If you have undisclosed income overseas, you have until Aug. 31 to come clean with the IRS under an amnesty program that will result in reduced fines and prevent possible criminal prosecution.
By Steven N. Klitzner
Time is running out.
If you’ve been cheating on your taxes by hiding money in overseas bank accounts, you have until Aug. 31 to report the money to the IRS under an amnesty program.
Under the Offshore Voluntary Disclosure Initiative, taxpayers who come clean on their taxes will not face criminal prosecution and penalties will be reduced.
However, those who do not come forward by the Aug. 31 deadline could face both significant fines and criminal prosecution.
“It gives people a chance to come in before we find them,” Internal Revenue Service Commissioner Doug Shulman told Reuters when the program was announced in February.
This is the second time the IRS has offered amnesty. The first time the IRS offered leniency for those who came forward voluntarily with their offshore bank account information, the government closed 2,000 cases.
Those who came forward voluntarily were fined 20 percent – a much smaller fine than they would have paid had the IRS found out about them first.
The amnesty programs come at particularly precarious time for U.S. taxpayers who have been hiding money overseas.
Earlier, the IRS negotiated a deal with credit card companies to disclose customers who linked their credit card accounts with offshore accounts, allowing them to cover expenses in the United States using offshore money that was going untaxed by the IRS.
In addition, the United States Department of Justice pierced the Swiss banking veil, allowing the IRS to gain access to information about U.S. taxpayers holding money in the world’s most famous tax haven.
Most recently, the Department of Justice has asked the federal court in San Francisco to allow the IRS to demand that banking giant HSBC provide information about its customers holding money in bank accounts in India. That request comes as the Department of Justice has notified Zurich-based Credit Suisse Bank, one of the world’s largest financial institutions, that it is the target of a criminal investigation for its alleged role in assisting U.S. taxpayers in hiding income.
So what do the amnesty program and crackdowns on bank accounts in Switzerland and India mean for you?
So what do the amnesty program and crackdowns on bank accounts in Switzerland and India mean for you?
That answer is simple: If you’re hiding money from the IRS in offshore accounts, you’re taking a tremendous risk – a risk that could end in huge penalties and even jail time.
For that reason, take this Aug. 31 deadline seriously.
Now is the time to see a tax professional and come clean.
The alternative is a life of worry, always wondering when the U.S. government is going to find out about your offshore bank accounts.
Steven N. Klitzner is a Certified Tax Resolution Specialist, a member of the American Society of IRS Problem Solvers, and an Aventura attorney. You can contact him at 305-682-1118 to obtain a free subscription to his newsletter titled The IRS Times & Inquirer.
