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August 27, 2011

Quiet or Silent Disclosure May Not be Best Way to Go With Respect to Foreign Financial Accounts, Foreign corps, trusts, and partnerships

Forbes Magazine Article Does not recommend that taxpayers try "silent or quiet" disclosure to reveal their offshore bank accounts, financial accounts, foreign corporations, foreign partnerships or foreign trusts. The IRS says they are looking for individuals who are attempting to file past special foreign asset reporting forms and will hit them with the maximum penalties and possible criminal prosecution. Click Here to Read Article.

The IRS has extended the deadline for entering the 2011 Voluntary Offshore Disclosure Program to 9/9/11 from the original deadline of 8/31/11.   This will avoid the possible huge penalties which can be incurred if a taxpayer attempts to silently or quietly disclose.

1 comment:

Michael S. Goode, JD, LL.M. said...

It seems to me, though, that in reading the code so long as you have reasonable cause and have filed everything, even late, then you can still get a waiver of the penalty. For example, if you can show that you reasonable went to a professional and got bad advice, I would think that penalties could be waived, even if the tax returns were not filed on time (especially if there are foreign tax credits that negate the tax). The problem with the OVDI is that there generally is the flat rate of 25% with no negotiation.