by Brian Mahany
In the first IRS offshore voluntary disclosure program, many of the 15,000 participants waited until the last week before filing. That’s understandable; coming forward to the IRS and receiving a big tax bill in return is a difficult decision for many. Waiting until the last minute isn’t an option in 2011, however.
Why not? There are two reasons.
First, the only sure way to avoid criminal prosecution is to come forward before the IRS Criminal Investigations Division finds you first. The tax cops aren’t slowing down during the amnesty. Under the agency’s “first contact” policy, the government will prosecute if they find you first, even during the amnesty program.
There is also a practical reason to avoid delay. This year’s program requires all forms, returns, amended returns, disclosures and payments be complete by the August 31st deadline. Simply notifying the IRS of your intent to participate won’t work like it did in 2009.
It could take your lawyer and accountant several weeks to complete the process. If you are missing critical account data, it could take longer for your foreign bank to gather necessary records. Remember the program requires disclosures back to 2003.
Calls are coming in but once again we see clients sitting on the fence debating whether to take advantage of the program. Wait too long and it may be too late.
Mahany & Ertl is a boutique law firm concentrating in tax matters. From our offices in Milwaukee, Detroit and Portland, we help clients across the U.S. with tax compliance and IRS problems. We can help with a wide range of tax issues including the offshore voluntary disclosure program (foreign bank account tax amnesty). Partner Brian Mahany is former state revenue commissioner from Maine and a former tax prosecutor and criminal division agent. He brings 28 years of experience to best solve your tax problem.