The IRS is engaged in a never-ending crusade to uncover and collect every single penny of revenue that it claims taxpayers owe. And the truth is that the agency is very, very good at what they do. By and large, if you’re concealing income or engaging in some type of scheme to avoid taxation, they are eventually going to sniff it out.
One of the most popular methods of avoiding tax liability has historically been stashing money in offshore bank accounts. But as Forbes recently reported, that game seems to be up:
If you still have undisclosed foreign bank accounts you should feel uneasy. It’s clear that more data is coming from IRS whistleblowers. Plus, the IRS has mined banking details from thousands of U.S. taxpayers under the IRS voluntary disclosure programs in 2009, 2011 and 2012. And FATCA compliance rules are requiring even more disclosures
It’s not enough to simply close your offshore accounts even if you give the money away. But some choices can seem painful. The OVDP involves eight amended tax returns, eight FBARs and a 27.5% penalty. The latter can be a bitter pill so you may have been waiting anxiously for a new and easier IRS program as an alternative.
When the IRS announced details of its streamlined program on August 31, 2012, there was some disappointment at its narrow scope. The newest program is a simplified alternative for certain U.S. citizens living abroad who did not file tax returns and who owe minimal U.S. taxes, typically because of paying taxes where they reside.
While the details of this process are complicated, the point is simple: the IRS is gradually working to expose even the most complex and secretive schemes that taxpayers engage in. We’ve always believed that “playing by the rules” was the right thing to do—and these recent developments are confirming that belief.
But here’s the thing: the IRS is pursuing taxpayers here in the US with the same vigor. And they’re treating innocent mistakes just the same as they are deliberate dishonesty—subjecting taxpayers to stiff penalties and interest. The bottom line is that, no matter who you are, it’s important to take the time to get your taxes right. Because sooner or later, you will pay for your mistakes.
If you’re already in the midst of dealing with an IRS dispute, we can help! We’ll deal with the IRS on your behalf—so that you can go back to living your life. Contact us today if you’d like to learn more!