Internal Revenue Service IRS introduced new 2012 offshore voluntary disclosure program to encourage IRS taxpayers holding foreign or offshore bank accounts. Previous programs introduced in 2009 and 2011 have been extremely successful for the IRS. Based on the result of the Offshore Voluntary Disclosure Program (OVDP), IRS understands that it is cost effective and time wise to obtain tax compliance through “carrot and stick” framework than “stick” alone.

Althoug past criminal tax investigations focused on the offshore banking problems in Switzerland, future IRS criminal tax investigations will focus on the Asia Pacific regions including China, South Korea, Taiwan, Australia, Japan, Indonesia and Malaysia.

The key component in any voluntary disclosure participation with the IRS has always been early disclosure to IRS before they find out about you.

FEATURES OF THE 2012 OFFSHORE VOLUNTARY DISCLOSURE PROGRAM FOR OFFSHORE BANK ACCOUNTS

1) 2012 Offshore Bank Voluntary Disclosure will be open for an indefinite period:

Although IRS did not set a deadline for their Voluntary Disclosure program, a key component of any voluntary disclosure program requires that you disclose to the IRS before they find you. In addition, the terms of the voluntary disclosure program could change at any time and the likelihood of increased IRS tax penalties in the future.

2) 27.5% vs. 25% Tax Penalty:

IRS Tax Penalty under the 2012 Offshore Bank program requires taxpayers to pay a tax penalty of 27.5 versus 25% under the 2011 OVDP based on the highest total balance in offshore bank or foreign bank bank accounts.

3) 5% vs. 12.5% Tax Penalty:

Some taxpayers will be eligible for 5 or 12.5 percent penalties based on the level of the asset value and their culpability in establishing the offshore bank or foreign bank scheme. An example of a taxpayer who may qualify for the lower category of tax penalties would be a recent immigrant who came to the United States and kept a bank account in his or her home country and recently discovered the Foreign Bank Account Reporting Requirement.

4) 2012 Offshore Bank Account Participants Must File IRS Tax Returns:

IRS Taxpayers who want to participate in the Foreign Bank Account Program must file and pay all required tax returns for the past few years.

5) Dual Citizens – New Voluntary Disclosure Program for Certain Dual Citizens:

Although not certain, IRS is currently reviewing another disclosure program or new set of procedures for dual citizens of US who may owe no taxes to the IRS to come into FBAR compliance.

Quick Fact About IRS Voluntary Disclosure Program For Offshore Bank Accounts:
1) $3,400,000,00 – IRS Taxes collected so far under the 2009 offshore bank account program.

2) $1,000,000,000 – IRS Taxes collected so far under the 2011 offshore bank account program to date. This amount is expected to double as the IRS completes its investigation.

3) 33,000 – Number of IRS Taxpayers who voluntarily disclosed offshore bank accounts under the 2009 and 2011 programs.

If you have an offshore bank account, and would like to learn about your legal options, including a voluntary disclosure, contact us. All communications will be confidential and covered under the attorney client privilege.

The post 2012 NEW IRS Voluntary Disclosure Program for Offshore and Foreign Bank Account Holders. appeared first on Los Angeles California Tax Attorney Blog.

DO YOU NEED TO REGISTER WITH CALIFORNIA STATE BOARD OF EQUALIZATION FOR SALES AND USE TAX?

State of California taxes are governed by the following entities:

The post CALIFORNIA SALES TAX: OUT OF STATE SELLERS SALES TAX LIABILITY appeared first on Los Angeles California Tax Attorney Blog.

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service to challenge the taxpayer’s right to deduct donations to a Catholic Church. The case involves a married couple who got audited by the Internal Revenue Service concerning donations they deducted on their Internal Revenue Service Form 1040 tax return.

Anonymous U.S. Tax Petitioners v. COMMISSIONER OF Internal Revenue Service

The post IRS Tax Audit – No Good Deed Goes Unpunished: California Tax Attorney appeared first on Los Angeles California Tax Attorney Blog.

California Income Tax – Franchise Tax Board FTB released

its annual list of top 250 California taxayers who haven’t paid their taxes.

The post Tax Problem: Didn’t Pay Your Taxes? Neither Did Pamela Anderson – California Franchise Tax Board(FTB) Releases List of Taxpayers Who Owe Taxes – Los Angeles California Tax Attorney appeared first on Los Angeles California Tax Attorney Blog.

Here is a quick summary of a recent US TAX COURT case against the Internal Revenue Service to challenge the taxpayer’s right to deduct tax losses from a “S” Corporation. The tax case involves an attorney who claimed a loss from his incorporated law practice on his individual IRS Form 1040 tax return. IRS charged taxpayer with penalties and interests based on improper tax deduction.

R.WEISBERG et al v. COMMISSIONER OF Internal Revenue Service

The post IRS Charges Penalties for Improper Deduction on Tax Return – IRS Tax Attorney appeared first on Los Angeles California Tax Attorney Blog.

Last year IRS filed tax lien against California Governator. The IRS tax lien against Schwarzenegger sought $79,000 for taxes or penalties related to informational tax returns pursuant to IRC 6721.

Almost a year later, Schwarznegger got his IRS tax lien released. According to TMZ, tax lien filed against the Governor was released last week.

The post Tax Lien Release – California Gov Schwarzenegger Terminates IRS Tax Lien appeared first on Los Angeles California Tax Attorney Blog.

Internal Revenue Service IRS

released information on its tax audit and tax collection activity results from 2009. Tax Audit, Tax Collection and Tax Audit Category base on income can be found here .

The post Tax Attorney – IRS Releases Tax Audit and Tax Collection Results for 2009 appeared first on Los Angeles California Tax Attorney Blog.

Internal Revenue Service IRS catches another tax evader.

Another

The post UBS Client Pleads Guilty to IRS Tax Case FBAR – Did Not File Voluntary Disclosure or FBAR appeared first on Los Angeles California Tax Attorney Blog.

Last year Democrats Proposed 30% Tax on Foreign Banks that refuse to disclose US Taxpayers as part of continuing efforts by the IRS to quash offshore asset protection and tax evasion strategies conjured up by various financial planners. US Taxpayers with offshore or foreign bank account are required to disclose this information by filing IRS Foreign Bank Account Report.

The Baucus-Rangel bill proposed to impose a thirty percent (30%) withholding tax on income from U.S. financial assets held by a foreign financial institution unless the offshore bank agrees to disclose the identity of any U.S. taxpayers with an account at the foreign bank with additional condition to annually report on the foreign account balance including payments and withdrawals from the foreign bank account.

The post Foreign Banks Worried About IRS – All Foreign Banks Will Disclose US Taxpayers – Voluntary Disclosure Attorney appeared first on Los Angeles California Tax Attorney Blog.