Posts Tagged ‘OVDI’

Tax Roundup, 10/1/2013: Shutdown edition. And two weeks left for 2012 1040s!

Tuesday, October 1st, 2013 by Joe Kristan

Extended 1040s are due two weeks from today! Sorry for not posting yesterday, but I’m sure many of you understand.  I was laying in canned goods and ammo for the government shutdown.

Wikipedia image courtesy Tallent Show under Creative Commons license

Wikipedia image courtesy Tallent Show under Creative Commons license

The TaxProf has the IRS Shutdown Plan.  You can still file, but the examiners get a day off.

I like Don Boudreaux’s take:

 If I walk into a supermarket to buy a few artichokes and discover that the supermarket has no artichokes for sale that day, I don’t pay the supermarket for the artichokes that I don’t get.  So shouldn’t we taxpayers be relieved of the obligation to pay for the national-government services that we are not now receiving?

It implies the big difference between things we get from businesses and things we get from the government:  if we don’t like what they have at one store, we can go to another, but if we don’t like the service from Uncle Sam’s Essentials, we can’t exactly take our business elsewhere.


Andrew Lundeen and Kyle Pomerleau explain What Happens When There Is a Government Shutdown (Tax Policy Blog):

From 1976 to present there have been 17 shutdowns and like this shutdown, many were caused by political disagreement. For instance, the government shutdown for 12 days in 1977 over a political fight between the House and the Senate over Medicaid policy.

The average length of past government shutdowns is 6.4 days, but this is no indication of how long this shutdown will last. During the Reagan administration there were several shutdowns that only lasted one day.

So either it’s not the end of the world, or the world ends a lot.

Glass half-full: Shutdown Will Stop IRS Audits, but Not ACA Implementation (Jeremy Scott, Tax Analysts Blog)

TaxGrrrl, With Shutdown, Taxes Still Due But You Can’t Ask IRS For Help   

Janet Novack,  Federal Government Begins First Shutdown In 17 Years 

Kay Bell, IRS lays out plan to deal with federal government shutdown


William Perez,  IRA Recharacterizations Due by October 15th:

“Recharacterizing” means, quite simply, we can change the character of the IRA: if the contribution was made to a traditional IRA, we can re-characterize it to a Roth IRA; and if the contribution was made to a Roth IRA, it can be recharacterized to a traditional IRA.


tax fairyTrish McIntire, It’s Here…

The Health Insurance Marketplace (HIM) opened today! The Affordable Care Act (ACA) mandates that almost everyone must have health insurance by January 1, 2014. The HIM is a way for anyone not covered by an employer’s affordable plan to shop for health insurance. Let’s face it the ACA is complicated and the HIM part is no exception. This post will cover the highlights of the Marketplaces to give you an overview of what will happen.

The Health Care Fairy is  the Tax Fairy’s sister.  Believers in either one end up disappointed.


Missouri Tax Guy, How To Write Off Travel Expenses As Business Expenses.  ”You can’t go on a one-day business trip and stretch it into a week of sightseeing, and then deduct anything as business-related.”

Point, counterpoint:

4 Reasons the Medical Device Tax is Bad Policy (Kyle Pomerleau, Tax Policy Blog)

The Medical Device Tax Should Not Be Repealed (Tax Justice Blog):

One argument made by the industry against the medical device excise tax is that it singles them out for higher taxes. The reality, however, is that the excise tax was passed as one of many levies on various healthcare sectors to help pay for health insurance expansion. 

That apparently would include the 10% excise tax on tanning booths that is part of Obamacare financing.  They say the tax is paid by something called “various healthcare sectors.”  That’s a fancy way to say “patients.”


Jack Townsend, Zwerner Rises to Defense Against Multiple FBAR Penalties:

Readers will recall that, in an unexpected development, Treasury assessed and DOJ Tax sued to collect the 50% FBAR penalty against Carl Zwerner for four years.  Up to that point, based on the information publicly available (principally from offshore account plea convictions), Treasury had only assessed a single FBAR of 50% for the highest year.  Thus, it was of considerable interest — and angst — to taxpayers and practitioners that Treasury would assert 4 years of FBAR penalties.

That could get expensive.

Brian Mahany,  FBAR, FATCA Are Not Dirty Words!  They can certainly trigger some, though.


