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IR-2013-54: IRS Reminds Those with Foreign Assets of U.S. Tax Obligations
May 23, 2013 7:23 am / Leave a comment
WASHINGTON — The Internal Revenue Service reminds U.S. citizens and resident aliens, including those with dual citizenship who have lived or worked abroad during all or part of 2012, that they may have a U.S. tax liability and a filing requirement in 2013.
The filing deadline is Monday, June 17, 2013, for U.S. citizens and resident aliens living overseas, or serving in the military outside the U.S. on the regular due date of their tax return. Eligible taxpayers get two additional days because the normal June 15 extended due date falls on Saturday this year. To use this automatic two-month extension, taxpayers must attach a statement to their return explaining which of these two situations applies. See U.S. Citizens and Resident Aliens Abroad for additional information additional information on extensions of time to file.
Nonresident aliens who received income from U.S. sources in 2012 also must determine whether they have a U.S. tax obligation. The filing deadline for nonresident aliens can be April 15 or June 17 depending on sources of income. See Taxation of Nonresident Aliens on IRS.gov.
Federal law requires U.S. citizens and resident aliens to report any worldwide income, including income from foreign trusts and foreign bank and securities accounts. In most cases, affected taxpayers need to fill out and attach Schedule B to their tax return. Certain taxpayers may also have to fill out and attach to their return Form 8938, Statement of Foreign Financial Assets.
Part III of Schedule B asks about the existence of foreign accounts, such as bank and securities accounts, and usually requires U.S. citizens to report the country in which each account is located.
Generally, U.S. citizens, resident aliens and certain nonresident aliens must report specified foreign financial assets on Form 8938 if the aggregate value of those assets exceeds certain thresholds.Instructions for Form 8938 explain the thresholds for reporting, what constitutes a specified foreign financial asset, how to determine the total value of relevant assets, what assets are exempted and what information must be provided.
Separately, taxpayers with foreign accounts whose aggregate value exceeded $10,000 at any time during 2012 must file Treasury Department Form TD F 90-22.1. This is not a tax form and is due to the Treasury Department by June 30, 2013. For details, see Publication 4261, Do You Have a Foreign Financial Account? Though this form can be filed on paper, Treasury encourages taxpayers to file it electronically.
Taxpayers abroad can now use IRS Free File to prepare and electronically file their returns for free. This means both U.S. citizens and resident aliens living abroad with adjusted gross incomes (AGI) of $57,000 or less can use brand-name software to prepare their returns and then e-file them for free.
Taxpayers with an AGI greater than $57,000 who don’t qualify for Free File can still choose the accuracy, speed and convenience of electronic filing. Check out the e-file link on IRS.gov for details on using the Free File Fillable Forms or e-file by purchasing commercial software.
A limited number of companies provide software that can accommodate foreign addresses. To determine which will work best, get help choosing a software provider. Both e-file and Free File are available until Oct. 15, 2013, for anyone filing a 2012 return.
Any U.S. taxpayer here or abroad with tax questions can use the online IRS Tax Map to get answers. An International Tax Topic Index page was added recently. The IRS Tax Map assembles or groups IRS forms, publications and web pages by subject and provides users with a single entry point to find tax information.
IRS Tax Tip 2013-42: Seven Tips for Taxpayers with Foreign Income
March 27, 2013 7:14 am / Leave a comment
1. Report Worldwide Income. The law requires U.S. citizens and resident aliens to report any worldwide income. This includes income from foreign trusts, and foreign bank and securities accounts.
2. File Required Tax Forms. In most cases, affected taxpayers need to file Schedule B, Interest and Ordinary Dividends, with their tax returns. Some taxpayers may need to file additional forms. For example, some may need to file Form 8938, Statement of Specified Foreign Financial Assets, while others may need to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts, with the Treasury Department. See Publication 4261, Do You Have a Foreign Financial Account?, for more information.
3. Consider the Automatic Extension. U.S. citizens and resident aliens living abroad on April 15, 2013, may qualify for an automatic two-month extension to file their 2012 federal income tax returns. The extension of time to file until June 17, 2013, also applies to those serving in the military outside the U.S. Taxpayers must attach a statement to their returns explaining why they qualify for the extension.
