Texans — or residents of any state, for that matter — who have chosen to keep their funds in an overseas bank can come clean about their hidden assets, then pay owed taxes, penalties and interest without worrying about the federal government prosecuting them.
The Internal Revenue Services has restarted a program that will allow taxpayers to come forward and tell the IRS of their offshore assets. An IRS official said that when the agency made the same offer in 2009 and 2011, it brought in $4.4 billion from 33,000 taxpayers.
The official said taxpayers who get caught hiding their overseas holdings will face a punishment that is much harsher.
Taxpayers who tell the IRS about their offshore accounts will pay penalties as high as 27.5 percent, along with as much as eight years worth of interest and taxes. Those with less than $75,000 will pay a penalty of 12.5 percent, and some taxpayers might pay less.
The IRS official said it’s in taxpayers’ best interest to open up their books to the agency. The IRS could cease to offer the program without notice or even increase the penalties.
And most importantly, taxpayers who report don’t have to worry about the government filing criminal charges. The IRS official said foreign governments are increasingly telling the U.S. government about offshore accounts.
The IRS also has opened offices abroad to gain a foothold in various countries. In 2009, a Swiss bank paid a fine of $780 million and disclosed information about Americans suspected of shielding their money.
With the federal government eager to find all kinds of new revenue streams, it is not surprising that it will use the IRS to target taxpayers. Anyone who believes they are being targeted by the IRS should consult with an experienced tax attorney.
Source: Houston Chronicle, “IRS reviving program seeking offshore tax cheats,” Alan Fram, Jan. 9, 2012