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Archive for Offshore Disclosures

3 Reasons To Make An Offshore Disclosure

3 Reasons To Make Offshore Disclosure

Disclosing your unreported offshore accounts can give you peace of mind because you no longer have to worry about massive penalties or IRS criminal investigation. There are several reasons to act quickly and take advantage of the current IRS offshore disclosure options.

Key Insights We Will Discuss:
How you can limit your tax penalties by making an offshore disclosure as soon as possible
How the IRS can find out about your foreign bank accounts
Why you should not wait to make an offshore disclosure

An Offshore Disclosure Can Reduce Your Tax Penalties
The penalty for failing to file an FBAR is up to $10,000 per non-willful violation. Willful violations can lead to penalties of up to $100,000 or 50% of your aggregate offshore account balance.
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The IRS Large Business And International Division (LB&I) Announces The Approval Of Six Additional Compliance Campaigns


To date, LB&I has announced a total of 59 campaigns.

The campaigns described below were identified through LB&I data analysis and suggestions from IRS employees. LB&I’s goal is to improve return selection, identify issues representing a risk of non-compliance, and make the greatest use of limited resources. The new campaigns are:

S Corporations Built in Gains Tax

Practice Area: Pass Through Entities

Lead Executive: Holly Paz, Director of Pass Through Entities

C corporations that convert to S corporations are subjected to the Built-in Gains tax (BIG) if they have a net unrealized built-in gain and sell assets within 5 years after the conversion. This tax is assessed to the S corporation. LB&I has found that S corporations are not always paying this tax when they sell the C corporation assets after the conversion. LB&I has developed comprehensive technical content for this campaign that will aid revenue agents as they examine the issue. The goal of this campaign is to increase awareness and compliance with the law as supported by several court decisions. Treatment streams for this campaign will be issue-based examinations, soft letters, and outreach to practitioners.

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United States IRS Penalties For Failure To Make Offshore Disclosures On Revenue Or Earnings

Venar Ayar- IRS Penalties On Offshore Disclosures

According to the IRS, the US loses several billions of dollars every year as a consequence of individuals who either hide or fail to report their offshore revenue or foreign earnings. Offshore tax fraud or tax evasion is a crime if it is determined to have been committed willfully and one can face certain penalties or even jail time as imposed by the IRS. It is important to note that the IRS conducts civil audits to determine whether or not you are hiding your offshore income, revenue and filing false tax liabilities.

The IRS requires individuals with offshore accounts, investments, assets, and income to accurately report them and on time. Failure to do so results in penalties by the IRS which can be quite severe depending on the value hidden from taxation. In recent years the Internal Revenue Service alongside the United States government has prioritized the disclosure of offshore and foreign money and assets. Those that willfully choose not to comply or through ignorance do not do so become penalized in ways unique to their crimes and falsifications respectively.

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