Not Swiss Cheese.
are keeping funds offshore and not fessing up, the time has come to face the
piper. While you may have heard of the UBS Swiss account issues, the issue, and
risk to you if you're involved, if far greater. If you come clean with the
IRS-type amnesty program before the IRS knocks on your door, you may get
immunity from both: prosecution
for tax evasion (not paying tax on the unreported income), and false filling
(not checking the box on your Form 1040 disclosing that you have a foreign
account). Also, June 30 every year you're supposed to file Form TBD-90 with the
Treasury Department reporting your offshore accounts. There are draconian penalties if you fail to do this -- up
to 50% of the account (wow!). These penalties might be waived if you disclose.
Voluntary disclosure might get you immunity from prosecution and the right to
repatriate the funds. IRM 22.214.171.124. Not playing like a Boy Scout could trigger
more problems. If you repatriate a large dollar amount from overseas without
having fessed up, when the bank files a suspicious activity report (e.g., an
aberrational deposit) with the IRS as it may be required to do, this will be
sent to the IRS criminal investigation unit. If you make a voluntary disclosure
you avoid all this. But just like those car commercials, "professional driver,
closed road," hire a pro to guide you. Thanks to Lawrence S. Horn, Esq., Sills
Cummis & Gross P.C., Newark, New Jersey.
Innocent Spouse Relief. Generally, a husband and wife that file a joint income tax return are jointly liable for all taxes, interest and penalties. An exception permits a spouse who did not know about the tax understatement to avoid liability if it would be inequitable to hold that spouse liable. The IRS had maintained that the claim for innocent spouse relief had to be brought within 2 years of the IRS beginning collection. Reg. 1.6015-5(b)(1). The court held the 2 year requirement was invalid. Cathy Lantz , 132 TC No. 8 (Tax Ct.). For those who failed to claim the benefits because of the 2 year period, the opportunity should be revisited.
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