The Internal Revenue Service has given taxpayers an extra 90 days to provide a voluntary disclosure of their offshore bank accounts if they have made a “good faith” attempt to gather the necessary materials.
In an update last Thursday to its Frequently Asked Questions page on the 2011 Offshore Voluntary Disclosure Initiative, a new question asks about what happens if the taxpayer cannot comply by the August 31, 2011, deadline for the latest voluntary disclosure program.
The update expands upon an earlier answer, FAQ 25, describing all of the materials that must be sent to the IRS, including copies of previously filed tax returns and foreign account statements. The update noted, “A taxpayer may request an extension of the deadline to complete his or her submission if the taxpayer can demonstrate a good faith attempt to fully comply with FAQ 25 on or before August 31, 2011. The good faith attempt to fully comply must include the properly completed and signed agreements to extend the period of time to assess tax (including tax penalties) and to assess FBAR penalties.
“Requests for up to a 90 day extension must include a statement of those items that are missing, the reasons why they are not included, and the steps taken to secure them. Requests for extensions must be made in writing and sent to the Austin Campus on or before August 31, 2011:
Internal Revenue Service
3651 S. I H 35 Stop 4301 AUSC
Austin, TX 78741”
Other recent additions to the FAQ page describe what happens if a taxpayer decides to opt out of the civil settlement structure of the Offshore Voluntary Disclosure Initiative.
The IRS has extended the program several times in recent years as it continues to crack down on undisclosed bank accounts in Switzerland, Liechtenstein and other countries. The IRS has been poring over records of thousands of UBS account holders that the Swiss bank was forced to turn over, and has also turned its attention more recently to cases involving HSBC and Credit Suisse.
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