4. Review the Foreign Earned Income Exclusion. Many Americans who live and work abroad qualify for the foreign earned income exclusion. This means taxpayers who qualify will not pay taxes on up to $95,100 of their wages and other foreign earned income they received in 2012. See Forms 2555, Foreign Earned Income, or 2555-EZ, Foreign Earned Income Exclusion, for more information.
5. Don’t Overlook Credits and Deductions. Taxpayers may be able to take either a credit or a deduction for income taxes paid to a foreign country. This benefit reduces the taxes these taxpayers pay in situations where both the U.S. and another country tax the same income.
6. Use IRS Free File. Taxpayers who live abroad can prepare and e-file their federal tax return for free by using IRS Free File. People who make $57,000 or less can use Free File’s brand-name software. People who earn more can use Free File Fillable Forms, an electronic version of IRS paper forms. Free File is available exclusively through the IRS.gov website.
7. Get Tax Help Outside the U.S. Taxpayers living abroad can get IRS help in four U.S. embassies and consulates. IRS staff at these offices can help with tax filing issues and answer questions about IRS notices and tax bills. The offices also have tax forms and publications. To find the nearest foreign IRS office, visit the IRS.gov website. At the bottom of the home page click on the link labeled ‘Contact Your Local IRS Office.’ Then click on ‘International.’
More information is available in Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad. IRS forms and publications are available at IRS.gov or by calling 1-800-829-3676.
Additional IRS Resources:
- IRS Free File
- Publication 54, Tax Guide for U.S. Citizens and Resident Aliens Abroad
- Report of Foreign Bank and Financial Accounts (FBAR)
- Publication 4261, Do You Have a Foreign Financial Account?
- Form 8938, Statement of Specified Foreign Financial Assets
- Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts
- Form 2555, Foreign Earned Income
- Form 2555-EZ, Foreign Earned Income Exclusion
- International IRS offices
IRS YouTube Videos:
Foreign Filing Requirements – Forms 8938 and TD F 90-22.1 Handy Chart
September 10, 2012 7:53 am / Leave a comment
As the filing deadline gets closer, here is another reminder to file Form 8938 if required.
Stacie's Tax Tips and Other Stuff
Stacie Kitts, CPA Tax Partner Katherman Kitts & Co. LLP
May is almost over and June represents another big filing deadline for persons who have foreign bank accounts and investments. So here is your reminder. Your FBAR Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts is due at the IRS office – not mailed by – but received in their office by June 30. Don’t forget, the penalty for not filing this form is scary.
Also, if you are doing it yourself or hired a person who is not familiar with foreign reporting requirements, you might want to familiarize yourself with the chart below – prepared by our friendly IRS for your viewing pleasure.
The new Form 8938 Statement of Specified Foreign Assets is due with your tax return but not later than the extended due date should you decide for some crazy reason that you don’t…
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Foreign Filing Requirements – Forms 8938 and TD F 90-22.1 Handy Chart
May 30, 2012 7:00 am / 2 Comments on Foreign Filing Requirements – Forms 8938 and TD F 90-22.1 Handy Chart
Stacie Kitts, CPA Tax Partner Katherman Kitts & Co. LLP
May is almost over and June represents another big filing deadline for persons who have foreign bank accounts and investments. So here is your reminder. Your FBAR Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts is due at the IRS office – not mailed by – but received in their office by June 30. Don’t forget, the penalty for not filing this form is scary.
Also, if you are doing it yourself or hired a person who is not familiar with foreign reporting requirements, you might want to familiarize yourself with the chart below – prepared by our friendly IRS for your viewing pleasure.
The new Form 8938 Statement of Specified Foreign Assets is due with your tax return but not later than the extended due date should you decide for some crazy reason that you don’t want to file your tax return by the due date. Don’t blow this off either, as the penalty for not filing is just as scary as the FBAR.
Comparison of Form 8938 and FBAR Requirements |
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**Unmarried taxpayer living in the United States. If you are not married and not living abroad, you satisfy the reporting threshold only if the total value of your specified foreign financial assets is more than $50,000 on the last day of the tax year or more than $75,000 at any time during the tax year.
