The IRS is the last thing you need to deal with when it comes to taxes or with your financial standings. But this latest crackdown has been months in the making with the IRS reaching nearly $10 billion in penalties and fines. The reason why there is a huge crackdown is to remind US taxpayers with undisclosed offshore accounts that they should use existing paths to become compliant and avoid these hefty fines, according to the IRS website.
The latest update on the collection was posted on their website last week. The update states that nearly 56,000 taxpayers have joined the Offshore Voluntary Disclosure Program (OVDP) to resolve their tax obligations. The result was nearly $10 billion in taxes, interest, and penalties since 2009. Another 48,000 taxpayers have made use of separate procedures to correct their undisclosed offshore accounts. These 48,000 taxpayers had to pay $450 million in penalties, interest, and taxes.
This program has so far caught 96,000 delinquent and amended income tax returns. But why is it that the IRS is cracking down on this problem? Well when the market crashed in 2009, many people often avoided or tried to avoid being noticed for having an offshore account. But now that detection is easier thanks to technology and recovering more information internationally of those with offshore accounts. Now some people are paying their fair share of having an offshore account. Yet, the IRS is going even harder on those who refuse to pay for their omission and deception.
Why is it important to pay for taxes? Even if you have offshore accounts? Under the Foreign Account Tax Compliance Act, you have to report what kind of accounts you have and what amount of money you have reserved in your account. If you are a taxpayer, you have to disclose information that may pertain to having business or money outside the United States. Most of the offshore account notifications started with Swiss Banks. The Department of Justice and other governmental departments along with the IRS have begun to inquire on some people who have reported their offshore accounts now than in the past. The first Swiss bank to pay a settlement fee was UBS. This bank’s settlement showed that it helped wealthy Americans evade taxes. Now more Swiss banks are reporting and disclosing American customers who may or may not have an offshore account in their facility to avoid following the same $780 million dollar settlement from UBS. Thanks to the settlement and the information disclosed, the IRS is now pursuing those who have evaded taxes and omitted reporting their accounts to the US government.
Your taxes are important and so is making sure you are cooperating with the government as a citizen of the United States. Thanks to the information, you may need to make sure you don’t get a greeting card from the IRS that could include a ton of monetary charges because you didn’t tell them you had a bank account in Switzerland. If you are interested in knowing more about the crackdown, check out the IRS website and read up on the latest information about what they have uncovered. in the meantime, disclose any financial information you may have to the IRS as a just in case, otherwise you could end up with the 56,000 that had to dish out $10 billion in payments to the IRS.