Consolation prizes: Attorney Found Guilty of 28 Tax Charges, but Does Get Nomination for Tax Offender of the Year (Russ Fox)

Peter Reilly,  Has Kent Hovind Given Up Fight Against IRS ?   Mr. Hovind is famous for opening a theme park based on the idea that humans and dinosaurs co-existed.  I suppose if you hang around politicians, you could conclude that.

Robert D. Flach is Buzzing the government shutdown.


Nothing is stopping you from writing a check right now, says a cynical tax blogger.   “Tax Us More!” Say Some Wealthy Pennsylvanians (Jim Maule) Because they can pay more taxes any time they want, they really mean “tax other people more.”


Career Corner: Ex-PwC Employee Discovers Just How Limiting a Career-Limiting Move Supporting Terrorism Can Be.  (Going Concern)  I worked there when I was a very green new accountant, and I was frequently terrified.



The saga of Canada Cruz.

Wednesday, August 21st, 2013 by Joe Kristan


cruzTed Cruz is lucky it wasn’t the other way around.  The Texas Senator recently learned that he is an accidental Canadian citizen because he was born in Calgary.  His American mom moved back to the U.S. when he was four and the Senator apparently never considered himself a Great White Northian.

Now he plans to “renounce” his Canadianhood, presumably to make his political life easier.  That’s fine for him, but I hope he ponders just how lucky he is that his life didn’t go the other way.  If Ted Cruz’s mom were a Canadian who brought him into the world in Fargo, and then moved him as a toddler back to Canada, he would be up to his toque in problems with the IRS.

Assume our alternate-world Ted Cruz – we’ll call him Canada Cruz — had become a successful Canadian lawyer and politician.  Given his $3.5 million net worth, he certainly would have opened substantial bank and brokerage accounts in Canada.  He would have significant retirement plan assets.  And, like many accidental Americans, it would probably never have occurred to him that his American citizenship obligated him to file FBAR reports and U.S. tax returns reporting his Canadian income.

The Treasury might claim half the balance of his financial accounts for each year he failed to file Form TD F 90-22.1 – or a mere $10,000 per year if they decided his violation wasn’t “willful.”    If he attempted to participate in the OVDI “amnesty” program to clean things up, he would probably be told to cough up “only” 25% of the balances in all of his Canadian accounts, and to file US returns paying tax on “all tax years” covered by the disclosure.   Assuming $3 million of his $3.5 million net worth represents financial assets, Canada Cruz would have to fork over at least $750,000 as a result of being an accidental American.  Just in case you wonder why people might renounce U.S. citizenship.

Tax Professor Allison Christians explains (via TaxProf):

US citizens abroad now understand that discovering ties to the US means discovering a world of obligations and consequences flowing from citizenship that you were expected to know and obey. Ignorance of the law being no excuse, the punishments range from the merely ridiculous–many times any tax that would have ever been due–to the infuriating: life savings wiped out and many future tax savings sponsored by your home government, such as in education or health savings plans, treated as offshore trusts and therefore confiscated by the US. Moreover there is no ready escape hatch for the newly discovered and unwanted US citizenship: five years of full tax reporting compliance must be documented, appointments must be made with officials, fees must be remitted, interviews must be conducted, and in some cases exit taxes must be paid. If some in Congress get their way, renunciation could even mean life-time banishment from the US someday soon.

If U.S. politicians had any sense of shame or capacity for introspection, they would take heed of Canada Cruz’s problems and stop U.S. tax law at the border.  A humane and sensible IRS would create an easy way for accidental citizens to come into compliance short of financial ruin.  As it is, Canada Cruz is just screwed.



But how can we slap money launderers on the wrist if we don’t throw the book at widows?

Friday, April 26th, 2013 by Joe Kristan

20130426-1Absolutely stunning and wonderful news out of Florida in a highly-publicized offshore account case.  From the Palm Beach Daily News:

U.S. District Judge Kenneth Ryskamp sentenced Mary Estelle Curran of Palm Beach to one year probation Thursday on tax charges, before revoking the sentence five seconds later and sending her out of the courtroom a free woman.

Ryskamp chastised the government for prosecuting the 79-year-old woman when 38,000 other people in the same situation were given immunity.

The woman had inherited Swiss bank accounts from her wealthy husband.  Her lawyer had tried to get her into the offshore disclosure program, but the IRS turned her down because her name was on a list provided by Swiss bank UBS.  She pleaded guilty to two false return charges.  The judge blasted the government for bringing criminal charges:

Based on these facts, did it ever occur to the government to dismiss these charges,” Ryskamp said. “Instead, the government decided it had to make a felon out of this woman?”