Related articles
- More On IRS Form 8938 vs. FBAR (forbes.com)
- Is Closing Foreign Bank Accounts An Alternative To Disclosure? (forbes.com)
- Last week at my other blog: Foreign account reporting; E-file fears grow (dontmesswithtaxes.typepad.com)
- Relinquishing U.S. Citizenship (forbes.com)
IRS Patrol – IRS Reminds Taxpayers that the Aug. 31 Deadline Is Fast Approaching for the Second Special Voluntary Disclosure Initiative of Offshore Accounts
September 27, 2011 6:05 am / Leave a comment
WASHINGTON — U.S. taxpayers hiding income in undisclosed offshore accounts are running out of time to take advantage of a soon-to-expire opportunity to come forward and get their taxes current with the Internal Revenue Service.
The IRS today reminded taxpayers that the 2011 Offshore Voluntary Disclosure Initiative (OVDI) will expire on Aug. 31, 2011. Taxpayers who come forward voluntarily get a better deal than those who wait for the IRS to find their undisclosed accounts and income. New foreign account reporting requirements are being phased in over the next few years, making it ever tougher to hide income offshore. As importantly, the IRS continues its focus on banks and bankers worldwide that assist U.S. taxpayers with hiding assets overseas.
“The time has come to get back into compliance with the U.S. tax system, because the risks of hiding money offshore keeps going up,” said IRS Commissioner Doug Shulman. “Our goal is to get people back into the system. The second voluntary initiative gives people a fair way to resolve their tax problems.”
The 2011 OVDI was announced on Feb. 8, 2011, and follows the 2009 Offshore Disclosure Program (OVDP). The 2011 initiative offers clear benefits to encourage taxpayers to come forward rather than risk detection by the IRS. Taxpayers hiding assets offshore who do not come forward will face far higher penalties along with potential criminal charges.
For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent penalties in certain narrow circumstances.
Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties. All original and amended tax returns must be filed by the deadline.
The IRS has made available the 2011 OVDI information in eight foreign languages for those taxpayers with undisclosed offshore accounts. The agency took this step to reach taxpayers whose primary language may not be English. These translations include the following languages: Chinese (Traditional and Simplified), Farsi, German, Hindi, Korean, Russian, Spanish and Vietnamese.
The IRS decision to open a second special disclosure initiative was based on the success of the first program and many more taxpayers coming forward after the program closed on Oct. 15, 2009. The first special disclosure initiative program closed with about 15,000 voluntary disclosures regarding accounts at banks in more than 60 countries. Many taxpayers came in after the first program closed. These taxpayers were deemed eligible to take advantage of the special provisions of the second initiative.
Further details about this initiative are provided in a series of questions and answers
FBAR Reporting Extended to November 1, 2011 For Certain Persons With Signature Authority Over Accounts Held During Years 2009 or Earlier
June 16, 2011 9:47 am / Leave a comment
Notice 2011-54 provides additional administrative relief to persons whose requirement to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to report signature authority over foreign financial accounts held during calendar year 2009 or earlier calendar years was properly deferred under Notice 2009-62, 2009-35 I.R.B. 260, or Notice 2010-23, 2010-11 I.R.B. 441.
On August 31, 2009, the Department of the Treasury and the Internal Revenue Service published Notice 2009-62, which, in part, extended the filing deadline for persons with no financial interest in a foreign financial account but with signature or other authority over that account (hereinafter referred to as “signature authority”) for the 2008 or earlier calendar years. In Notice 2010-23, the Department of the Treasury and the IRS further extended relief to persons whose filing deadline was properly deferred by Notice 2009-62 and provided a new filing deadline to June 30, 2011, to report signature authority over, but no financial interest in, foreign financial accounts for calendar year 2009 or earlier calendar years. The extensions were provided to allow the Treasury Department time to develop comprehensive FBAR guidance.
On February 24, 2011, the Financial Crimes Enforcement Network (FinCEN) published final regulations (76 FR 10234) amending the Bank Secrecy Act implementing regulations regarding FBARs, found at 31 CFR 1010.350 (formerly 31CFR 103.24). The regulations became effective on March 28, 2011, and apply to FBARs required to be filed by June 30, 2011, with respect to foreign financial accounts maintained in calendar year 2010, as well as to FBARs for subsequent calendar years.
