EisnerAmper has formed an Offshore Voluntary Disclosure Initiative program to help taxpayers comply with the recent U.S. Treasury initiative focused on foreign bank account reporting requirements.
"Our goal as advisors is to help taxpayers take advantage of the opportunity the ODVI program now provides so they will be in full compliance with Treasury regulations," said Timothy Speiss, partner-in-charge of EisnerAmper's Personal Wealth Advisors Practice.
In February, the U.S. Treasury Department issued updated rules regarding required recordkeeping and reports ("Report of Foreign Bank Accounts" or "FBARs") that must be filed by affected U.S. citizens or resident individual taxpayers (including trusts, partnerships, LLCs, corporations, and other entities) that own or control financial accounts in foreign countries where the account value exceeds $10,000 (see IRS Opens New Voluntary Disclosure Program). The updated Treasury rules cover calendar years 2003 to 2010. Voluntary participation in the Treasury initiative is open through Aug. 31, 2011.
Under the Treasury regulations, affected taxpayers and potential participants in the Treasury's initiative are those who have not filed FBAR reports, and/or who have not reported income from foreign bank and investment accounts in prior years.
Under the Treasury initiative, participating taxpayers must pay all delinquent income taxes and interest for the calendar years 2003 through 2010, and pay delinquency penalties and other penalties. Additionally, participants must pay an offshore penalty of 25 percent of the highest aggregate account balance in the taxpayer's foreign bank accounts during the years 2003 through 2010.
“The updated Treasury rules provide qualifying taxpayers a voluntary disclosure program that helps protect against the risk of additional significant IRS penalties and criminal sanctions due to not complying with FBAR reporting and tax payments attributable to prior years,” said EisnerAmper international tax partner Jack Meola.
EisnerAmper's Task Force includes international tax specialists who assist affected taxpayers in the complicated process that is required to compile applicable foreign bank account information, and translate foreign currency amounts into U.S. dollars using customized technology. Adding to the complexity is the need to prepare foreign bank account reports and amended federal income tax returns for prior years, and calculating the applicable income tax, interest, and penalties due to properly comply with the Treasury Program initiative.
“Complying with the updated rules and voluntary disclosure program is complex and affected taxpayers should obtain advice from tax advisors who have proper experience with FBAR reporting rules,” said EisnerAmper international tax partner Brent Lipschultz.
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