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Foreign Income and Reporting

 

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Have you heard about the Offshore Voluntary Disclosure Initiative the IRS is currently offering?  If you are like most people with accounts or income outside of the United States you are either unaware or afraid of volunteering this information.  This is the second initiative by the IRS to encourage people to voluntarily report income from outside of the United States.  The penalties for not disclosing offshore income are quite severe and may include criminal penalties as well.  The deadline for filing this information is August 31, 2011.

Also, even if you have an account offshore that does not generate income it still may be reportable to the United States Treasury if the value of the account exceeds $10,000 at any time throughout the year.  This information can be reported to the IRS by utilizing form TD F 90-22.1 or Report of Foreign Bank and Financial Accounts.  The deadline for this form is June 30 for the previous calendar year. 

As the United States continues to enter into Tax Treaties with foreign countries a key provision is the sharing of taxpayer information.  This information will be used to detect those United States taxpayers who are trying to avoid paying taxes. 

If you have questions about either of these topics please contact our office to assist you in this matter.

Thank you,

Jeff

 

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