The final regulations also provide that individuals who properly deferred their FBAR filing obligations pursuant to Notice 2010-23 may apply the provisions of the final regulations in determining their FBAR filing requirements for reports due June 30, 2011, with respect to foreign financial accounts maintained in calendar years beginning before 2010. In March 2011, the IRS released a revised FBAR form with accompanying instructions that reflect the amendments made by the final FBAR regulations.
The IRS and FinCEN recently have been informed that individuals with signature authority over, but no financial interest in, foreign financial accounts are having difficulty compiling the information needed to file complete and accurate FBARs with respect to the 2009 or earlier calendar years by the June 30, 2011 deadline, as previously extended by Notice 2009-62 or Notice 2010-23. Accordingly, the IRS and FinCEN provide the following additional administrative relief:
- Persons having signature authority over, but no financial interest in, a foreign financial account in 2009 or earlier calendar years for which the reporting deadline was extended by Notice 2009-62 or Notice 2010-23 will now have until November 1, 2011, to file FBARs with respect to those accounts.
- The deadline for reporting signature authority over, or a financial interest in, foreign financial accounts for the 2010 calendar year remains June 30, 2011.
The administrative relief provided in the Notice does not limit the relief provided in FinCEN’s Notice 2011-1, which was released on May 31, 2011, and revised on June 6, 2011. A copy of revised FinCEN Notice 2011-1 may be found at www.fincen.gov.
Additionally, the administrative relief provided in this Notice does not affect the requirements to provide information or file FBARs in connection with the IRS’s 2009 Offshore Voluntary Disclosure Program or the 2011 Offshore Voluntary Disclosure Initiative. Nor does this Notice alter the deadlines for electing to participate in, or fulfilling the submission requirements of, the Offshore Voluntary Disclosure Program or the Offshore Voluntary Disclosure Initiative.
EFFECT ON OTHER DOCUMENTS
Notice 2010-23 is modified and supplemented.
The principal author of the notice is Emily M. Lesniak of the Office of Associate
Chief Counsel (Procedure and Administration). For further information regarding the
Notice, you can contact Emily M. Lesniak at (202) 622-4570 (not a toll-free call).
Related articles
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IRS Patrol – FBAR Filing Deadline Extended for Certain Financial Professionals
May 31, 2011 1:15 pm / 1 Comment on IRS Patrol – FBAR Filing Deadline Extended for Certain Financial Professionals
WASHINGTON — The Internal Revenue Service and the Financial Crimes Enforcement Network (FinCEN) today announced that a small subset of individuals with only signature authority required to file the Report of Foreign Bank and Financial Accounts (FBARs) will receive a one-year extension beyond the upcoming filing date of June 30, 2011.
FinCen today issued Notice 2011-1 that extends the deadline until June 30, 2012, for the following individuals:
- An employee or officer of a covered entity who has signature or other authority over and no financial interest in a foreign financial account of another entity more than 50 percent owned, directly or indirectly, by the entity (a “controlled person”).
- An employee or officer of a controlled person of a covered entity who has signature or other authority over and no financial interest in a foreign financial account of the entity or another controlled person of the entity.
All other U.S. persons required to file an FBAR this year are required to meet the June 30, 2011, filing date. Unlike with federal income tax returns, extensions of time to file are not available.
Today’s notice was issued to facilitate more accurate compliance of FBAR filings in the wake of recent finalization of regulations. The FBAR filing requirements, authorized under one of the original provisions of the Bank Secrecy Act, have been in place since 1972.
On Feb. 24, 2011, FinCEN published a final rule that amended the Bank Secrecy Act regarding FBARs.
The FBAR form is used to report a financial interest in, or signature or other authority over, one or more financial accounts in foreign countries.
U.S. persons are required to file FBARs Form TD F 90-22.1 annually if they have a financial interest in or signature authority over financial accounts, including bank, securities or other types of financial accounts, in a foreign country, if the aggregate value of these financial accounts exceeds $10,000 at any time during the calendar year.
