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IRS Announces Its Voluntary Disclosure Initiative for Americans with Foreign Bank Accounts

If you have undisclosed foreign bank accounts with unreported income, Lawler Mahon & Rooney LLP urges you to participate in the 2011 Offshore Voluntary Disclosure Initiative (OVDI).

We are reaching out to you to underscore how important it is to deal with this problem if it exists. Not only does the Internal Revenue Code impose severe civil penalties in matters such as these, but the Code also provides for criminal penalties which could result in imprisonment.

The IRS announced this second voluntary disclosure initiative for US citizens with undisclosed offshore income on February 8. The initiative allows taxpayers to become current on their taxes by disclosing hidden assets and paying their back-taxes, with penalties, by August 31, 2011.

The overall framework inflicts higher penalties than the previous disclosure initiative: most individuals will pay 25% of their hidden bank accounts, measured in the year with the highest aggregate account balance between 2003-2010. Those, whose offshore accounts or assets never exceeded $75,000, qualify for a 12.5% penalty instead, and some taxpayers in “limited situations” can qualify for a 5% penalty. Everyone applying must pay back-taxes for up to eight years, with interest, as well as any applicable accuracy-related or delinquency penalties.

Should you have any questions concerning this program or its applicability to your personal tax situation, please call James J. Mahon at 212-584-2990 or email him at J.Mahon@lmrnylaw.com immediately so that we can begin to deal with this problem.

Mahon is a senior member of Lawler Mahon & Rooney and has accrued more than 30 years as a civil and criminal litigator. He has represented clients before various State and Federal courts and agencies, including the Internal Revenue Service, the United States Tax Court, and the New York State Division of Taxation & Finance.

Having a foreign bank account that has not been disclosed to the IRS is a serious matter that requires your immediate attention. Contact James Mahon at Lawler Mahon & Rooney or your current legal counsel today.

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