All American individuals or businesses who earn income offshores are required to pay taxes. This applies not only to citizens but also to holders of green cards, even if one isn’t currently onshore.
If you owe back taxes from funds in offshore bank accounts and don’t disclose it, the IRS will one day enforce collection practices of the highest order. Apart from high penalties, interests, and possible criminal prosecution, not declaring foreign assets and bank accounts also adversely impacts the US economy.
There has been a recent upsurge in the number of individuals and businesses who attempt to hide their offshore sources of income in an attempt to evade taxes. This is a federal offense with serious consequences.
If you missed the October 15, 2009 deadline for tax amnesty, you can file for tax returns and voluntarily disclose your assets. If you don’t, you significantly increase the risk of criminal prosecution. A recent increase in penalties was instated, changing the rate from 27.5% to 50% of the account balance.
The IRS now has the power to gain information about US citizen’s offshore bank accounts from major banks around the world. Furthermore, if you’re already under audit, you cannot apply for the OVDP (Offshore Voluntary Disclosure Program).
It is also possible that you weren’t aware of accounts held by family members, and, because of inheritance, they are now yours. This is considered a non-wilful offense, and the consequences aren’t as severe. The best course of action is to disclose your accounts and assets as soon as possible. However, help from an expert is advised. A certified and experienced tax professional with knowledge of offshore and international varieties will help you navigate the process.
The tax experts at Long Island Tax Resolution are equipped to examine situations where income sources from offshore businesses create tax problems. After analyzing your situation, we will help you resolve any tax problems with offshore or international sources. Contact us today to learn more.