That’s been the IRS approach to offshore accounts all along.  The IRS has done a terrible job distinguishing the bad guys from inadvertent violators, hitting people who have come forward with accidental violations with ridiculous penalties, rather than welcoming them into compliance — while often letting bigger fish swim away.  But the government had no apologies to offer:

Mark Daly, from the Department of Justice Tax Division, told Ryskamp that Curran’s husband, Mortimer, was a “very wealthy man” and shouldn’t have turned to a foreign national for an interpretation of U.S. Law.”

Mortimer is beyond the prosecutors’ reach, so burn the widow!  In addition to setting her free, the judge urged her to apply for a presidential pardon, which he promised to endorse.


Jack Townsend,  Sentencing Judge on Offshore Prosecution Chastises the Government for Lack of Judgment

Bloomberg News,  Widow Gets Less Than Minute of Probation in U.S. Tax Case


Tax Roundup, 8/30/2012: Hey, I said I’m sorry edition. But the IRS isn’t apologizing!

Thursday, August 30th, 2012 by Joe Kristan

Sorry about that $2.1 million.  Remember the world’s thriftiest tax cheat, the one who stole $2.1 million from Oregon and used it to buy a 1999 Dodge Caravan and some tires?  An apology from the director of the Oregon Department of Revenue didn’t go well, according to this report from

SALEM — A contrite director of the Oregon Department of Revenue appeared before a legislative committee Wednesday and apologized repeatedly for dropping the ball on a $2.1 million fraudulent tax refund. But both Democrats and Republicans weren’t in a forgiving mood, demanding to know why four workers who failed to catch the return weren’t fired and whether the agency can do its job.

“It’s not going to be enough to sit here and say you’re sorry,” said Rep. Cliff Bentz, R-Ontario.


Why are they so upset?  He said he was sorry, after all?


Two managers and one administrative clerk received written reprimands but no change in their salaries. A fourth worker was demoted and transferred to another part of the agency. That person, an administrative specialist, got a pay cut from $45,396 a year to $41,208.  

Most private sector clerks have problems beyond reprimands if they let $2.1 million go out the door to a theif.  Still, while the apology may not seem like much, it’s more than we’ve gotten from IRS Director Doug Shulman for letting over $5 billion per year go out the door to identity thieves.

Why is Doug Shulman too darn busy to apologize for letting ID thieves loot the Treasury?  Maybe because he’s spending his time making life miserable for Canadians.  Tax Notes reports ($link) that Frustration Grows for Canadians in OVDI:

Taxpayers and their advisers asked the IRS for guidance on how to deal with RRSPs [Canadian retirement accounts] in the summer of 2011 but received inconsistent replies     The IRS’s delay in issuing the guidance…  annoyed taxpayers because, at least regarding the requests for a letter ruling granting 9100 relief, it caused them to incur professional fees that turned out to be unnecessary.

“This decision could have been made in September, October, even November, and the clients could have avoided the additional costs,” said [attorney] Ciraolo. “While we appreciate the 9100 relief offered under FAQ 54, the fact that the IRS failed to acknowledge the inconvenience and cost caused by the delayed guidance, and failed to address whether the Canadians in the OVDI would be eligible for the new program open on September 1, only furthered the belief of the Canadian taxpayers that the IRS is acting without due consideration to the circumstances of those taxpayers who entered the OVDI in good faith.”

Of course.  The program has been haphazardly administered, treating innocent noncompliance with obscure IRS rules as presumptive evidence of offshore money-laundering.
The frustration that the delayed guidance on late elections to file Form 8891 has caused for U.S. practitioners and their Canadian clients exacerbated an increasingly tense diplomatic situation and perhaps convinced some Canadian taxpayers who sat out the 2011 OVDI that noncompliance was the right choice.

So we’ve provoked our closest neighbor while convincng many that non-compliance is safer than expecting the IRS to be fair.  Well done, Commissioner! 

Jack Townsend,  AICPA Complains to IRS About Form 3520 Administration Issues.  Form 3520 is a form that must be filed by taxpayers with interests in foreign trusts.  You’ll be shocked to hear that Doug Shulman’s IRS is botching it:
The AICPA letter described six specific errors the IRS letters claim taxpayers have made, including filing Form 3520 late when it was filed on time.

