Don"t Gamble When It Comes To OVDI India
So many
people got caught off guard with the recent attention the Internal Revenue Service is giving
holders of offshore bank accounts. With the off-the-shelf deals previously offered, the terms of the
settlement were known and predictable. Now that the 2009 and 2011 offshore voluntary disclosure initiatives (OVDI) have
ended, the Internal Revenue Service has not yet issued a new OVDI, so many non-compliant taxpayers
are wondering if they should come forward and what the cost of coming forward will be. With that in mind, here are the four options currently
available to those wondering what to do.
The first option is to do nothing except hope and pray. The benefit is that it costs nothing to do, and
there is certainly a likelihood of greater than zero, no matter how slight, that the taxpayer
can get away with the crime. The disadvantages are that if discovered, the penalties are severe. In both
monetary cost and in emotional drain of being charged with a federal crime. Even if found
not guilty, a criminal trial is still incredibly costly.
Here's the thing -- every global banking and financial institution must be in the US market or it would become such a small time player that the foreign
bank's shareholders would revolt and replace management --- immediately. Despite everything
you may have heard, the American is still by far the largest economy in the world and every global foreign bank
must be on the good side of the Internal Revenue Service -- otherwise that foreign bank will be shut out of
getting American capital or customers!
Part of being on the good side of the IRS is to
cough up what the Internal Revenue Service says to cough up.
Accordingly the bank is really at the mercy of the Internal Revenue Service….meaning so are the
banks' foreign account holders. So you see, hiding becomes riskier and riskier. And once the Internal Revenue Service starts seeking a criminal
indictment, there is only one option left…pay outrageous taxes and the highest penalties
and face the significant possibility of real jail time.
Option 2: Renounce citizenship; Leave the country. There is only way to escape the jurisdiction of the IRS taxing authority. That is, to renounce one's citizenship and no longer be a American citizen. The process is not as easy
as you may think. Furthermore, a requirement of recognizable expatriation is that
you have to be in compliance with all tax laws and pay an expatriation tax in order to make it official.
If the expatriation is handled
improperly, the Internal Revenue Service treats it as a non-event, meaning you are still subject to the jurisdiction
of the IRS --- indefinitely. Expatriation may make sense to avoid future tax liabilities, but you have to disclose the existence of undisclosed accounts first.
Option 3: Soft (or quiet) disclosure. An option that some taxpayers
attempted is to file amended tax forms 1040X's and mail them to the Internal revenue service just
think "regular" 1040X's, pay the taxes, and hope the IRS won't figure out what was going on.
Doesn't this seems like a fool-proof game-plan? Perhaps one could
avoid all those excessive penalties of the OVDI programs?
The Department of Justice states that it has begun
prosecutions on people who have attempted soft disclosures. So this option has some serious problems
The "soft" disclosure option is incredibly risky for several reasons.
One massive failing is that a soft disclosure does not address the
problem of the taxpayer's failure to report the bank account on the FBAR; as a willful
failure to file an FBAR is a criminal charge. As a
result simply filing a soft disclosure 't go far enough to eradicate any
likelihood of criminal investigations. In fact, the amended return may --- well
here's the massive problem with this alternative --- the soft disclosure
does nothing about the failure to FBAR forms. There are still criminal and civil
investigations that may be pending for failing to file an FBAR, but simply give the IRS a
very handy to locate you.
Option 4: Pre-emptive Disclosure and Negotiation (" Offshore Voluntary Disclosure Initiative") If enjoying the rest of your life is chief concern, there can be
no doubt that this is the best option. Yes, the 2011 initiative expired, but that does not
mean a voluntary disclosure can not be filed. The IRS always welcomes offshore disclosures. The
only thing that expired was the particular provisions of
the 2011 OVDI which capped certain penalties.
There are only 2 requirements. First, the taxpayer can not be under audit. Also, the source of the money in the
foreign bank accounts can not be from an illegal source. Think drug trafficking or money laundering.
If someone is still wondering what the proper course of action
is, it is critical that they only talk to a qualified offshore tax
law firm. The attorney-client privilege only applies when speaking to an
lawyer. The IRS can subpoena a CPA or nearly anyone else to give
evidence against a taxpayer.
