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A "Get Out of Jail Free" Card - New IRS Tax Amnesty for Offshore Accounts
Posted in Estate Planning

Taxpayers (individuals and entities) with offshore accounts not previously disclosed to the IRS, and on which taxes have not been paid, have until August 31, 2011, to disclose the accounts to the IRS and avoid jail time. A disclosing taxpayer must pay back taxes and interest as well as monetary penalties, but those penalties are lower than would likely apply if the IRS discovered the accounts on their own or if disclosure is made voluntarily after the August 31 deadline.

This new offer of tax amnesty, announced February 8, 2011, follows a similar program offered to taxpayers in 2009. For taxpayers whose accounts never topped $75,000, the new program is more favorable, while those with larger accounts face somewhat greater penalties than offered under the 2009 program. All this coincides with redoubled efforts on the part of the IRS to identify and prosecute taxpayers with undisclosed foreign assets and income. A sophisticated "Global High Wealth Unit" and increased pressure on foreign banks to divulge the holders of "secret" accounts are part of this newly intensified focus on wealthy Americans with offshore assets. The risks to non-disclosing taxpayers were starkly illustrated on February 4 when a federal court in Miami sentenced both a father and son to 10 years in prison for tax evasion related to undisclosed offshore accounts.

Obtaining detailed account information from a foreign financial institution can be a slow process, so taxpayers who know or believe they may want to take advantage of this amnesty offer should begin working now to meet the August 31 deadline. Bingham Greenebaum Doll has quietly and confidentially assisted clients with disclosures under prior IRS amnesty programs. If you require assistance evaluating your risks and options under this new program, please contact Greg Duncan or Carol Hartman at 317-635-8900.

For more, see:

The Wall Street Journal, "IRS Sets Offshore Amnesty, Part II"

The IRS web site, "Voluntary Disclosure: Questions and Answers Q&A", "IRS Offers New Amnesty For Offshore Tax Cheats"

  • Partner

    Greg works with estate and wealth transfer and matrimonial law in the firm's Estate Planning Department and is also part of the Corporate Services Department. Among the legal services he provides for his clients are estate and gift ...



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