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July 17, 2013

GAO: Foreign account “quiet disclosures” may be much higher than detected

Quite disclosure is when taxpayers with previously unreported foreign bank or financial accounts file amended returns to report the income and file the required FBAR forms (TDF 90-22.1) without going through the several formal IRS offshore disclosure programs.  The IRS does not approve of silent disclosure and has threatened to seek penalties against all taxpayers who try that method of filing past FBAR forms.  The Government Accounting Office has release a report which can be read below about the large number of quiet disclosures that have not yet been discovered by the IRS.

GAO: Foreign account “quiet disclosures” may be much higher than detected

2 comments:

Anonymous said...

As an American living abroad, I was horrified to read the GAO report, with its suggestion of more fines and penalties on Americans overseas.

I am totally compliant and have always been, but I know many people who have never filed FBAR forms and who are terrified of the possible financial and even criminal consequences, not only on themselves but on their entire family abroad.

I do think we should keep in mind that the voluntary disclosure program was designed particularly for people living in the US and hiding accounts overseas. These are true tax cheats. They KNOW that they must file FBARs for overseas accounts and yet they choose not to do so.

This is NOT the case of Americans overseas, who simply have normal bank accounts where they live, and who most of the time don't even owe taxes to the United States, since they pay their taxes in their country of residence.

So if we read this GAO report with some common sense (admittedly in short supply right now in certain circles), we can hope that the IRS wants to crack down on RESIDENTS of the US who try quiet disclosure of FBARs, but will not crack down on OVERSEAS Americans who simply start filing FBARs and who do not owe any taxes to the US. Particularly since some US citizens living abroad have fought back against totally punitive and unreasonable fines and penalties for failure to file, and have won.

And yes, I'm a natural optimist...

Thorsten said...

Great!