact not only on citizens in America but also those who are living overseas,” said Michael Rozbruch, founder and CEO of Tax Resolution Services, Co., “As a result, people are failing to file their returns and the IRS isn’t bringing in enough money, and this is why we are seeing programs such as these crop up.”
However, the olive branch will only be extended so far; the proposed plan, which is set to begin in September 2012, is only geared toward overseas non-filers who have simple returns and owe less than or up to $1,500 in each of the covered years. Anyone who owes in excess of $1,500 per year in delinquent taxes will still be subject to regular penalties for non-filers.
With an ever-expanding tax gap (the difference between the amount of money owed to the IRS and the amount collected), estimated now at $450 billion, in addition to the increasing number of non-filers, the IRS is making attempts to close the gap and bring more money into the government’s coffers by removing some of the penalties associated with failure to file. So far, the sum of the IRS’s efforts geared specifically toward targeting offshore accounts have helped bring in $5 billion.
“This program, much like other voluntary disclosure programs set forth by the IRS, is their attempt to convince delinquent taxpayers to basically turn themselves in, without the government having to dedicate manpower to actually going out and searching for these people,” said Rozbruch. “What it boils down to is that the IRS simply does not have the manpower to track these people down efficiently. It’s also an admission by the IRS and the Feds that the economy has gotten so bad, and people are so much less willing to fork over their hard-earned dollars to the government, that the government is willing to accept a fraction of what people owe now, rather than wait to try to collect the whole sum later.”
While this program may be enticing to American residents living overseas in search of tax relief, there is still a fairly significant process that compliers must endure. All delinquent tax returns must be filed and some may be required to undergo an IRS audit, a process that can be stressful and rigorous. Rozbruch recommends that anyone committing to any of the IRS’s voluntary disclosure programs, including this one, seek professional assistance from a legitimate firm. “Just because they’ve dolled it up to look like a great deal,” said Rozbruch, “doesn’t mean that it’s going to be a walk in the park. The IRS is still a massive collection agency, and delinquent taxpayers are still the primary target. American citizens, even those living abroad, would be wise to seek expert representation and not attempt to navigate this process alone.”
About Tax Resolution Services, Co. (TRS)
The tax attorneys, CPAs, EAs, and tax relief professionals at Tax Resolution Services, Co., pioneered the tax resolution industry. They have successfully settled thousands of cases over the past 14 years, and are committed to providing affordable, competitive solutions to businesses and individuals. Got IRS stress? Contact TRS. To find out how TRS can help, or to receive a free tax problem consultation, visit TaxResolution.com or call (888) 851-5894.