Recent actions document IRS efforts to target offshore revenues. It appears that offshore voluntary compliance efforts now exceed more than $9.9 billion in collected taxes, penalties and interest since 2009.
An IRS announcement states that their efforts have brought close to 100,000 taxpayers into compliance regarding offshore requirements. This includes 55,800 taxpayers resolving their tax obligations through the Offshore Voluntary Disclosure Program (OVDP). It also includes another 48,000 using other streamlined procedures to correct what the IRS labels “non-willful omissions.”
OVDP encourages taxpayers to become current on their tax returns. Otherwise, the IRS may detect noncompliance at a later date and issue even more severe penalties that could include criminal prosecution.
It is reasonable to believe that such efforts will continue. Under the Foreign Account Tax Compliance Act (FATCA) and other intergovernmental agreements, more information regarding foreign accounts will continue to pour into IRS offices. The IRS warns that participating banks concerning these agreements will continue to provide information regarding noncompliance with reporting requirements. This includes information obtained from the Department of Justice Swiss Bank Program.
As we mention on our website, anyone with foreign offshore assets of $10,000 or above may receive unwanted attention from the IRS. If the agency thinks you owe taxes or have failed to disclose that financial assets exist, this could result in seizure of assets, bank levies, wage garnishment and possibly even prison time.
For this reason alone, it can be extremely beneficial to have knowledgeable tax counsel on your side. Also, the complexity of offshore reporting requirements makes it even more important to be sure you are in compliance with tax rules and not inadvertently violating IRS regulations.