subject: Irs Offshore Fbar Voluntary Disclosure Program: What Is The Best Possible Option?
[print this page] Many years ago, it was simple to conceal foreign accounts from the IRS. However, that has changed due to numerous new information sharing agreements the IRS has made with other countries. In fact, the Internal revenue service is aware of many offshore accounts but do not have the capability to prosecute everybody for tax evasion. With that in mind the Internal revenue service has promoted its IRS offshore FBAR voluntary disclosure program. The penalties increase with each new version of the IRS offshore FBAR voluntary disclosure program, and the most recent version is the third. IRS offshore FBAR voluntary disclosure program actively does not expire. But the terms can be altered at any time..
The IRS offshore FBAR voluntary disclosure program works in this way:
First, you can hire a tax lawyer to investigate your case and promise that a disclosure into the IRS offshore FBAR voluntary disclosure program is the ideal move. The tax lawyer then mails a letter in and works to amend 8 years of returns to incorporate unreported income and absent FBARs. If they are capable to, the taxpayer then has to pay taxes and any interest that is unpaid. The taxpayer now has two alternatives. The taxpayer can agree to the standard penalty structure which involves a 27.5% penalty on the highest account value during the previous 8 years. This is the ideal choice when the taxpayer intentionally evaded taxes.
Or, the taxpayer could choose to "opt-out" of the standard penalty structure and the taxpayer's lawyer can then argue for reduced penalties. Usually, this equals a 5% penalty on the highest account value. Or the account might be small enough (under $75,000) so that only a 12.5% penalty will be applied.
Regardless of your choice, the taxpayer's attorney will need to guarantee that they taxpayer's claimed income is the same as their bank account by doing a mini audit. If a taxpayer opt-outs and disagrees with the penalty total, the taxpayer could take an administrative appeal. Then, if the taxpayer is discontented with those results, they can take the case to US tax court. However, while this is very unlikely, the US Supreme Court could end up as the ending decider of the penalty sum.
