Indian American community delegation meets the IRS offcials on OVDI
Indians in particular, are intensely family oriented. The second category included people who have worked, saved and are sending money in preparation of retirement. This usually takes the form of property and allied investments. These monies are also usually after tax monies.
The delegation stressed that the way in which the penalty is imposed, i.e. 25 percent on the highest balance over the eight years span, was totally out of proportion to the presumed willful violation. Such a level of penulty itself violates the principle of proportionality on which the US law rests. The penulty therefore violates the 8th amendment of the US constitution and the case law precedents it has set. If the penalty was reasonable, more tax payers will comply. It is obviously in the Interest of the IRS to promote wider compliance of the tax laws.
3. The third point was about the way the IRS has implemented the amnesty program. After entering the program, the tax payees or their accountants only deal with agents who are given no power to separate willful non-compliance from innocent non-compliance. They simply administer the law and impose punishing penalty. Even If the tax payer has genuine grounds for failing to disclose, the agents are not allowed to use their discretion. This will punish the innocent, in fact the bulk of the community who are law abiding citizens and have regularly paid their dues to the IRS.