February 29. 2012 | Lindsay Dattilio
Here We Go Again!
The IRS has reopened the Offshore Voluntary Disclosure Program, a measure designed to encourage taxpayers to report their previous unreported worldwide income, following the collection of over $4.4 billion from the original programs initiated in 2009 and 2011. The IRS says there is no deadline this time, as the program will remain open indefinitely. With that said, the IRS could abruptly change the provisions of the program, if not end it altogether, at any time. The only other key difference announced is an increase in the maximum penalty applied to the highest aggregate value of all undisclosed foreign accounts and/or the highest asset balance of all undisclosed foreign entities, which was previously 25 percent. The IRS has boosted the maximum penalty up to 27.5 percent.
Speaking of disclosure, the IRS has announced a new form for the 2011 tax year, Form 8938, Statement of Specified Foreign Financial Assets. This new form requires taxpayers to report the fair market value of all foreign financial assets, if over a certain threshold, to be attached to their income tax return; but more on that later.
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