Do you need to report offshore income and accounts in prior years to reduce the large civil penalties, or potential criminal penalties, imposed by the IRS? The penalties are steep; willful failure to disclose these assets can result in criminal penalties. In addition, there are large civil penalties for failure to disclose—50% of the maximum value of the account or $100,000, whichever is greater—as measured during the compliance period (for willful failure to file). For non-willful failure to file, the penalties can reach $10,000 per international informational form per year.
The IRS has implemented several offshore voluntary disclosure options for U.S. taxpayers with undisclosed foreign financial assets. These programs outlined below are programs used to minimize both the civil and criminal penalties and to encourage U.S. taxpayer compliance.
- IRS Criminal Investigation Voluntary Disclosure Practice
- Streamlined Filing Compliance Procedures
- Delinquent FBAR Submission Procedures
- Delinquent International Informational Return Submission Procedures
Which offshore disclosure program you should use is dependent upon your specific facts and circumstances. It is more important than ever that individuals and organizations with offshore assets and offshore income use these IRS sanctioned programs to become compliant again.
Why You Need and International Advisor
U.S. individuals with foreign income and assets must stay informed on the various international reporting rules. An international tax professional can help you determine the correct U.S. reporting requirements for each offshore asset and report the proper income. Our team of experienced professionals can help you identify the potential benefits and affects, including how the penalties are calculated, as well as the process and requirements of each program. They can also assist you in determining which offshore voluntary disclosure program is right for you.
We will provide you with the relevant information you need to help you or your organization stay in compliance and stay aware of the constantly changing international tax landscape. Our international tax professionals not only deliver exceptional service through their own expertise and experience, they also have access to a global network of CPA firms through our membership in HLB Global.