subject: The Effect Of Irs Announcement On Offshore Voluntary Disclosure Deadline [print this page] If you start measuring the tax collection efficiency of Virginia State, you wont be dissatisfied with their performance. Since 1971, Virginia has a strong legislature and unique judicial system operated under seventh Constitution of Virginia. The department of taxation has also set up a mission of serving to the public with integrity, efficiency and consistency.
After the announcement of 21st September, 2009 by IRS it has got a new feather added. They announced final deadline for tax payers with offshore accounts who want to get benefits out of Special voluntary disclosure program. The extended schedule was from September 23 to 15th of October. Now you must be looking for the response (success or failure) this special program obtained?
Profoundly, the acceptance of this program by most of the tax payers would do many good to the IRS as they can filter the information for next use. In spite of all these efforts there were criticisms too as evidenced from IRS announcements.
We can observe a mix of comments from Tax analysts, VA Tax Lawyer and law firms dealing with IRS tax divisions here.
The analysis in detail:
1) The tax payers, who decided to come forward before the deadline, faced logistical and administrative challenges. Though the extension looked good but it was not long enough as reported by several tax analysts.
2) As per the news reported from IRS criminal investigations, collecting client complaints from past tax liabilities were fine, but getting bank statements to submit a disclosure request was always difficult.
3) There are cases of taxpayers having accounts with Swiss, UBS and Non-UBS just started waking up with the news. As experts said, the government should leave the disclosure option till the end of the year as long as IRS investigation is ongoing with the other offshore bank accounts.
4) Most of the tax payers seeking legal help were not cheats but again few account holders were still dreaming about better treatments or concessions after the deadline pass.
5) The reason of such overwhelming responses could also be the family security of the immigrants. Most of them and their children opened accounts in offshore (foreign accounts) before coming to the US. So, just a fear of criminal prosecution was not the reason for such high level of response and to convince the legal help seeker.
Expert suggestion:
There can be an alternative solution to get more people involved into this program. Had there been any discretion of penalties between 20% and 5% in their foreign bank account, the participation rate would rise up.
Thus IRS was good to its words and their efforts to revive the due taxes were commendable. But few alterations would do better as experts and VA lawyers have to opine. Virginia, the state consistently ranks in top 20% of the states having low tax burden in the country. So we can expect much fair tax paying system prevailing there. VA Tax attorneys and IRS Lawyers can discuss more on the recovery option.
