Voluntary disclosure .pdf
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Title: Important Things You Should Know about Voluntary Disclosure
Content: If you have accounts in foreign countries, it is obvious that you have worries about the IRS
coming after you. Who has not heard stories of people who went to jail because they had offshore
accounts and were ‘obviously evading the taxman’? Before you freak out, you should first familiarize
yourself with what is required of an offshore account holder by the IRS. Below are all the crucial bits you
should be exposed to about voluntary disclosure and especially if you are considering a move in that
direction. You might even be surprised to find out that you were worrying yourself over nothing.
Who are the targets of voluntary disclosure?
This question will help you know whether your worries are valid or not. The Internal Revenue Service
does not go after everyone who has an account offshore. Only those who have more than $ 10000 banked
in foreign countries are eligible for tax payment. To avoid confusion, note that the $ 10000 is a total of
what all your offshore accounts hold and not only one. That is to say that if you have $ 4000 in Europe, $
3000 in Asia and another $ 5000 in an Australian bank, you will be needed to disclose all of these
accounts before the end of a financial year.
If your total is below the sum of $10000, it is not taxable, and you are therefore not needed to disclose
any of your accounts. Important too is to recall that the IRS requires you to report where you have the
financial interest in an account, or you are a signature authority.
Are there time limits to when you should disclose?
Yes. The Internal Revenue Service needs you to have reported your accounts by the end of a financial
year. That is to say that you should have completed your voluntary disclosure procedures by the 30th of
June if your total of your offshore accounts reached $ 10000 in that year. If the IRS has never discovered
your accounts, you should have no worries about disclosing them. Be warned however that you cannot
voluntarily disclose your accounts if the taxation body has already launched tax investigations on you.
This explains why people are urged to be swift in this matters otherwise it will be too late they will
already have landed in trouble.
Can spouses participate in the voluntary disclosure program jointly?
The IRS has a provision that allows spouses to disclose their offshore accounts jointly or separately. If
you and spouse choose to participate in the program as one, you will be required to submit any
information and documents that might be needed. Besides, you will be needed to indicate clearly all
reasons why you chose to make a joint submission. If you opt to participate independently, you will
follow the steps outlined for individual submission.
Why should you consider voluntary disclosure?
Primarily, the IRS has become very vigorous in detecting undisclosed offshore accounts. If detected, you
could face criminal charges and finally suffer substantial loss. Below are some key reasons why you
should participate in the program.
Become compliant with tax laws and regain peace of mind.
Avoid civil penalties related to noncompliance.
You will have the opportunity to calculate the cost of resolving all of your offshore tax issues.
Recall that these costs will be lower than if the IRS detected your accounts in other countries
without you disclosing it to them.
If you are wondering how the IRS detects unreported offshore accounts, it gets the information under tax
treaties and whistleblowers. You can hire an attorney or seek the counsel of a like professional if you still
need details regarding voluntary disclosure. We are lucky because firms like, Chicago Tax Lawyer Firm
are present there to sort out our disclosure-related matters.