Improving offshore reporting and FBAR compliacne associated with foreign bank accounts, investments and income remains a top priority for the IRS according to IRS Commissioner John Koskinen. Commissioner Koskinen also said “Taxpayers here and abroad need to take their offshore tax and filing obligations seriously.” What are those who continue to attempt to hide offshore assets and income from the IRS risking? Criminal tax evasion and jail time, and penalties and interest that could and often do exceed existing account balances.
The recent developments surrounding the “Panama Papers” are providing insight into the structures used by the world’s rich and powerful to attempt to avoid taxation. However, the noose continues to tighten as the United States increases FATCA pressure on countries around the globe, by threatening the loss of access to US markets. To date, more than 100 nations have signed onto the agreement, and tens of thousands of financial institutions are providing information directly to the IRS regarding US taxpayer’s offshore accounts and transactions.
IRS offshore reporting and FBAR compliance means coming clean with the IRS about your offshore activities over the past years, and updating prior years tax returns and FBARs to reflect these assets and income. The most common vehicle for disclosing offshore assets is the Offshore Voluntary Disclosure Program or OVDP. The OVDP limits the penalties and interest that the IRS will levy against US taxpayers with offshore interests, and most importantly, relieves US taxpayers of the risk of criminal prosecution for tax evasion.
The key to a comprehensive disclosure is a candid conversation with an experienced tax attorney. The attorneys at Allen Barron provide our clients the protection of the attorney-client privilege, which allows us to have transparent and open conversations with our clients while shielding that information legally from the IRS. This provides a sound foundation for evaluating a taxpayer’s offshore exposure, the options available and the best strategy for moving forward and fulfilling IRS offshore reporting and FBAR compliance requirements.
We invite you to contact us for a complimentary and substantive consultation at 866-631-3470.
