Deadline looming – Miss it at your own expense
By Don D. Nelson, Attorney, CPA. / Oct 09 • Categorized as Asset Protection •
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NOTICE TO ALL EXPATRIATES OR U.S. TAXPAYERS WITH OFFSHORE INVESTMENT, BANK, CORPORATE, TRUST, LLC OR BUSINESS INTEREST
THE IRS OFFSHORE VOLUNTARY DISCLOSURE PROGRAM’S DEADLINE TO PARTICIPATE ENDS ON THE EXTENDED DEADLINE OF 10/25/09
If you wish to participate in this program in order to reduce possible interest and very high penalties for not reporting foreign income, foreign corporations, foreign investment or bank accounts, foreign trusts, (fideicomisos in Mexico), foreign partnerships, investment companies or LLCs, you must act now and send the required letter to the IRS by the deadline extended date of October 15, 2009. The returns and/or appropriate forms can then be prepared and filed afterwards. But they cannot be submitted after the deadline without the required letter being submitted by the deadline – no extensions will be available.
Read more about the program and all of its details at http://www.taxmeless.com/IRS%20Disclosure.htm . You can then determine if this program applies to your particular situation. This web page lists the 52 questions which explain most aspects of the program and how to send a letter if you wish to participate by the deadline. If you do have undisclosed income and have not filed the Offshore IRS forms (some of which are listed below) the IRS will limit your penalties to 20% of the highest value of your offshore assets during any one of the six year period plus taxes, interest and the 20% negligence penalty.
If you reported all foreign income, business income, interest, etc on your tax return, or if the offshore activity produced no income, but you failed to file the required forms (some of which are listed below) you must file those forms before 10/15/09 with your personal tax returns for those years showing that income was reported or risk possible large penalties. If you follow the procedure set forth in the 52 questions listed above you can avoid any of the huge penalties which are often attached to those forms.
Just a few of the IRS forms which you may not have filed but should file now include 5471 (foreign corporation ownership), 3520 and 3520A ( foreign trusts or Mexican Fideicomisos), TDF 90-22.1 (foreign bank and financial account report), 8865 (foreign partnership), Form 926 (contribution of capital to a foreign corporation), 8621 (Return of Passive Foreign Investment Company, and others too numerous to mention. Most of these are listed in the 52 FAQ on the program which can be reviewed at the link listed above or at the IRS website at http://www.irs.gov/newsroom/article/0,,id=206012,00.html
The IRS has stated that those who fail to participate and later attempt to amend returns to report unreported foreign income that involve the listed forms which were not timely filed will be assessed the penalty that is associated with such a late filed form -which can be $10,000 or more per year depending on the form.
The IRS has now also stated that taxpayers who in the past years have attempted to catch up and file past due returns that involve offshore income and the forms listed in the 52 questions should also enter the voluntary disclosure program to limit their penalties, or risk the even greater penalties the IRS can impose for late filing those forms, which are stated in the instructions to such forms. The IRS has indicated they plan to go back and locate those people who have attempted “private disclosure” and assess those penalties. How many years back they will look has not been disclosed by the IRS.
This is only intended for expatriates or those who have lived abroad now or in the past and for those US taxpayers that have owned interests in a foreign corporation, foreign trust, Mexican fideicomiso, offshore bank or any investment account located outside the USA or if they participated in a partnership, investment company or LLC not incorporated in the USA.. If you are not sure whether you are someone who should participate in the Offshore Voluntary Program you should read all about it at this following website link: http://www.irs.gov/newsroom/article/0,,id=206012,00.html
Don D. Nelson, Attorney, C.P.A.
Dana Point, California, USA
Phone 949-481-4094
Fax 949-218-6483
Email: dondnelson@yahoo.com
Website: www.taxmeless.com