Related articles
- Report of Foreign Bank and Financial Accounts (FBAR) (bespacific.com)
- Avoiding the Foreign-Account Penalty (online.wsj.com)
Mr. Shulman Our Fearless IRS Leader Is At It Again: Introducing the 2011 Offshore Voluntary Disclosure Initiative – Pay A Penalty and Stay Out of Jail
February 9, 2011 9:33 am / 1 Comment on Mr. Shulman Our Fearless IRS Leader Is At It Again: Introducing the 2011 Offshore Voluntary Disclosure Initiative – Pay A Penalty and Stay Out of Jail
By Stacie Clifford Kitts, CPA
Well, he is at it again. Mr. Shulman our fearless IRS leader, said that his goal is to get people back into the U.S. tax system, and that’s why the IRS has decided to announced the 2011 Offshore Voluntary Disclosure Initiative (OVDI). But don’t think this new program is a free ride. Nope – there are penalties for disclosing your offshore bank account no no’s even under this new plan.
For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent penalties. Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.
I can only assume there were lots of taxpayers who didn’t quite make the cutoff for the last disclosure program who are now freaking out about possible prosecution, penalties and interest – specially in light of the recent disclosures by Wikileaks – maybe that has something to do with our latest get out of jail card – maybe not. But I sure can speculate.
Here’s the whole scoop:
IR-2011-14, Feb. 8, 2011
WASHINGTON — The Internal Revenue Service announced today a special voluntary disclosure initiative designed to bring offshore money back into the U.S. tax system and help people with undisclosed income from hidden offshore accounts get current with their taxes. The new voluntary disclosure initiative will be available through Aug. 31, 2011.
“As we continue to amass more information and pursue more people internationally, the risk to individuals hiding assets offshore is increasing,” said IRS Commissioner Doug Shulman. “This new effort gives those hiding money in foreign accounts a tough, fair way to resolve their tax problems once and for all. And it gives people a chance to come in before we find them.”
The IRS decision to open a second special disclosure initiative follows continuing interest from taxpayers with foreign accounts. The first special voluntary disclosure program closed with 15,000 voluntary disclosures on Oct. 15, 2009. Since that time, more than 3,000 taxpayers have come forward to the IRS with bank accounts from around the world. These taxpayers will also be eligible to take advantage of the special provisions of the new initiative.
“As I’ve said all along, the goal is to get people back into the U.S. tax system,” Shulman said. “Combating international tax evasion is a top priority for the IRS. We have additional cases and banks under review. The situation will just get worse in the months ahead for those hiding assets and income offshore. This new disclosure initiative is the last, best chance for people to get back into the system.”
The new initiative announced today – called the 2011 Offshore Voluntary Disclosure Initiative (OVDI) — includes several changes from the 2009 Offshore Voluntary Disclosure Program (OVDP). The overall penalty structure for 2011 is higher, meaning that people who did not come in through the 2009 voluntary disclosure program will not be rewarded for waiting. However, the 2011 initiative does add new features.
For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent penalties. Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.
Taxpayers participating in the new initiative must file all original and amended tax returns and include payment for taxes, interest and accuracy-related penalties by the Aug. 31 deadline.
The IRS is also making other modifications to the 2011 disclosure initiative.
Participants face a 25 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty.
The IRS also created a new penalty category of 12.5 percent for treating smaller offshore accounts. People whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the 2011 initiative will qualify for this lower rate.
The 2011 initiative offers clear benefits to encourage taxpayers to come in now rather than risk IRS detection. Taxpayers hiding assets offshore who do not come forward will face far higher penalty scenarios as well as the possibility of criminal prosecution.
“This is a fair offer for people with offshore accounts who want to get right with the nation’s taxpayers,” Shulman said. “This initiative offers them the chance to get certainty about how their case will be handled. Just as importantly, those who truly come in voluntarily can avoid criminal prosecution as well.”
The IRS is handling processing of the voluntary disclosures in centralized units to more efficiently process the applications.
