The IRS announced today a special voluntary disclosure program. For now, I will just link to the announcement here. and provide only the bullet points I see with no (or very limited) editorial comment:
1. The deal is available through 8/31/11. (Note, however, taxpayers must "file" the required amended income tax returns discussed in paragraph 3 below by 8/31/11, so last minute decisions to join the program apparently will not work, particularly in light of the lead time required to obtain documents from foreign banks.)
2. The in lieu of FBAR penalty is 25% of the highest aggregate balance in the foreign account(s) from 2003 to 2010. Some taxpayers will be eligible for lower penalties.
3. Taxpayers must amend all affected income tax returns during the years 2003 - 2011 and pay the resulting taxes, pay either a 20% accuracy related penalty in the case of filed returns or the up to 25% failure to file penalty in the case of unfiled returns, and pay interest on both. These returns must be filed by 8/31/11. Some taxpayers will be eligible for lower penalties.
4. A 12.5% penalty rate will apply if the aggregate balance did not exceed $75,000 in any of the years from 2003-2010. Presumably this lower rate will be both for the in lieu of FBAR penalty and the income tax penalty. There is also mention of a 5% rate in "limited situations."
Additional Information from IRS:
IRS / Shulman Announcement of OVDI Program
2011 OVDI Frequently Asked Questions (pdf)
2011 OVDI Frequently Asked Questions (link to IRS site)
How to Make a Voluntary Disclosure
Voluntary Disclosure Contacts
As Corrected 2/9/11
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