• Home
  • News
    • People moves
    • Africa
    • Asia
    • Australia
    • Canada
    • Caribbean
    • Domicile
    • Europe
    • Latin America
    • North America
    • Middle East
    • US
    • US
    • UK
  • Products
    • Funds
    • Pensions
    • Platforms
    • Insurance
    • Investments
    • Private Banking
    • Citizenship
    • Taxation
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Directory
  • Video
  • Advertise with us
  • Directory
  • Events
  • European Fund Selector
  • Newsletters
  • Follow us
    • Twitter
    • LinkedIn
    • Newsletters
  • Advertise with us
  • Directory
  • Events
    • Upcoming events
      event logo
      International Investment Nordic Forum 2021

      International Investment is delighted to announce the 2021 International Investment Nordic Forum which will take place on Tuesday March 9, at 9am (GMT). This curated virtual event will be broadcast live and will feature a series of fund manager interviews and presentations, as well as interviews with some of the Nordic regions top fund selectors.

      • Date: 09 Mar 2021
      • ONLINE, ONLINE
      View all events
  • European Fund Selector
International Investment
International Investment

Sponsored by

Sharing Alpha
  • Home
  • News
  • Products
  • Fintech
  • Regulation
  • ESG
  • Expats
  • In Depth
  • Special Reports
  • Video
  • Taxation

New IRS offshore amnesty regime imposes bigger penalties for secret accounts

New IRS offshore amnesty regime imposes bigger penalties for secret accounts
  • Pedro Gonçalves
  • @PeterHSG
  • 11 December 2018
  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  

The US Internal Revenue Service (IRS) has issued guidance on the voluntary disclosure regime now in force, following the termination of its offshore predecessor on 28 September 2018.

The new rules are effective for all disclosures after that date. And the possible penalties have gone up quite significantly. 

Related articles

  • IRS announces end to offshore voluntary disclosure programme
  • IRS warns of looming deadline for US offshore amnesty
  • IRS targets former users of US offshore disclosure programme
  • US court fines taxpayer $700,000 for offshore disclosure mistake

One of the biggest differences is that the IRS now says taxpayers will be required to request preclearance (which used to be optional).  The criteria for preclearance are unaffected. Therefore, a taxpayer denied preclearance under the old OVDP would probably also be denied preclearance under the new disclosure program.

The OVDP was initiated in 2009 and was designed to bring taxpayers with undisclosed foreign income, accounts and assets into US tax compliance. Taxpayers who were eligible to participate in the OVDP and made timely voluntary disclosures were provided the opportunity to receive protection from criminal referrals and to resolve their civil tax and penalty obligations on a standardized framework.

When that program terminated on September 28, 2018, there was uncertainty as to how the IRS was going to apply its general Internal Revenue Manual ("IRM") voluntary disclosure practice going forward.

The disclosure period is now six years (previously eight years for offshore disclosures). However, IRS agents have the discretion to expand the six-year disclosure period to include all noncompliant years. In addition, taxpayers also may be allowed to expand the disclosure period to correct tax issues in years outside of their disclosure.

As with OVDP, taxpayers must file all required returns and reports for the disclosure period, and pay tax and interest on all previously unreported income.

The civil penalty cost has increased substantially.

The presumed penalty for an underpayment of tax has increased from a 20% accuracy-related penalty to a 75% fraud penalty.

The guidance applies to all voluntary disclosures, offshore or otherwise, received after that date, but is aimed principally at taxpayers with potential criminal exposure from their "wilful or fraudulent" conduct. It gives them a chance to become compliant with the law and potentially avoid criminal prosecution, said the IRS's Deputy Commissioner for Services and Enforcement Kirsten Wielobob. It may also reduce their exposure to civil penalties.

The IRS will not automatically impose penalties for the failure to file information returns. Nonetheless, IRS agents have the discretion to assert these penalties, such as the $10,000 (up to $60,000) penalty for failing to file a return with respect to certain foreign corporations or foreign partnerships.

 

  • Tweet  
  • Facebook  
  • LinkedIn  
  • Send to  
  • Topics
  • Taxation
  • US Internal Revenue Service
  • IRS
  • US
  • Offshore
  • Amnesty
  • Tax

More on Taxation

Report proposes 5% UK wealth tax to offset pandemic costs

  • Taxation
  • 09 December 2020
Britons in France warned of steep capital gains tax rises when selling property

  • Taxation
  • 07 December 2020
HMRC payments to tax evasion whistleblowers up 63%

  • Taxation
  • 04 December 2020
OECD to issue international crypto tax evasion standards next year

  • Cryptocurrencies
  • 04 December 2020
Global tax evasion costs $427bn per year

  • Taxation
  • 04 December 2020
Back to Top

Most read

Duff & Phelps opens Gibraltar office
Duff & Phelps opens Gibraltar office
Brexit deals hefty blow to City but industry is ready to fight back
Brexit deals hefty blow to City but industry is ready to fight back
Comment: Are cryptocurrencies the new gold?
Comment: Are cryptocurrencies the new gold?
FSCS warns industry of £1bn compensation bill
FSCS warns industry of £1bn compensation bill
Dubai regulator to develop cryptocurrency framework
Dubai regulator to develop cryptocurrency framework
  • Contact Us
  • Marketing solutions
  • About Incisive Media
  • Terms and conditions
  • Policies
  • Careers
  • Twitter
  • LinkedIn
  • Newsletters

© Incisive Business Media (IP) Limited, Published by Incisive Business Media Limited, New London House, 172 Drury Lane, London WC2B 5QR, registered in England and Wales with company registration numbers 09177174 & 09178013

Digital publisher of the year
Digital publisher of the year 2010, 2013, 2016 & 2017
Loading