IRS Opens Second Voluntary Disclosure Initiative
Time is of the essence in today's volatile financial environment, and you deserve to be informed first on important tax and accounting updates. At Lewis& Knopf, CPAs, P.C., our advisors understand your needs and are mindful of the issues you face. With this in mind, we wanted to make you aware of an important announcement alert from the IRS: the second voluntary disclosure initiative is open. Below is a summary of the initiative.
About the Second Voluntary Disclosure Initiative
The IRS announced the 2011 Offshore Voluntary Disclosure Initiative (OVDI) “to bring offshore money back into the U.S. tax system and help people with undisclosed income form hidden offshore accounts get current with their taxes,” according to the IRS.
This is the second voluntary special disclosure initiative with the first disclosure closing on Oct. 15, 2009. Changes are included in the 2011 initiative, such as a higher overall penalty structure. Participants face a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Some taxpayers will be eligible for 5 or 12.5 percent penalties.
The deadline for filing original and amended tax returns, including payment of taxes, interest and accuracy-related penalties is Aug. 31, 2011.
For additional information regarding Form TD F 90-22.1 and what steps, if any, need to be taken between now and Aug. 31, 2011 to avoid late filing penalties, please refer to the IRS website at www.irs.gov.
General details are included in the IRS news release IR-2011-14 (http://www.irs.gov/newsroom/article/0,,id=234900,00.html).
As a trusted advisor, Lewis& Knopf, CPAs, P.C. has taken a proactive approach to help you understand the second voluntary disclosure initiative, as it could have a significant effect on you, your organization and your employees. If you have any questions or concerns regarding the information highlighted above, please do not hesitate to contact our tax professionals at our Flint office at (810) 238-4617 or our Brighton office at (810) 225-1808. Until then, please accept our best wishes for continued success.