"If you are a U.S. individual holding overseas assets, you must report and pay your taxes or we will be increasingly focused on finding you." Douglas H. Shulman, Commissioner of the Internal Revenue at the AICPA National Conference on Federal Taxation, Washington, D.C., October 26, 2009.
FATCA was implemented in 2010 and the IRS began receiving information on foreign accounts of U.S. persons in 2015. Significant penalties can result from failing to file income tax and information returns related to foreign assets. In 2009, the IRS established the Offshore Voluntary Disclosure Program (OVDP) to assist individuals who have not been compliant with their U.S. tax filings. Since then, they have also established the Streamlined Filing Compliance Procedures and various other "amnesty" programs to assist taxpayers with coming back into the U.S. tax system.
According to Caroline Ciraolo:
- If the IRS contacts you before you are compliant, a purely civil tax resolution is no longer certain. Significant civil penalties are likely. Criminal charges and penalties may also result.
- If the Department of Justice contacts you before you are compliant, a purely civil tax resolution is unlikely. Criminal charges and penalties are likely.
What do I do now?
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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult tax, legal and accounting advisors before engaging in any transaction.