Taxes & Offshore Disclosures
One of the main services in Tinley Park accounting services is the offshore voluntary disclosure and tax compliance. The disclosure facilities provided is the most convenient way to declare undisclosed assets, without being subjected to additional penalty and legal action. It allows you to bring your tax files up-to-date, if you have income or assets overseas which is not disclosed for taxation.
The US government is aggressively pursuing individuals to declare their oversea assets and income. There are several options available for United States tax payers who hold undisclosed overseas financial assets.
- Offshore voluntary disclosure program
- Streamlined filing compliance procedure
- Delinquent FBAR submission procedures
- Delinquent international information return submission procedures
Offshore voluntary disclose program in Tinley Park
The OVDP is a special scheme dedicated for the tax payers who have the potential exposure for tax criminal liability, due to the failure to disclose foreign financial assets. The OVDP provides cover against criminal liability and facilities for resolving oversea tax obligations. The terms of the OVDP may change periodically. For example, the OVDP of 2012 has a higher penalty rate than the previous OVDP schemes. They may even decide to terminate the program at sometime. The program applies to all US tax payers, green card holders or foreign nationals living in the United States.
However, OVDP is not for everyone with previously undisclosed foreign assets. Whether or not an individual can participate in OVDP depends on facts and circumstance. In order to determine whether you are eligible for OVDP, you need to immediately consult a tax lawyer in Tinley Park, provide him the details of your foreign accounts. An experienced tax attorney, who has expertise in the area of OVDP can help you get the maximum benefits with the program.
The first step in participating in the program is to submit a ‘pre-clearance’ letter to the IRS, which also serves as your application to the program. Within 30 days of receiving the letter, the IRS will notify the tax payer, whether or not he’s eligible for the program. Clearance can be denied by the IRS for several reasons. If the claim is accepted by the IRS, the taxpayer has to submit all the required documents (listed below), within 90 days of notification.
Why you need to disclose oversea income in Tinley Park?
There’s an international treaty that’s being committed by over 90 countries, which allows their tax authorities to look in to your oversea accounts. If you haven’t declared your oversea income, the tax department in Tinley Park will investigate your oversea accounts, you will be subjected to penalty, which may cause you to pay double the tax you owe. Worst, you could even go to the prison.
If you declare your oversea assets under offshore voluntary disclosure program in Tinley Park, you can avoid a lawsuit as well as pay a penalty lower than the standard. However, if you have undisclosed foreign assets, and still ignore the program, you are at risk of being detected by the IRS and subjecting to criminal investigation.
What information needs to be declared under offshore voluntary disclosure program?
You will have to provide the following information for the offshore voluntary disclosure program.
- oversea accounts
- other investments (oversea companies and trusts)
- insurance income
- the details of the account holder
- the balance in the account
- payments made to the account
- copies of previous federal income tax returns
- Offshore Voluntary Disclosure Letter.
- copies of statements of all financial accounts
Penalties included in the offshore disclosure
In addition to paying the taxes owed on the undeclared income, following penalties also need to be paid:
- 5% of offshore penalty
- 20% accuracy related penalty
- penalty on failure to file and pay the taxes