When you make it harder to follow the rules than to ignore them, the results won’t be good. 

This looks like one of those kinds of things that happen when staffing at a government agency is reduced beyond what is reasonable for the kinds of tasks that have to be carried out. 

I’d be more sympathetic to that argument if Doug Shulman’s IRS hadn’t taken it upon itself to devote massive resources to an intrusive and futile preparer regulatory scheme at the behest of the big national tax preparation firms and to requiring massive amounts of futile paperwork for international compliance.

How Bain Capital execs lower their taxes (Dan Primack, Fortune, via Going Concern):

There has been lots of talk over the past few days about how Bain Capital executives have used management fee waivers to effectively lower their tax payments (a tactic that is not unique to Bain). Some academics have argued that such waivers are an illegal dodge, while private equity tax attorneys I’ve spoken with call it “aggressive but accepted by the IRS.”

Here is the basic structure: Bain officially charges 2% management fees to investors in its private equity funds. The idea is to cover overhead, such as salaries, office leases, electric bills, etc.  But Bain has lots of other business lines (venture capital funds, hedge funds, etc.) that generate sufficient cash flow, so it “waives” the PE fund management fees…

By doing so, Bain partners don’t pay ordinary income taxes on their management fees. Instead, they pay at capital gains rates if/when the deals generate profit (because it’s now considered carried interest).

Many commentators seem to think that Mitt Romney should have gone out of his way to pay the highest tax possible, rather than doing what his tax advisors and the rest of his industry did.  I doubt that they direct their own preparers to forego deductions and exclusions that they think are poor policy or the result of poor administrative interpretations of the tax law.


TaxProf: Mitt Romney’s Tax Mysteries: A Reading Guide

Dan Meyer, The Annual Tax Extenders Legislation Addressed by the Senate.  But it has a long way to go.

Peter Reilly, Challenge To Clergy Tax  Break Gets Green Light — Next Stop, Scientology?

 Jason Dinesen has incorporated.

Anthony Nitti, How Does a “Go Shop” Provision Impact the Treatment of Transaction Costs?



All offshore taxpayers look alike to Shulman

Monday, April 9th, 2012 by Joe Kristan

Jack Townsend explains the fundamental problem with how the IRS treats offshore taxpayers:

I wonder if the Commissioner really understands how misfocused the program really is.  Does he really understand the difference between whales and minnows, both of which he sweeps into the same net?  Punishment should not be the same for both.  Yet, the IRS offers a program of one size fits all, where the penalties [are the same]  for the whales (most of whom are really bad guys in terms of tax noncompliance) and the minnows (most of who are not).

Does he understand?  If the worst commissioner ever does understand, he sure has a funny way of showing it.

Related: Shooting jaywalkers so we can slap the real criminals on the wrist


Justice is served on another international tax evader!

Tuesday, March 27th, 2012 by Joe Kristan

Whenever the IRS trumpets an international tax crackdown, credulous reporters take for granted that it’s only evil rich tax cheats that get swept up.  Phil Hodgen knows better, telling the story of a taxpayer who came to the U.S. with a work permit, but left ruined by Commissioner Shulman’s jaywalker hunt.


IRS Commissioner Shulman: you obey the law. Me, that’s different.

Monday, February 20th, 2012 by Joe Kristan

The IRS hasn’t been known for sympathy for inadvertent violators of the foreign account reporting rules. Americans inheriting foreign property from distant relatives, young Americans who moved abroad to start a career, children born in the U.S. who have lived abroad since infancy — all face stern wrath, and big fines, for not filing foreign financial account disclosures that they had no idea existed.
You would think that a Commissioner so stern about punishing foot-faults would be extra careful about obeying the rules itself, if he had a smidgen of shame or self-awareness. Apparently not.
Tax Analysts reports that IRS Commissioner Doug Shulman will simply ignore his statutory duty to respond to a Taxpayer Advocate Directive on abuses of offshore taxpayers in the Offshore Voluntary Disclosure program. From the story ($link):

IRS Commissioner Douglas Shulman has no plans to respond in writing to National Taxpayer Advocate Nina Olson’s taxpayer advocate directive (TAD) on the IRS offshore voluntary disclosure program (OVDP) despite a statutory requirement that taxpayer advocate recommendations be responded to within 90 days, Olson said February 17.
According to Olson, who spoke at the Individual and Family Taxation session of the American Bar Association Section of Taxation meeting in San Diego, Shulman told her that section 7803(c), which requires the commissioner to formally respond to any taxpayer advocate recommendation within three months of its submission, applies only to the taxpayer advocate’s annual report and not to recommendations made through TADs or taxpayer assistance orders (TAOs).

