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Probably not ... and if it is, you might not be a client of mine for much longer. The Treasury Department requires taxpayers to file annual reports declaring their interest in foreign bank, investment, and trust accounts. Failure to file these reports causes you to be exposed to a potential penalty of $10,000 to $100,000.
If you have appropriately reported the income generated by these overseas funds, than you may be eligible for amnesty from these penalties. If you didn't, you will be required to amend your tax returns (back to 2002), file, and pay the taxes, interest and penalties that arise from the amendments. You can file the forms late, and may be eligible for amnesty.
Why do I bring this up? UBS has announced that it will be soon informing 4,450 account holders that it has released their information to the US Department of the Treasury. Claiming privacy, UBS (who already turned the information over to the IRS) was refusing to notify its clients if they were included. Two accountholders sued in Swiss Court which sided with the accountholders.
The IRS will likely see any failure to comply with this amnesty program as means to begin criminal tax evasion proceedings. If you're in this situation, it would behoove you to find an attorney.
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Aaron Blau, E.A. is the Vice President of the Central Arizona Chapter of Enrolled Agents and a member of the Government Relations Committee of the National Association of Enrolled Agents. The opinions and ideas expressed here are in no way representative of the official position of the National Association of Enrolled Agents, Arizona Society of Enrolled Agents or the Central Arizona Chapter of Enrolled Agents.
For official comments, please e-mail NAEA Director of Communications at mlockwood@naea.org or Arizona Society president stefaniecampbell@aztaxpros.org.
IRS CIRCULAR 230 DISCLOSURE:
"To ensure compliance with the requirements imposed by the IRS, we inform you that, to the extent this communication (or any attachment) addresses any tax matter, it was not written to be (and may not be) relied upon to (i) avoid tax-related penalties imposed under the Internal Revenue Code, or (ii) promote, market or recommend to another party any transaction or matter addressed herein (or in any such attachment). In addition, nothing herein is intended to convey an expression of an opinion as to the likelihood a tax position would ultimately prevail if challenged by the IRS. This communication is intended solely for the person to whom it is addressed; no one else should rely on the tax advice provided herein. The person to whom this advice is addressed is under no obligation to keep the advice or matters related to the advice confidential."
For official comments, please e-mail NAEA Director of Communications at mlockwood@naea.org or Arizona Society president stefaniecampbell@aztaxpros.org.
IRS CIRCULAR 230 DISCLOSURE:
"To ensure compliance with the requirements imposed by the IRS, we inform you that, to the extent this communication (or any attachment) addresses any tax matter, it was not written to be (and may not be) relied upon to (i) avoid tax-related penalties imposed under the Internal Revenue Code, or (ii) promote, market or recommend to another party any transaction or matter addressed herein (or in any such attachment). In addition, nothing herein is intended to convey an expression of an opinion as to the likelihood a tax position would ultimately prevail if challenged by the IRS. This communication is intended solely for the person to whom it is addressed; no one else should rely on the tax advice provided herein. The person to whom this advice is addressed is under no obligation to keep the advice or matters related to the advice confidential."
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