IRS Expands Relief for Some Foreign Account Disclosures

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The Internal Revenue Service is making it easier for taxpayers to disclose offshore accounts in cases where they weren't willfully trying to hide the money from U.S. tax authorities, providing streamlined procedures with little to no penalties to more participants.
At the same time, the requirements are getting tougher to enter an offshore voluntary disclosure program (OVDP)—one that offers a set penalty and protection against criminal prosecution. Under changes announced June 18, taxpayers will have to provide much more information at the outset. The current 27.5 percent penalty will rise to 50 percent if the taxpayer's bank, or facilitator who helped the taxpayer establish an offshore arrangement, is under public investigation by the government.
“Our aim is to get people to disclose their accounts, pay the tax they owe, and get right with the government,” IRS Commissioner John Koskinen said in a statement June 18. While the streamlined procedures have been expanded to help taxpayers who may not have been aware of their responsibilities and are not intentionally evading taxes, the agency is still determined to crack down on evasion, he said.