How convenient for him. Let’s see what Section 7803(c) says:

(3) Responsibilities of Commissioner
The Commissioner shall establish procedures requiring a formal response to all recommendations submitted to the Commissioner by the National Taxpayer Advocate within 3 months after submission to the Commissioner.

That’s “all recommendations.” Not “all recommendations submitted in the annual report of the Taxpayer Advocate.” Not “all recommendations under this Section.” Just “all recommendations.” If there was a 50% annual penalty assessed on the balance of the Commissioner’s bank and retirement accounts for failing to respond on time — the same penalty that he is gleefully assessing on offshore account non-reporters — I bet he would have responded. After all, unlike the unwitting victims of the offshore compliance jaywalker hunt, it’s clear the Commissioner is well aware of this requirement.


Jaywalkers flee the gunfire

Thursday, February 2nd, 2012 by Joe Kristan

From Andrew Mitchel’s International Tax Blog:

In 2011, the total number of expatriates was 1,781, a 16% increase from 2010. Last year had the highest number of expatriates since at least 2004 (when I started keeping these records), and perhaps the most in any year in U.S. history.
According to the I.R.S., an estimated five to seven million U.S. citizens reside abroad. Many of these individuals have never lived in the U.S. and never expect to live in the U.S. However, these U.S. citizens must annually file U.S. tax returns.
For example, I spoke with a Canadian the other day who was born to two U.S. citizen parents in Canada. This individual therefore is a U.S. citizen. However, he has never lived in the U.S. and never expects to live in the U.S. Despite that he has never lived in the U.S., he will have to file U.S. tax returns for his entire working life.

The IRS hits people like these — many of whom had no idea they were supposed to be filing — with severe financial penalties. Meanwhile, it provides relatively cushy deals with actual criminals through its OVDI program, because you have to shoot the jaywalkers to really slap the wrists of the serious offenders. No wonder the jaywalkers don’t want to play anymore.
Update: The TaxProf has more.


Shooting jaywalkers, wrist-tapping GE

Thursday, January 26th, 2012 by Joe Kristan

GE just lost an appeal on a big basis-shifting tax shelter, to the point of getting hit with a 20% penalty. While that seems bad, Jack Townsend makes an arresting comparision of GE’s consequences from a “BS” shelter attempting to save GE over $60 million with the treatment of foot-faulters being hammered under the IRS pogrom against offshore tax evasion. From Mr. Townsend:

Was GE’s conduct in this case any more morally upright or commendable than most of the persons who have been herded into OVDP 2009 and OVDI 2011 with far more draconian penalties? Yet, GE drew a relatively light 20% penalty.

Because you have to shoot the jaywalkers to wrist-tap the bad guys.
Related: Darth Shulman to foreign account holders: I am altering the deal. Pray I don’t alter it any further.


IRS begins third jaywalker hunt

Tuesday, January 10th, 2012 by Joe Kristan

News from the IRS yesterday:

The Internal Revenue Service today reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs.
The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.
“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation


Taxpayer advocate tries to distract the jaywalker shooters

Friday, January 6th, 2012 by Joe Kristan

Practitioners, including me, have been saying that the IRS administration of the offshore disclosure “amnesty” has been cruel and incompetent. Apparently Taxpayer Advocate Nina Olsen agrees, reports Tax Analysts in a shocking, and unfortunately gated, report:

Arguing that IRS examiners treated some participants in the 2009 offshore voluntary disclosure program (OVDP) unfairly, the national taxpayer advocate has invoked a rarely used administrative tool to try to force the IRS Large Business and International and Small Business/Self-Employed divisions to change their audit procedures. That dispute has escalated and now awaits a final decision by IRS Commissioner Douglas Shulman.
At issue is whether the IRS must revoke a March 1, 2011, memo directing examiners to stop accepting less than the 20 percent offshore penalty as apparently permitted in OVDP FAQ 35 and instead instruct those examiners to assume a violation was not willful unless they can prove otherwise.

