IRS to Announce Another Voluntary Disclosure Program for Taxpayers with Undeclared Foreign Accounts

WASHINGTON, Jan. 24, 2011 /PRNewswire/ -- Over the weekend, the Internal Revenue Service announced that it intends to authorize another voluntary disclosure program for taxpayers with undeclared foreign accounts. The last program ran from March 26, 2009 through October 15, 2009. "What these more formalized programs provide are benchmarks for the level of civil penalties that will be imposed, but taxpayers can make a voluntary disclosure of unreported income at any time," said Jim Mastracchio, a Partner with Baker Hostetler. Failure to report income from foreign accounts can carry stiff civil penalties and potential criminal sanctions. The IRS estimates that over 3,000 taxpayers have made voluntary disclosures since the close of the prior settlement program. "It is likely that anyone who made a voluntary disclosure since the end of the prior program will be eligible for the civil penalty ranges that will be announced as part of the new initiative," Mr. Mastracchio added.

The IRS has increased its scrutiny of foreign account reporting since the U.S. government became aware of unreported income arising from accounts held at UBS, a Swiss based banking institution. Investigations of other foreign banks may be ongoing. "If you have an unreported account, or an unfiled FBAR, I would not wait for the next formal program to seek advice about a voluntary disclosure," said Mr. Mastracchio who represents individuals now facing criminal charges relating to off-shore accounts. The IRS has reported that nearly 15,000 taxpayers participated in the first settlement program and several taxpayers have entered guilty pleas to criminal charges arising from undeclared accounts. Mr. Mastracchio Co-Chair's Baker Hostetler's nationwide tax controversy practice and is head of the firm's Washington, D.C. tax practice. For questions regarding voluntary disclosures and other tax matters, you can reach Mr. Mastracchio at (202) 861-1650 or [email protected].

About Baker Hostetler

Founded in 1916, Baker Hostetler is among the nation's 100 largest law firms with 700 attorneys coast to coast, delivering the highest quality legal counsel on the most complex and critical issues facing clients today. The firm has offices in Chicago, Cincinnati, Cleveland, Columbus, Costa Mesa, Denver, Houston, Los Angeles, New York, Orlando and Washington, D.C. Its five primary practice groups are Business, Employment, Intellectual Property, Litigation and Tax. For more information, please visit www.bakerlaw.com.

SOURCE Baker Hostetler