IRS Revises a Limited-Amnesty Program for Offshore Accounts
The Internal Revenue Service announced changes to the “streamlined procedure,” which was announced in June and is for taxpayers who weren’t intentionally hiding money abroad.
Participants in the streamlined program who live in the U.S. are eligible for a 5% penalty on the balance of undisclosed accounts, and participants living outside the U.S. may owe no penalty at all. By contrast, taxpayers in a different program who confess to “willfully” hiding accounts owe a 27.5% penalty.
The IRS issued the guidance in question-and-answer format. Seven new questions are for U.S. residents and clarify what assets are and aren’t subject to the 5% penalty.
One new question applies to U.S. taxpayers residing outside the U.S. and clarifies details of residency regarding the program.
U.S. taxpayers who don’t owe taxes but haven’t filed paperwork will have to explain why they didn’t, and the IRS will have to accept the excuse, in order to escape a penalty.
Original Story at The Wall Street Journal