LehmanTaxLaw

That was then -- and this is now -- The jaws are closing on the U.S. Taxpayer. <p> I will be posting an article shortly about the actions that are being taken now by the U.S. to force the full disclosure of all foreign assets and income of U.S. taxpayers. The article is intended to encourage high net worth individuals with unreported foreign income and assets to take advantage of the I.R.S. Volunt

LehmanTaxLaw

Amnesty – Mostly the Innocent? What do you do about it? Prior to the announcement of the Amnesty program, the Internal Revenue Service always had a Voluntary Compliance program that would permit taxpayers who had not filed their returns properly, or not filed tax returns at all, to come forward on their own. By voluntarily filing the appropriate tax returns or amended tax returns to make the sure taxpayer was current with the Internal Revenue Service, the criminal tax exposure was waived so long as no investigation of the taxpayer was in process. This program, which was relied on for years, would normally require the taxpayer to pay the taxes due on the late or amended returns, the interest due on those taxes and a late payment penalty or accuracy penalty of 25%. Other than that, on only rare occasions would a case require the payment of any more penalties, unless of course there was obvious fraud, which could result in higher penalties. Recently, the Internal Revenue Service published statistics that reflected approximately 3,500 people have taken advantage of the Amnesty Program. This seems rather small in light of the fact that there are published figures that indicate there are approximately 100,000 individuals with offshore bank accounts, approximately 50,000 of which are involved with U.B.S. From a law practice standpoint, it seems that a lot of the very “innocent” and “near innocent” are stepping forward to take advantage of the Amnesty Program. These are individuals that otherwise would ordinarily qualify for the regular Internal Revenue Service Program. However, because of the Amnesty Program, the Internal Revenue Service is going to look closer at voluntarily compliance filings “outside” of the Amnesty Program. Therefore, for the first time, taxpayers must face a choice of whether to accept the Amnesty Program with its guaranty of no criminal exposure and its penalty tax of 20% on the bank deposits, or to file under the ordinary Voluntary Compliance Program and avoid criminal exposure, and face potential civil penalties that could be higher than the 20% payment on bank deposits. In many cases these are taxpayers that have not been hiding bank deposits of unreported income from business or illegal activities. Rather they have been hiding bank deposits from inheritances and other previously taxed income. By choosing amnesty, now everything becomes subject to the 20% bank deposit tax. In accounts where there have been big losses, the removing offshore balances might be less than the 20% tax. LEARN MORE about this topic from Richard S. Lehman, P.A. Attorney-client privilege is one of the strongest privileges available under law.