The IRS has launched a new section on www.IRS.gov that includes the full terms and conditions on the 2011 Offshore Voluntary Disclosure Initiative, including an extensive set of questions and answers to help taxpayers and tax professionals. The web site also includes details on how people can make a voluntary disclosure.
In the first voluntary disclosure program in 2009, taxpayers faced up to a 20 percent penalty covering up to a six-year period. Taxpayers came forward with about 15,000 voluntary disclosures in that effort covering banks in more than 60 countries.
Shulman said IRS efforts in the international arena will only increase as time goes on.
“Tax secrecy continues to erode,” Shulman said. “We are not letting up on international tax issues, and more is in the works. For those hiding cash or assets offshore, the time to come in is now. The risk of being caught will only increase.”
Related Articles
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- IRS reduces penalties if tax cheats come clean (seattletimes.nwsource.com)
- IRS Offers New Amnesty For Offshore Tax Cheats (blogs.forbes.com)
- IRS Reprises Offshore Tax Amnesty (online.wsj.com)
- IRS reduces penalties if tax cheats come clean (sfgate.com)
- Tax Evaders Told to Come Clean before Crackdown (cbsnews.com)
- I.R.S. Offers New Amnesty Deal for Offshore Accounts (nytimes.com)
- IRS: Tax evaders can avoid jail if they come clean (usatoday.com)
- Mideast unrest complicates Wikileaks (politico.com)
Tax Guidance: Notice 2010-23 Provides FBAR Filing Relief For Some Persons
March 15, 2010 7:22 am / Leave a comment
Notice 2010-23 provides FBAR filing relief for some persons with signature authority and who own commingled funds. The Notice also modifies and supplements Notice 2009-62.
Notice 2010-23 will be published in Internal Revenue Bulletin 2010-11, on March 15, 2010.
FBAR Filing Requirement Temporarily Suspended for Non US Citizens
March 3, 2010 3:03 pm / Leave a comment
Announcement 2010-16 temporarily suspends, for persons who are not United States citizens, United States residents or domestic entities the requirement to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), for the 2009 and earlier calendar years.
Announcement 2010-16 will be published in Internal Revenue Bulletin 2010-11 on March 15, 2010.
Notice 2010-23 provides FBAR filing relief for some persons with signature authority and who own commingled funds. The Notice also modifies and supplements Notice 2009-62.
Notice 2010-23 will be published in Internal Revenue Bulletin 2010-11, on March 15, 2010.
What Kind of People Hide Money in Swiss Accounts?
October 23, 2009 2:40 pm / Leave a comment
By Stacie Clifford Kitts, CPA
Ever wonder what kind of people hide money in Swiss bank accounts? Well here is your chance to get a glimpse into the world of some people who really did it.
There must have been some sweat’ in going on over at these tax cheats house’s when it was announced that a deal was struck to give them up.
I just can’t understand the motivation of the people on the below list. The dollar amounts that were hidden and that are now subjecting the account holders to prosecution – just not worth it in my mind.
I know, we are talking a few million dollars in most cases and that is a large amount of cash – no doubt. Nevertheless, let us put it into perspective, the risk is jail, a 50% penalty, plus the tax that should have been paid including associated penalties and interest.
Besides, if I had a million dollars or so after tax, (which these tax cheats would have) I am confident that I would be happy with that. Yes – a cool million is okay with me. Moreover, I think the rest of the “average” folk out there would agree with me.
Don’t’ get me wrong, I’m never going to turn down a few million dollars if it is offered (legally this is). However, if in a different life I was willing to risk jail over some crime that I was contemplating, the payoff would have to be some astronomical amount of money, so much in fact, that I would never get away with it because everyone on the planet would be looking for me.
So the good news for me, I will never be on a “cheat” list because the compensation will never – ever be enough to justify the risk.
Oct. 5, 2009 — Roberto Cittadini of Bellevue, Wash., pleaded guilty to filing a false tax return and admitted to concealing nearly $2 million in Swiss bank accounts. Cittadini, a retired sales manager for Boeing, failed to file a Report Foreign Bank and Financial Accounts (F-BAR) for 2001 through 2003.
Sept. 25, 2009 — Juergen Homann of Saddle River, N.J., pleaded guilty to failure to file a Report of Foreign Bank or Financial Accounts and accepted responsibility for concealing more than $5 million in Swiss bank accounts.
