On June 26, the IRS issued IR-2012-65, a plan “to help U.S. citizens residing overseas, including dual citizens, catch up with tax filing obligations and provide assistance for people with foreign retirement plan issues.”
IRS Commissioner Doug Shulman said, "Today we are announcing a series of common-sense steps to help U.S. citizens abroad get current with their tax obligations and resolve pension issues."
Delinquent filers will still have to file back tax returns and FBARs (Foreign Bank Account Reports) but a large majority, who are “low compliance risks” with simple tax returns and who owe little or no tax, will face no “penalties or additional enforcement action.”
We cannot but applaud this effort both to encourage people to come into compliance with the law and to assuage the fears of those wishing to do so but fearing severe financial and criminal consequences.
Click here to see the IRS announcement and here to see the as-yet not-finalized procedures to take effect on September 1, 2012.
