by Brian Mahany
As expected, the IRS has announced a second amnesty program for taxpayers with undisclosed foreign accounts. While having a bank or brokerage account in a foreign country is not illegal, failing to tell Uncle Sam about the account or intentionally failing to pay taxes on offshore interest or dividends is a crime.
Unlike the first offshore amnesty that took place in 2009, this one is tougher. The IRS can collect more in penalties and look back at more years. Why the tougher rules?
The IRS wants to reward people who came forward early and came into compliance. Taxpayers who procrastinated won’t quite get the same savings.
Even though the rules are tougher, the amnesty is still a good deal for those with tax compliance problems. Taking part in the amnesty means tax, interest and some penalties need to be paid but there is a break in the penalties and you avoid prison.
Although this amnesty is limited to taxpayers with hidden overseas assets, anyone can take advantage of the IRS’ first contact policy and avoid jail.
To encourage voluntary compliance with the Internal Revenue Code, the IRS has adopted a no prosecution, no prison policy for taxpayers who approach the IRS first with a problem. If the IRS audits you or the guys and girls with guns come to your door first (IRS Criminal Investigations Division), all bets are off. Even if you immediately pay your taxes or file any missing returns, the IRS looks at who made the first contact.
If you are seriously delinquent in returns, payments or know that there are serious mistakes on an already filed return, seek the assistance of a tax attorney. A knowledgeable lawyer can insure that your rights are protected and insure the first contact policy is initiated by you and properly documented.
Mahany & Ertl is a full service law firm that assists clients in a wide variety of tax problems. Our Wisconsin based tax lawyers concentrate on audit defense, compliance issues, collections, Tax Court litigation and criminal tax defense. We can also help compromise your debts with the IRS. Our offices are in Milwaukee; our clients are located across the United States from Maine to Hawaii. Contact attorney Brian Mahany directly at (414) 704-6731 or through the firm’s website, https://www.mahanyertl.com