If you have money stored in foreign bank accounts, you owe it to yourself to meet with an IRS tax lawyer to talk about the Offshore Voluntary Disclosure Program. After all, it’s better to meet with a lawyer BEFORE you’re in any kind of trouble!
When the two of you sit down, be sure to ask these 4 questions:
1. “Do I qualify for the program?”
Any good IRS tax lawyer knows that if you have more than $10,000 stored in foreign bank accounts, you qualify for the IRS Offshore Voluntary Disclosure Program. And, you don’t just have to have a certain account balance at tax time. If your accounts sit at or above $10,000 at any point during the year, you’ll have to comply with the rules of the program.
2. “Is it really voluntary?”
Funny how the IRS created a program with the word “voluntary” in the name, huh? However, this program is anything but. If you qualify for the program, you are required to follow the rules. If you don’t, you face many of the same punishments as you would if you didn’t file a tax return — like paying big fines and even going to jail!
3. “Will the IRS really find out about my money if I don’t tell them?”
A smart IRS tax lawyer will answer this question with a resounding “Yes!” Just because your money is stored outside the U.S., the IRS still has ways of tracking it down.
In fact, when the IRS Offshore Voluntary Disclosure Program was first created, there was a special investigation unit created to go along with it. Additionally, the IRS has been getting help from the Justice Department — which has been pressuring foreign banks to provide information about their American account holders.
Bottom line — if you don’t tell the IRS about your foreign money, they will still find out about it. You’d much rather they get the news from you!
4. “What kind of paperwork do I need to file?”
Instead of filing a traditional tax return like you do with your domestic taxes, the IRS Offshore Voluntary Disclosure Program comes with its own form — called the FBAR.
Unlike a firm April 15th deadline that never changes, FBAR deadlines can change from year to year. Typically, FBARs are due sometime during the summer. However, your IRS tax lawyer can let you know exactly when yours is due. He can also help you prepare it so that you don’t run the risk of raising any red flags.
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