Can’t Avoid Paying Taxes Through Offshore Banking
In the past 9 years, the IRS has been running the “Voluntary Disclosure” program, which allowed tax dodgers with offshore accounts to willfully come forward and avoid criminal charges. This program, however is about to end in just 6 months from now and the IRS is more than ready to catch all those you didn’t take advantage of it and though they could avoid paying taxes through offshore banking.
What is the “Voluntary Disclosure” Program
The Voluntary Disclosure program started in Protected content its main purpose was to bring U.S. tax dollars back to the States. After the FATCA was introduced and the most popular offshore jurisdictions agreed to disclose information about US taxpayers’ accounts, it became much easier for the IRS to find those who tried to willfully dodge paying taxes. As you already know, intentional tax avoidance is a crime, so the Voluntary Disclosure program was a chance to spare yourself the trouble. However, the fact that you won’t be prosecuted doesn’t mean you get out of the situation for free. Since Protected content , as stated by Bloomberg Technology, over 56,000 American taxpayers have come forward and they had to pay all the missed back taxes, interest and penalties. The total amount of money the IRS has collected as a result of the program to date is over $11 billion.
Negligence Won’t Save You Either
You may think you dodged a bullet if your tax non-compliance was unintentional, but we have bad news for you. Many US taxpayers living on working abroad don’t know that they are required by law to file a tax return and in many cases an FBAR each year even if they don’t owe any taxes. The IRS is determined to identify all those who did not disclose their foreign accounts. So if you simply didn’t know you were supposed to report your offshore account you may still get into trouble.
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The Streamlined Program
The streamlined program was introduced to help exactly that type of taxpayers who were negligent of the law but did not willfully avoid paying taxes by hiding money in offshore accounts. This program will continue to run even after the ‘Voluntary Disclosure’ ends and it requires non compliant taxpayers to pay back the money they owe for all missed years plus interest. Penalty charges will not be applied on top.
Now is the Time to Come Forward
The number of people taking advantage of the ‘Voluntary Disclosure’ program has significantly decreased last year. This may mean that generally US taxpayers have become more diligent and do not hide money abroad, or it could also mean that they are still trying to avoid paying taxes through offshore banking and hoping that they won’t get caught. If you happen to be part of the latter group, we would strongly encourage you to use the Voluntary Disclosure program while you still can. Once it ends in September, the IRS will not stop looking for tax dodgers and they certainly have the means and resources to uncover non-compliant tax dodgers. It’s better to pay your taxes with interest and penalty on top than being prosecuted.
Do you need a tax professional to help you in your dealings with the IRS? Perhaps you simply need advice on tax planning and offshore banking? FAS CPA & Consultants can help with all of that and more. Contact us today on Protected content .
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