In the tax world, foreign bank accounts are the new “black.” The IRS recently announced a third voluntary disclosure program to encourage taxpayers with undisclosed foreign bank accounts and assets to come into compliance without criminal prosecution. The IRS’ third voluntary disclosure program comes on the heels of its recently announced successes in connection with the first two voluntary disclosure programs. Unlike the two previous programs for offshore accounts, the 2012 voluntary disclosure program has no deadline to participate. And this new program presents particular challenges to California state taxpayers.
The IRS has been focused on aggressively pursuing U.S. taxpayers who hold accounts in foreign jurisdictions since 2003. Five years ago, many tax practitioners did not know what a Report of Foreign Bank and Financial Accounts form looked like, and even fewer taxpayers knew of their obligation to file the return annually. Dire penalties exist for taxpayers who have foreign bank accounts and fail to report them to the IRS on an FBAR. Many U.S. taxpayers purposely parked their income in foreign jurisdictions with favorable bank secrecy laws, such as Switzerland, in an effort to avoid detection by the IRS. Undaunted, the IRS pursued criminal prosecutions of U.S. and foreign individuals who aided citizens in avoiding income taxes in the U.S. As a result, the IRS was successful in securing the names of U.S. account holders who have foreign accounts in foreign jurisdictions, such as Switzerland and India.
This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.
To view this content, please continue to their sites.
Not a Lexis Subscriber?
Subscribe Now
Not a Bloomberg Law Subscriber?
Subscribe Now
LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.
For questions call 1-877-256-2472 or contact us at [email protected]