It’s not encouraging that the decision rests in the hands of Commissioner Shulman, who hasn’t lifted a finger to intervene in a process that has infamously treated Americans abroad and U.S. residents with foreign accounts as presumed criminals, hitting minor and harmless violations of obscure rules with absurd fines.
The Tax Anaysts story explains that the Taxpayer Advocate Directive is the biggest gun in the Taxpayer Advocate’s arsenal, and is rarely used. It says the IRS overrode a provision in its own amnesty with a secret (now released) memo ruling out leniency towards inadvertent violators.
It remains to be seen whether Commissioner Shulman will start to undo the damage. It’s a big job. From the Tax Analysts story:

Practitioners echoed Olson’s concerns that the missteps in the OVDP have implications beyond the program participants. “It’s all about long-term compliance,” said [tax attorney Mark E.] Matthews. As a result of the hard-line approach in the OVDP and the OVDI, as well as the coming Foreign Account Tax Compliance Act reporting requirements, foreigners have become convinced that the IRS is liable to be unreasonable. “It is not going to be easy to fix that,” he said.

Once you start shooting jaywalkers, it’s hard to get the others to cooperate.
Related: We will continue to execute jaywalkers ruthlessly, for their own good.


IRS menaces the Great White North

Thursday, October 6th, 2011 by Joe Kristan

The IRS Commissioner goads Canada into war — my new post at Going Concern.


Shulman’s great Canadian Pension Raid

Tuesday, September 27th, 2011 by Joe Kristan

When he’s not busy fingerprinting tax preparers — after all, we’re all just itching to be criminals should the IRS let down its guard for a moment — IRS Commissioner Doug Shulman is busy trying to raid the pensions of Canadians working in the U.S. Phil Hodgen has the infuriating details.
Jack Townsend has more.


Associated Press, here are your tax cheats.

Friday, September 16th, 2011 by Joe Kristan

The IRS announced the preliminary results of the 2011 Offshore Voluntary Disclosure Program yesterday. The Associated Press disgraces itself with this headline:

12,000 tax cheats come clean under IRS program

Let’s meet some cheats:
A Canadian with an American parent who has spent his entire life in Canada, but who is inadvertently out of compliance with U.S. tax laws because he is a U.S. citizen and who faces ruinous penalties if the IRS can get ahold of him.
A 33-year old U.S. expat who moved to France when she was 20, became a French citizen, but who faces ruinous penalties for failing to report her French income and bank accounts to U.S. authorities.
Green Card holders who move to the U.S. for employment but don’t realize they are supposed to report all of their financial accounts in their home country to the IRS.
Second-generation Americans who inherited foreign property they never knew about who face– you guessed it– ruinous penalties under the FBAR “amnesty.”
So there’s your “tax cheats,” A.P. Yes, there are also some actual tax evaders that have taken advantage of the IRS program, but there are many inadvertent violators trying to get out from under penalties they incurred accidentally with no intent to evade taxes anywhere.
If the A.P. reporter ever accidently leaves a $10 1099 off his 1040, may he face felony tax evasion charges for being a “tax cheat.”
The TaxProf has a roundup.


Down to the wire on the offshore amnesty

Monday, August 15th, 2011 by Joe Kristan

Jack Townsend has the latest on the IRS FBAR amnesty, including news on when you have to pay interest and penalties.


Offshore account ‘amnesty’ deadline looms

Tuesday, August 9th, 2011 by Joe Kristan

The 2011 Offshore Voluntary Disclosure Initiative expires August 31, as Peter Pappas and Kay Bell remind us. If you have big undisclosed accounts you have been using to evade U.S. taxes, it can be a sweet deal. If you have accidentally missed a minor amount of taxes because you were unaware of the foreign account requirements, the program may not be so sweet.
Related: Offshore account holders: should you use the ‘amnesty’?


Shooting jaywalkers so we can slap the real criminals on the wrist

Tuesday, August 2nd, 2011 by Joe Kristan

Attorney Jack Townsend has another must read post about the horrible administration of the IRS offshore voluntary compliance program — a program that treats an expat or green card holder who has tried to pay all taxes due just like it treats a money-laundering tax evader.

I am concerned that the IRS does not have any idea as to the damage it is doing among this group of people whose footfault was small on any relative scale and in many cases non-existent in terms of culpability (they really did not know they had income tax and FBAR reporting obligations).

Read the whole thing. Everything in it is consistent with what I’ve seen.
Related: Offshore account holders: should you use the ‘amnesty’?