- IRS Announces It Is Reopening the Offshore Voluntary Disclosure Program
- February 6, 2012
- Law Firm: Proskauer Rose LLP - New York Office
The IRS announced it is reopening the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes.
Unlike the 2009 and 2011 programs, the 2012 program will remain open for an indefinite period of time. The terms of the program, however, may change at any point in the future. For example, penalties may increase. Currently, individuals pay a penalty of 27.5% of the highest aggregate balance in foreign bank accounts and entities or value of the foreign assets during the 8 full tax years prior to the disclosure. This is an increase from the 25% penalty in 2011. Lower rates apply for offshore accounts or assets that are valued at less than $75,000.
Remember: There is nothing unlawful about having offshore bank accounts so long as they are listed on the account holder's tax returns and on a separate Reports of Foreign Bank and Financial Accounts ("FBARs") disclosing the existence and size of the accounts.