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IRS: Time to 'get right' with the government
U.S. residents who have unreported offshore accounts are being given until Sept. 23 to report those accounts to the Internal Revenue Service if they want to avoid criminal charges and pay a reduced civil penalty.
Those who “fully cooperate with the IRS both civilly and criminally” will have their taxes and interest due assessed going back six years. The agency will assess a penalty equal to 20 percent of the amount in a foreign account or entity in the year with the highest aggregate value.
But that penalty can be reduced to 5 percent if:
- An individual did not open the account or form the entity.
- No activity took place during the time the account or entity was controlled by the individual.
- All U.S. taxes have been paid on the funds in the account or entity and only the earnings haven’t been declared.
Residents who don’t come forward and are caught by the IRS could face a monetary penalty of up to 50 percent and criminal prosecution.
“My advice to those taxpayers is very simple,” said IRS Commissioner Doug Shulman. “The IRS has been steadily increasing the pressure on offshore financial institutions that facilitate concealment of taxable income by U.S. citizens. That pressure will only increase under my watch. Those who are unlawfully hiding assets should come and get right with their government through our voluntary disclosure process.”