On January 9, the IRS announced that it was yet again reviving its program inviting those with undeclared accounts abroad to declare them, facing heavy penalties for not having filed previously but, in some cases, avoiding even higher penalties. Click here for the Bloomberg News article on this from the New York Times. Note that, as reported by the Associated Press, the IRS says it could "end the new program at any time or change its terms, such as stiffening the penalties. The new program's maximum 27.5% fine is slightly higher than the 25% penalties people faced during the 2011 program."
FAWCO has reported regularly in the past on the IRS initiatives to encourage non-filers to “come in from the cold” (click here for the most recent from August 2011, with some information on who should file and what must be reported), and has consistently recommended consulting a tax professional. The voluntary disclosure programs do not apply equally to everyone, but everyone should know that it will become increasingly difficult and onerous to ignore tax and foreign account filing requirements. We can only strongly recommend reading, consulting and making an informed decision.
As FAWCO has reported in the past, Americans (even those not holding US passports) and green card holders (even those who have not lived in the United States for many years) are taxable under US law and should, above very low amounts, be filing tax returns every year. In addition, anyone with even only signature authority over foreign financial accounts with an aggregate amount in excess of $10,000 on any day in the year must file a Foreign Bank Account Report (FBAR) with the Treasury Department before June 30. Most recently, a new form has been introduced, Form 8938, requiring even more complete reporting of financial assets, to be filed with the IRS along with a tax return. The reporting threshold for Form 8938, for bona fide residents abroad, is significantly higher than for the FBAR. For more information on these IRS filing requirements, click here.
The bottom line is inform yourself and, in today’s world of instant communication, understand that anonymity is really no longer an option.
