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Don’t Go To Jail Over Your Foreign Accounts
By Stacie Clifford Kitts, CPA
Okay – so what does that mean?
It means that if you are trying to hide income in a foreign account, your bank is going to tattle on you to the Internal Revenue Service.
So…..If you do have cash or an investment in a foreign account – or have signing authority over a foreign account, you need to make sure you are properly reporting it to the IRS.
Form TD F 90-22.1 Report of Foreign Bank and Financial Accounts is for this purpose. The Form is due and must be received by the IRS no later than June 30 each year. And, if you don’t file it – be ready to receive a whopping $10,000 fine.
In addition, all foreign income must also be reported on your income tax return.
However, there is some good news. The IRS has recently announced a new voluntary disclosure program that allows U.S. taxpayers until September 23, 2009 to disclose any previously unreported accounts and income. Here’s some more good news, if you follow the guidelines of the program, the IRS promises not to refer you to the Department of Justice for criminal prosecution.
For more information, take a look at these frequently asked questions offshore activities.
Since not reporting your offshore activity can subject you to criminal prosecution by the Department of Justice, it is HIGHLY recommended that you learn what your responsibility is concerning this type of activity.
Note: 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
IRS Seeks Public Comment for Proposals to Boost Tax Preparer Performance Standards
[stacie says – The following is a news release from the IRS.
The IRS is seeking to regulate tax preparers including ascertaining tax preparer competence mainly for that group of people who are not CPA’s, Lawyers, or Enrolled Agents.
Many people may be shocked to discover that at present anyone (even someone with no training) can hold themselves out as a tax preparer, prepare tax returns, and charge a fee for this service. **Scary**
I-can-tell-you some of these unregulated preparers have caused serious havoc for many unsuspecting tax payers. Hence Mr. Shulman’s plan to enforce standards for these preparers.]
WASHINGTON — The Internal Revenue Service is inviting the public to contribute ideas as part of an effort to ensure high performance standards for all tax preparers.
Last month, IRS Commissioner Doug Shulman announced plans to develop by year-end a comprehensive set of proposals to ensure consistent standards for tax preparer qualifications, ethics and service.
Subsequently, the IRS announced a series of public forums, beginning in Washington, D.C., on July 30, to gather input from various stakeholder groups and organizations.
Two panel discussions involving representatives of consumer groups and tax professional organizations will take place at the Ronald Reagan Building amphitheater in Washington starting at 9 a.m. on July 30. Anyone interested in attending should confirm attendance by sending an e-mail message to: CL.NPL.Communications@irs.gov.
Notice 2009-60 issued today is an additional call for public comments and helps guarantee that all interested individuals and entities have the opportunity to contribute ideas.
“We are casting the widest net possible by seeking comment from not only tax preparers and the industry but also from the general public,” Shulman said. “All ideas are welcome at the table.”
More than 80 percent of taxpayers use either a paid-preparer or third-party software to prepare their annual tax returns. Professionals who represent clients before the IRS, including attorneys, accountants and enrolled agents are already subject to IRS oversight. But under current law, a much larger group of return preparers are not.
Written comments must be received by Aug. 31, 2009. They should be submitted to CCPA:LPD:PR (Notice 2009-60), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, D.C. 20044. Comments may also be e-mailed to: Notice.Comments@irscounsel.treas.gov
Please include “Notice 2009-60” in the subject line of any e-mail messages. More details can be found in IRS Notice 2009-60.
Stacie's Tax Stuff 