If you have:
Offshore bank accounts;
Unreported foreign income;
Foreign corporations you never owned up to; or
Foreign trusts that have money in them; and
Your paperwork wasn’t done correctly, and/or you didn’t pay the tax you should have, then:
This amnesty is for you.
The foreign bank account amnesty closes on September 23, 2009. Go through it, and you’ll clean all of this up. My personal advice is, if you’re in this boat, jump on it. It’s unlikely to get any better anytime soon.
One of the things that will come up if you’re deciding what to do is this: should I just file all my stuff, mail it in to the IRS, cross my fingers and hope for the best? This is called a quiet disclosure. You disclose all your past sins, file the past amended bank account forms, the Form TDF90‑22.1, the Form 5471 if you have a foreign bank account, and the Form 3520 if there’s a trust, etcetera.
What happens if you file, pay the tax, cross your fingers, hope for the best? The answer I get from the FAQ and from talking to special agents at the criminal investigation division and IRS people in the Philly unit, is that these forms are getting plucked out of the pile if you just drop it in the mail, and if they are plucked out of the pile they’re getting sent over to the criminal investigation unit. If you file and if your stuff is picked out of the pile and referred out, you are not eligible for the 20 percent penalty. That’s what the IRS is saying.
So, what you are doing by just dropping this stuff in the mail is rolling the dice and hoping for the best. You’re going to then be in the standard audit procedure, and you’re going to get the penalties thrown at you however the IRS chooses.
Is it worth it? I don’t know. You’ll have to look at your own situation and ask yourself if you feel lucky. I’m telling you that it is unlikely for things just to sail through smoothly. If you need some help and guidance in what to do in a situation like this, or you want us to represent you through the whole voluntary disclosure program or the standard audit procedure, give me a call. My phone number is 626‑689‑0060. Cell number is 626‑437‑2500. West coast, Pacific time. Look forward to hearing from you.
-Phil
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