It is important to note, this is the first time that the IRS has granted an open-ended amnesty on tax payments resulting to offshore deposits.
The IRS’s writings on dealing with tangible assets reads as follows:
“The penalty applies to all assets directly owned by the taxpayer, including financial accounts holding cash, securities or other custodial assets; tangible assets such as real estate or art; and intangible assets such as patents or stock or other investments in a U.S. or foreign business if the assets were acquired with funds that evaded the payment of U.S. taxes. Whether such assets are indirectly held or controlled by the taxpayer through an entity alter ego, the penalty may be applied to the taxpayer’s interest in the entity or, if the Service determines the entity is an alter ego or nominee to the taxpayer’s interest in the underlying assets.”The other thing that they make firm about the voluntary compliance program is that there is really no deviation from it. There isn’t a lot of room for hardship. There isn’t a lot of room for inequalities to be pled. There is very, very little discretion in this. The taxpayers can take an appeal.
Also under another interesting twist, the IRS will under no circumstances collect a higher penalty than if under all of the other rules the penalty would be lower. They give some very good examples of it. I want to make you aware of the best guidance that one can get out of this while we’re talking about this. If you go to irs.gov, they publish a list of questions. Those questions deal with the amnesty program. They will be very helpful. There are two places where the bank deposit penalty will be lowered.
Richard S. Lehman Esq., has produced a video presentation about the New IRS Amnesty and two other new that many are not aware of yet. The new Foreign Account Tax Compliance Act (the FATCA), and Foreign Financial Institution Reporting on Americans. This presentation and all resources on this topic are available to everyone. View presentation now.
