IRS/ Offshore Bank Accounts
IRS Becoming Aggressive About Offshore Tax Evasion One problem the IRS has to tackle is that of United States taxpayers who dodge paying taxes by placing their funds in offshore accounts and then failing to report them. In the last several years, the IRS has made it clear that this is breaking the law and that taxpayer’s who are caught hiding foreign assets may face penalties, fines and even criminal prosecution. “It’s a bad bet to hide money and income offshore,” said IRS Commissioner John Koskinen. “Taxpayers are best served by coming in voluntarily and getting their taxes and filing requirements in order.”
The IRS has recently become more aggressive in finding taxpayers who are hiding their money in offshore accounts. In 2009, they started the Offshore Voluntary Disclosure Program. This program allows United States citizens who have foreign bank accounts to voluntarily disclose the accounts to the IRS and, in return, be assessed lowered penalties and avoid criminal prosecution. Since the inception of this program, the IRS has collected over seven billion dollars in back taxes and penalties from offshore accounts. They have also issued rules under the Foreign Account Tax Compliance Act mandating foreign financial institutions to inform them of any accounts held by United States citizens.
As part of their ongoing attempt to combat offshore tax evasion, the IRS has set aside a page on its website devoted to this issue. The page, entitled “Abusive Offshore Tax Avoidance Schemes” explains the laws governing the reporting of foreign income as well as outlining some of the legitimate offshore activities. It also highlights some of the institutions and activities that are in the IRS radar as far as avoiding foreign taxes are concerned.Some of those include:
- Private banking (U.S. and offshore)
- Personal investment companies
- Captive insurance companies
- International Business Companies (IBCs)
- Foreign (offshore) partnerships, LLCs and LLPs
- Foreign trusts
- Foreign corporations
- Offshore private annuities
- Captive insurance companies
- Offshore bank accounts and credit cards
- Related-party loans
In summary, the IRS is constantly on the lookout for schemes designed to avoid paying taxes on income from assets held in offshore accounts. They claim that, to date, they have audited thousands of offshore back accounts. In the process, they have collected billions of dollars in restitution and initiated numerous criminal investigations. The long and short of this issue is that failing to report income and assets held in foreign accounts is not a wise move in light of the recent IRS crackdown! If you have questions about the reporting of assets held in foreign accounts or about a tax debt you are unable to pay, our tax settlement professionals are happy to discuss your situation free of charge. (https://allproshadeconcepts.com/) For more information about our services, call us today at 877.889.6527 or visit us at www.professionaltaxresolution.com. With over 16 years in the business of resolving tax problems, we have a thorough understanding of both domestic and foreign tax law tax together with the experience to know how to apply that knowledge to your specific financial situation.[/tab] [/tabcontent] [/tabs]