Sept. 23, 2009, is the last day for taxpayers to take advantage of the Internal Revenue Service’s reduced penalty framework associated with the IRS’ voluntary disclosure program for undisclosed offshore accounts.
Under the current framework, which is scheduled to expire after Sept. 23, 2009, taxpayers who qualify for the voluntary disclosure program can limit the tax penalties associated with an offshore account to 20 percent of the unpaid tax for the past six years. The current framework also enables taxpayers to limit other reporting penalties (for example, for failure to file a Report of Foreign Bank and Financial Accounts) to 20 percent of the highest aggregate account value over the past six years.
After Sept. 23, 2009, qualifying taxpayers still will be able participate in the IRS’ voluntary disclosure program, but the penalties associated with offshore accounts will likely be much steeper.
For additional information see New Deadlines for Filing Foreign Account Reports