IRS Offshore Program Changes

The IRS has made changes in its offshore voluntary compliance programs. The Offshore Program is an amnesty program for taxpayers who have unintentionally failed to report interest, dividends and other income from foreign accounts. These changes give new options to assist taxpayers that live in the United States as well as those residing overseas.

These changes include no longer requiring the taxpayer have $1,500 or less in unpaid tax per year, requiring the taxpayer to declare that previous failures to comply were due to a nonwillful act, and it no longer requiring the risk questionnaire. They also require taxpayers to submit all account statements and pay offshore penalties at the time of the Offshore Voluntary Disclosure Program (OVDP). Penalties have also increased to 50% from the original 27.5%.

Penalties for not complying with the IRS Offshore Program and the Reporting of Foreign bank and Financial Accounts (FBAR) can include very high penalties that range from $10,000 to $100,000 or even 50% of the amount for each violation.

If you have any questions or would like to schedule an appointment please feel free to contact us at 630-663-1500 or you can email us at tax@greatwaysinc.com.