Foreign Reporting

The IRS, Treasury Department and Department of Justice continue to increase reporting requirements regarding foreign taxes and income. Not complying with these reporting requirements can be considered a civil offense by the IRS and a criminal offense by the Justice Department. 

IRS Civil Penalties

The IRS has several forms for reporting the different types of foreign asets and their related income. Depending on your situation, you may be required to file one or more of these forms. IRS civil penalties for not complying with these requirements can be really expensive.

Criminal Charges

The Treasury Department has its own set of forms for reporting foreign assets.  Failure to report foreign assets could result in a prison sentence and substantial penalties. Criminal charges are administered by the Justice Department. 

Offshore Voluntary Disclosure Program (OVDP)

The objective of the OVDP is to bring taxpayers that have used undisclosed foreign accounts and undisclosed foreign entities to avoid or evade tax into compliance with United States tax laws. The presumption is that there was intent to avoid or evade tax if foreign accounts, entities and income have not been reported as required. There is no set deadline for taxpayers to apply for the OVDP. However, the terms of this program could change at any time going forward. For example, the IRS may increase penalties or limit eligibility in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point. Taxpayers with undisclosed foreign accounts or entities take advantage of the OVDP because it enables them to become compliant, avoid substantial civil penalties and generally eliminate the risk of criminal prosecution. Making a voluntary disclosure also provides the opportunity to calculate, with a reasonable degree of certainty, the total cost of resolving all offshore tax issues.

How I can help

I have extensive experience with helping clients meet all of the above filing and reporting requirements. 

I have also represented several clients who have entered the OVDP.  The OVDP requires disclosing and reporting foreign assets and income for up to eight prior tax years.  Amended income tax retuns for those years are generally required as well.