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IRS Total Collection

The collection of more than $4.4 billion so far from the two previous international programs has made the IRS excited in the FBAR- Offshore Program.

$4.4 Billion is just the tip of the iceberg.

Continuation of the  OVDP – FBAR Program

The Third Offshore Program

The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion.

Commissioner Statement:

“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.”

The third and latest  FBAR – Offshore Program

The FBAR – program is similar to the 2011 program in many ways, but with a few key differences.

Unlike last year, there is no set deadline for people to apply. However, the terms of the program could change at any time going forward. For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.

“As we’ve said all along, people need to come in and get right with us before we find you,” Shulman said. “We are following more leads and the risk for people who do not come in continues to increase.”

Tax Stats:

In all, the IRS has seen 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. Since the 2011 program closed last September, hundreds of taxpayers have come forward to make voluntary disclosures.

Those taxpayers who have come in since the 2011 program closed last year will be able to be treated under the provisions of the new OVDP program.

The overall penalty structure for the new program is the same for 2011, except for taxpayers in the highest penalty category.

 The New Program Penalty Structure

For the new program, the penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure.

This is up from 25 percent in the 2011 program.

Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011.

All taxpayers or participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.

Participants face a 27.5 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty.

Smaller offshore accounts will face a 12.5 percent penalty.

Taxpayers whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the new OVDP will qualify for this lower rate.

As under the prior programs, taxpayers who feel that the penalty is disproportionate may opt instead to be examined.

FBAR Offshore Program –  New Guidelines –  IRS Tax Experts – Tax Attorneys, Former IRS  Tax Specialty Firm – Since 1982

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