Avoid Criminal Prosecution – IRS Introduces a Six Month Settlement Initiative For those with Unreported Foreign Accounts
On March 23, 2009, the IRS launched the IRS Offshore Incoming Reporting Initiative (the "Initiative"), a settlement for taxpayers to voluntarily disclose of undeclared offshore accounts. The Initiative ends on September 26, 2009, allowing six months for taxpayers to step forward. Those qualified will not be subjected to criminal or civil fraud penalties, but will have to file six years of tax returns and pay all retroactive taxes and interests accumulated.
Packman urges that taxpayers take advantage of the "Initiative" to come forward with any unreported or unfiled foreign accounts. Despite the seemingly harsh penalties, he argues that it is far better than criminal prosecution. Finally, he suggests that if taxpayers do follow through with their disclosure, they should seek legal representation with particular knowledge in this matter.