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I.R.S. Eases Some Rules for Taxpayers Overseas

The I.R.S. commissioner, John Koskinen, acknowledged that the changes to the agency’s offshore voluntary compliance programs, which provide a path for people to make things right, were partly a response to feedback from angry taxpayers and to sharp criticism from the agency’s own taxpayer advocate.irstax

Overseas tax-collection efforts, greatly increased by the agency in recent years, have drawn intense criticism from Americans overseas and groups representing them. They say the pressure is so great and potential penalties so high that growing numbers of expatriates have renounced their citizenship.

Nina E. Olson, the taxpayer advocate wrote that the changes to the IRS’s offshore voluntary compliance programs — programs that the I.R.S. says have brought in $6.5 billion in revenue — have hit small taxpayers disproportionately.

Until now, a taxpayer could participate in the voluntary compliance program only if the unpaid tax was $1,500 or less a year — a low ceiling that most people exceeded. There will now be no limit.

But anyone remaining out of compliance could now face penalties of up to 50 percent of the balance in an account — up from 27.5 percent at present.

Original story at The New York Times.