IRS Announces 2012 Indulgences-for-Cash Program
- Details
- Category: Global Perspectives
- Published on Tuesday, 14 February 2012 11:33
- Written by Kevin Brekke
Here we go again. With the benevolent goal of morphing their unofficial motto from "We Care" to "We Care ... Honest," on January 9 the IRS announced the third incarnation of its indulgences-for-cash program, er, Offshore Voluntary Disclosure Program (OVDP). You can read the announcement here.
Regular readers of International Man will be familiar with this initiative. In fact, the first two offerings of the program in 2009 and 2011 were titled "Initiatives" rather than "Programs." Sounds like this might be the third step along a 12-step program to cleanse all the tax-infidels from within the US tax system.
Quoting IRS Commissioner Douglas H. Shulman, "As we've said all along, people need to come in and get right with us before we find you."
The new program borrows heavily from the terms offered under the earlier initiatives. For instance, a tax payer who wishes to enter the 2012 program must file original and amended tax returns for the years 2004 through 2011, and pay all back taxes owed plus accuracy and delinquency penalties.
However, there are several differences included in the 2012 version worth noting. The general penalty rate has been increased from 25% to 27.5% of the highest single-year aggregate value of unreported foreign bank accounts and other offshore assets over the eight-year period covered by the program. And the program is open-ended, with no closing date yet stipulated.
Another important change is the new procedure the IRS is said to be developing when considering the cases of delinquent or "out-of-compliance" dual-nationals and non-US residents. Those who fall into these categories might qualify for a greatly reduced penalty structure, or in some cases, no penalty at all.
The terms of participation, the applicable penalty regime, and many other nuances of the program that carry potentially catastrophic financial and criminal consequences are beyond the scope of this service. Anyone who is unsure if they are in compliance with the reporting requirements for foreign held assets should consult a qualified tax attorney for further information and guidance on how to proceed.
The trick to sleeping well at night and not fretting over headlines about the aggressive hunt for tax cheats by the IRS is to always stay compliant.
If you are reading this you are most likely a freedom-seeking individual that is alarmed at the ongoing erosion of personal financial privacy in the US. And I totally understand and agree with these sentiments. In fact, these concerns were part of what motivated me to move to Europe several years ago.
But regardless of how offensive these reporting requirements might be, we must comply ... or else. And the "or else" part can be very unpleasant. Yet, do not let the intrusions of tax authorities (and the mounting stack of paperwork that must be dealt with) deter you from looking overseas for investment opportunities or for a primary or secondary residence, because that is precisely the intent of the IRS and Treasury Dept.
Instilling fear of making a mistake, or some other insignificant oversight, and facing an interrogation by the IRS is definitely one of the primary goals of the authorities. Every dollar that is sent abroad has the potential to deprive some branch of government of tax revenue, or hinder economic growth because the money is spent into a foreign economy.
As International Men and Women, it is our duty to stay in front of tax reporting regulations and remain legitimate. We must continue to hold some of our assets outside the US, and seek investment prospects wherever they may be. Internationalizing one's life and wealth is no longer an option. Nor is it quaint cocktail party chatter with which to impress guests. It is an essential part of every investor's wealth protection plan. Don't put it off until it's too late. Get started today.
[To interact with other international men and women all around the world, consider joining the International Man Network. It's completely free to join, plus you'll have access to a private forum of thousands of like-minded individuals who are sharing their "boots on the ground" tactics and experience on how to internationalize one's life and wealth. Sign up here.]
Rex Conrad
Posted at 2012-02-21 12:44:19
"I guess it's okay if government sends dollars abroad, but not if you or I do it."
That's because those dollars going abroad are poofed into existence by the magic of digital fiat 'money'. The reason WE aren't allowed to send money abroad is that our money is the very REAL money required to pay the interest on the fake money poofed into existence by the private Federal Reserve cabal and lent to Uncle Sugar.
Steve Thompson
Posted at 2012-02-17 21:04:15
It seems kind of odd that the US government doesn't want us to send any of our money abroad, depriving some branch of tax revenue, yet it has no problem with sending billions of the same federal reserve notes to foreign countries for no other reason than to attempt to buy friendship. I guess it's okay if government sends dollars abroad, but not if you or I do it.
Reply to comment