Aug. 14, 2009 — John McCarthy was charged with failing to inform the government of a Swiss bank account as part of a scheme to move at least $1 million from the United States into Swiss bank accounts with the goal of avoiding the payment of federal income taxes.
July 28, 2009 — Jeffrey P. Chernick, of Stanfordville, N.Y., pleaded guilty to charges of filing a false tax return. Chernick, who owns a corporation which represents toy manufacturers in China and Hong Kong, accepted responsibility for concealing more than $8 million in Swiss bank accounts.
June 25, 2009 — UBS client, Steven Michael Rubinstein of Boca Raton, Fla., pleaded guilty to filing a false tax return for tax year 2004. On April 1, 2009, Rubinstein was charged with filing a false tax return that intentionally failed to disclose the existence of a Swiss bank account maintained by UBS of which he was the beneficial owner and failed to report any income earned on that account.
April 14, 2009 — Robert Moran, of Lighthouse Point, Fla., pleaded guilty to a criminal information charging him with filing a false income tax return. Moran accepted responsibility for concealing more than $3 million in assets in a secret bank account at UBS in Switzerland.
Legal Actions to Date
Aug. 21, 2009 — Former UBS banker Bradley Birkenfeld was sentenced to 40 months in prison. Birkenfeld worked as a private banker for UBS AG and assisted an American billionaire real estate developer evade paying $7.2 million in taxes.
Aug. 20, 2009 — Hansruedi Schumacher and Matthias Rickenbach were indicted for conspiring to assist wealthy American clients conceal their assets by establishing sham offshore entities. Schumacher was an executive manager at Neue Zuercher Bank (NZB), a private Swiss bank. Rickenbach was a Swiss attorney who advised U.S. clients.
Feb. 18, 2009 — UBS AG, Switzerland’s largest bank, entered into a deferred prosecution agreement on charges of conspiring to defraud the United States by impeding the Internal Revenue Service (IRS).
Nov. 12, 2008 — Raoul Weil, a senior executive of a large Swiss bank, was charged with conspiring with other executives, managers, private bankers and clients of the banking firm to defraud the United States.
June 30, 2008 — The Justice Department filed papers seeking an order from a federal court in Miami, Fla., authorizing the Internal Revenue Service (IRS) to use a John Doe summons to request information from Zurich, Switzerland-based UBS AG about U.S. taxpayers who may be using Swiss bank accounts to evade federal income taxes.
Dec. 12, 2007 — Igor Olenicoff, president and owner of Olen Properties Corporation, pleaded guilty to filing a false tax return for tax year 2002 related to foreign bank accounts he failed to disclose to the IRS. According to Olenicoff’s plea agreement, during the years 1992 through 2004, Olenicoff owned, controlled and had signatory authority over financial accounts outside of the United States.
October 15 – IRS Reminds Us Time is Running Out
October 1, 2009 8:30 pm / Leave a comment
[Stacie says: The IRS just sent out this Oct 15 reminder. Don’t procrastinate if you still need to file your tax return or report your foreign income – time is running out.]
Listen to an Audio File for Podcast
WASHINGTON — The Oct. 15 deadline is fast approaching for millions of taxpayers who requested a six-month extension to file their 2008 tax returns.
It’s also the deadline for special voluntary disclosures by taxpayers with assets in previously undisclosed offshore financial accounts.
In most cases, Oct. 15, 2009, is the last day taxpayers may timely file their 2008 federal tax returns. The IRS expects to receive as many as 10 million tax returns from taxpayers who used Form 4868 to request a six-month extension to file their returns. Some taxpayers, for example, may have requested a filing extension to claim the first-time homebuyer credit for a home purchase that closed after the April 15 deadline.
Some taxpayers can wait until after Oct. 15 to file. This includes those serving in Iraq, Afghanistan or other combat zone localities and people affected by recent natural disasters.
First-Time Homebuyer Credit
First-time homebuyers who purchased a home in 2009 may be able to receive a credit of up to $8,000 for home purchases that closed since the beginning of the year. First-time homebuyers who purchased a home in 2008 may be able to receive a credit of up to $7,500. The 2008 credit must be repaid over 15 years.