Think this article concerning OVDI India - is educational? Obtain added news regarding OVDI India [http://www.irsmedic.com/] from an expert that has learned the Internal Revenue Service. All of us ought to be properly well-advised & my Blog will aid you to definitely put together an well-versed decision.
people got caught off guard with the recent attention the Internal Revenue Service is giving
holders of offshore bank accounts. With the off-the-shelf deals previously offered, the terms of the
settlement were known and predictable. Now that the 2009 and 2011 offshore voluntary disclosure initiatives (OVDI) have
ended, the Internal Revenue Service has not yet issued a new OVDI, so many non-compliant taxpayers
are wondering if they should come forward and what the cost of coming forward will be. With that in mind, here are the four options currently
available to those wondering what to do.
The first option is to do nothing except hope and pray. The benefit is that it costs nothing to do, and
there is certainly a likelihood of greater than zero, no matter how slight, that the taxpayer
can get away with the crime. The disadvantages are that if discovered, the penalties are severe. In both
monetary cost and in emotional drain of being charged with a federal crime. Even if found
not guilty, a criminal trial is still incredibly costly.
Here's the thing -- every global banking and financial institution must be in the US market or it would become such a small time player that the foreign
bank's shareholders would revolt and replace management --- immediately. Despite everything
you may have heard, the American is still by far the largest economy in the world and every global foreign bank
must be on the good side of the Internal Revenue Service -- otherwise that foreign bank will be shut out of
getting American capital or customers!
Part of being on the good side of the IRS is to
cough up what the Internal Revenue Service says to cough up.
Accordingly the bank is really at the mercy of the Internal Revenue Service….meaning so are the
banks' foreign account holders. So you see, hiding becomes riskier and riskier. And once the Internal Revenue Service starts seeking a criminal
indictment, there is only one option left…pay outrageous taxes and the highest penalties
and face the significant possibility of real jail time.
Option 2: Renounce citizenship; Leave the country. There is only way to escape the jurisdiction of the IRS taxing authority. That is, to renounce one's citizenship and no longer be a American citizen. The process is not as easy
as you may think. Furthermore, a requirement of recognizable expatriation is that
you have to be in compliance with all tax laws and pay an expatriation tax in order to make it official.
If the expatriation is handled
improperly, the Internal Revenue Service treats it as a non-event, meaning you are still subject to the jurisdiction
of the IRS --- indefinitely. Expatriation may make sense to avoid future tax liabilities, but you have to disclose the existence of undisclosed accounts first.
Option 3: Soft (or quiet) disclosure. An option that some taxpayers
attempted is to file amended tax forms 1040X's and mail them to the Internal revenue service just
think "regular" 1040X's, pay the taxes, and hope the IRS won't figure out what was going on.
Doesn't this seems like a fool-proof game-plan? Perhaps one could
avoid all those excessive penalties of the OVDI programs?
The Department of Justice states that it has begun
prosecutions on people who have attempted soft disclosures. So this option has some serious problems
The "soft" disclosure option is incredibly risky for several reasons.
One massive failing is that a soft disclosure does not address the
problem of the taxpayer's failure to report the bank account on the FBAR; as a willful
failure to file an FBAR is a criminal charge. As a
result simply filing a soft disclosure 't go far enough to eradicate any
likelihood of criminal investigations. In fact, the amended return may --- well
here's the massive problem with this alternative --- the soft disclosure
does nothing about the failure to FBAR forms. There are still criminal and civil
investigations that may be pending for failing to file an FBAR, but simply give the IRS a
very handy to locate you.
Option 4: Pre-emptive Disclosure and Negotiation (" Offshore Voluntary Disclosure Initiative") If enjoying the rest of your life is chief concern, there can be
no doubt that this is the best option. Yes, the 2011 initiative expired, but that does not
mean a voluntary disclosure can not be filed. The IRS always welcomes offshore disclosures. The
only thing that expired was the particular provisions of
the 2011 OVDI which capped certain penalties.
There are only 2 requirements. First, the taxpayer can not be under audit. Also, the source of the money in the
foreign bank accounts can not be from an illegal source. Think drug trafficking or money laundering.
If someone is still wondering what the proper course of action
is, it is critical that they only talk to a qualified offshore tax
law firm. The attorney-client privilege only applies when speaking to an
lawyer. The IRS can subpoena a CPA or nearly anyone else to give
evidence against a taxpayer.
Think this article concerning OVDI India - is educational? Obtain added news regarding OVDI India [http://www.irsmedic.com/] from an expert that has learned the Internal Revenue Service. All of us ought to be properly well-advised & my Blog will aid you to definitely put together an well-versed decision.
Source...