From the Tax Law Offices of David W. Klasing - What's the Best Way to Fix Your Offshore Tax and Information Reporting Noncompliance?

IRVINE, Calif., March 3, 2020 /PRNewswire/ -- You have the following options for dealing with offshore noncompliance.

• Take no action: where you hope the IRS will ignore or not discover your noncompliance.
• Comply going forward: where you begin complying with the FBAR, foreign information and income tax reporting requirements going forward.
• Quiet disclosure: where you amend your past returns to report the previously unreported foreign taxable income and omit foreign information reporting to attempt to avoid strict liability reporting penalties.

Note:  Don't let anyone sell you on one of the first three options above or you could face criminal tax prosecution.

• Delinquent foreign information reporting: where you file the delinquent foreign information returns and supply a penalty abatement letter explaining your reasonable cause to attempt to excuse your failure to file. This is only available where absolutely no taxable offshore income was omitted from the original tax returns. 
• Streamlined voluntary disclosure: where the taxpayer that acted negligently and without criminal intent amends three years of income tax returns to pick up previously unreported offshore taxable income and pay the additional tax and interest due.  They are required to supply six years of delinquent foreign information returns. They pay up to a 5% penalty on the tax year with the highest fair market value of previously unreported offshore financial accounts and income generating assets.  
• Voluntary Disclosure Practice (VDP): where the taxpayer that originally acted with criminal intent earns a pass on criminal prosecution by strictly complying with the VDP program terms. They are required to amend six years of income tax returns to pick up previously evaded offshore taxable income and pay the additional tax and interest due.  They are required to supply six years of delinquent foreign information returns. They pay a mandatory 75% fraud penalty on the tax year that generates the highest amount of amended additional income tax and a 50% penalty on the tax year with the highest combined fair market value of previously unreported offshore financial accounts and evaded taxable income generating assets.  
• See an international tax attorney to determine which option is right for you!

See the full version of this article HERE.
Public Contact: Dave Klasing Esq. M.S.-Tax CPA, [email protected]

SOURCE Tax Law Offices of David W. Klasing, PC