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Voluntary tax program to end soon

On Behalf of | Sep 27, 2018 | IRS Issues

There may be as many as 9 million Americans who are living abroad. Those who have overseas bank accounts of $10,000 or more need to declare them to the IRS. This could also be the case for those living in Georgia or elsewhere in America who have money in overseas accounts. Those who believe that they have run afoul of reporting guidelines may participate in a voluntary disclosure program.

The Offshore Voluntary Disclosure Program (OVDP) is accepting applications until Sept. 28. However, it may be possible to apply for the program past this date as the IRS has indicated that it will remain open for a period of time. Those who choose not to take part in a voluntary program may choose to amend their past returns and risk paying significant penalties. How the IRS treats those who come forward depends on their individual tax situations.

As a general rule, those who have paid taxes despite not reporting overseas accounts may be able to do so without further penalty. Those who have not willfully evaded taxes that haven’t been paid will be able to pay what they owe plus a penalty. Taxpayers who willfully avoided paying could risk going to jail if they don’t participate in OVDP. Participating may result in steep financial penalties but no criminal charges.

Individuals who fail to report income could be subject to a tax lien or other penalties. In many cases, individuals who work in good faith to resolve a tax problem will be allowed to do so without the threat of jail time or having assets taken away. Those who are concerned about an audit or other potentially problematic tax situation may benefit from consulting with an attorney who can negotiate on their behalf with the IRS.