The credit is claimed on Form 5405. See the First-Time Homebuyer Credit page on this web site for more details.
E-file and Free File
The IRS encourages taxpayers to e-file. E-file with direct deposit results in a faster refund than by using a paper return. Electronic returns also have fewer errors than paper returns.
Oct. 15 is the last day to take advantage of e-file or the Free File program.
Free File is a fast, easy and free way to prepare and e-file federal taxes online. The Free File program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the IRS and the Free File Alliance LLC, a group of private sector tax software companies.
Two Free File tax preparation and e-filing programs are available. Traditional Free File is available for taxpayers with adjusted gross incomes of $56,000 or less. Free File Fillable Forms can be used by people who earned more. The Free File page on this web site has more details.
Deadline nears for Special Offshore Voluntary Disclosures
Oct. 15 is the deadline for special voluntary disclosures by taxpayers with assets in previously undisclosed offshore financial accounts.
Under the special provisions issued in March, taxpayers with these accounts originally had until Sept. 23, 2009, to come forward. Those taxpayers who do not voluntarily disclose their accounts by Oct. 15 face harsh civil penalties, where applicable, and possible criminal prosecution.
Tax professionals or individuals who want to initiate a voluntary disclosure should call their local IRS Criminal Investigation office. Individuals or their representatives may either contact the nearest Special Agent in Charge, IRS Criminal Investigation, stating their wish to make a voluntary disclosure, or provide a letter outlining information needed to assist the IRS in determining their acceptance into the voluntary disclosure program.
See the Voluntary Disclosure page on IRS.gov for more details.
Taxpayers with questions on the offshore issue may also call the IRS Voluntary Disclosure Hotline (215-516-4777) .
IRS Extends Deadline for Disclosing Hidden Offshore Accounts
September 21, 2009 2:39 pm / Leave a comment
Here is the official announcement.
WASHINGTON ─ The Internal Revenue Service today announced a one-time extension of the deadline for special voluntary disclosures by taxpayers with unreported income from hidden offshore accounts. These taxpayers now have until Oct. 15, 2009.
Under special provisions issued in March, taxpayers with these hidden accounts originally had until Sept. 23, 2009 to come forward. Those taxpayers who do not voluntarily disclose their hidden accounts by the new deadline face much harsher civil penalties, where applicable, and possible criminal prosecution.
IRS officials decided to extend this deadline after receiving repeated requests from tax practitioners and attorneys around the country following an influx of taxpayer requests. By extending the deadline for a short period of time, the IRS is providing relief for those taxpayers who had intended to come forward prior to the deadline, but faced logistical and administrative challenges in meeting it. The extension will allow tax preparers and attorneys the necessary time to interview and advise their backlog of taxpayers with these hidden accounts, and prepare the necessary paperwork to qualify for the special penalty provisions.
The IRS also announced that there will be no further extensions.
WooHoo Foreign Accounts Tax Amnesty Program Extended
September 21, 2009 6:40 am / Leave a comment
By Stacie Clifford Kitts
The Associated Press reported this evening that the IRS will announce on Monday an extension of the tax amnesty program to October 15. The IRS source would not speak on record, so I am crossing my fingers in anticipation of the official announcement. Here is the AP article
7 Days and Counting to Report Your Foreign Activity
September 16, 2009 8:56 pm / Leave a comment
By Stacie Clifford Kitts
Don’t forget, the amnesty deadline for reporting your foreign activity is fast approaching.
The IRS’s voluntary disclosure program is over after September 23, 2009. If you need to disclose any previously unreported accounts and income, now is the time.
If you get on board, the IRS has agreed not to criminally prosecute.
For more information, take a look at these frequently asked questions offshore activities.
The filing relief deadline has been extended to June 30, 2010 for taxpayers who need to file an FBAR report for 2008, 2009 or earlier calendar years if they meet the following criteria:
1) persons with signature authority over, but no financial interest in, a foreign financial account, and
2) persons with a financial interest in, or signature authority over, a foreign commingled fund.
See notice 2009-62 for more information