Voluntary Disclosure for Unreported Offshore Income (e.g. Bank Accounts)

The IRS started a six month amnesty program pending September 23, 2009, to encourage Voluntary Disclosure by US taxpayers who have offshore accounts

Generally the voluntary disclosures will require:

1. Payment of all taxes and interest for the previous six years. 2. Assessment of an accuracy penalty under Internal Revenue Code Section 6662 (20%) or a delinquency penalty (25%) for all years and 3. An FBAR penalty of 20% of the highest account balance during the six year period. The IRS has provided an example of an individual who's had $1 million in an account earning 5% a year ($50,000) and has indicated that the cost for this individual to make a voluntary disclosure would be $386,000 (38.6% of amount in the account), plus interest. Under the settlement initiative taxpayers will not be assessed tax fraud penalties under IRC Section 6651(f) or IRC Section 6663. These tax fraud penalties 75% of the unpaid tax. In addition the taxpayer would not be liable for the full amount of the FBAR penalties which can equal to 50% of the account balance per year! The IRS has also provided in the example of an individual who's had $1 million in an account earning 5% a year ($50,000),

Contact us at www.taxaid.us or 888 8TaxAid (888-882-9243)

In the case of inherited accounts, or other accounts that the taxpayer did not cause to be opened the penalty may be reduced to 5% if other qualifications are met. This offer is only open to taxpayers who make voluntary disclosures by September 23, 2009. Taxpayers must fully cooperate with the IRS in any civil or criminal investigation in order to take advantage of these terms. Taxpayers can expect detailed questions from the IRS regarding how they came to open their offshore bank accounts, and will be required to name names. We expect that the IRS will use this information to open tax audits of taxpayers who do not come forward. We are currently handling voluntary disclosures under this program and are currently representing UBS clients who had unreported foreign income