Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York

Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York

   
Resources - Tax Center - Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York
     

IRS Catch Up Filing Program

 

Are you a US citizen that is currently working overseas? Have you failed to file your US income tax returns over the past three years? If so, it will interest you to learn that the IRS has developed a plan to help U.S. citizens become current with their tax obligations. The new program which goes into effect on September 1, 2012, is offering citizens residing abroad (or dual citizens) a chance to play “catch up” on outstanding tax obligations. In certain situations, low risk taxpayers will be able to avoid fees and penalties. The program is designed to provide a quick and painless method to bring taxpayers back into compliance with U.S. tax law.

 

Program Participation

Taxpayers interested in participating in the program will be required to file delinquent tax returns (with related information returns) for the past three years and file the Report of Foreign Bank and Financial Accounts “FBARs” for the past six years (as applicable). Payment of any federal tax and interest due must accompany the submission.

 

Once the information is received by the IRS, how quickly it is reviewed and what specific benefits are available will be dependent on the compliance risk profile of the taxpayer. For those with a low compliance risk, the review will be brief and the IRS will not assess and penalties or conduct follow up actions. Taxpayers who are deemed a high compliance risk will not be eligible for the program and subject to a review. Depending on the circumstance, they may also be subjected to a full examination which would include tax records for more than the previous three years. Based on the findings of the IRS, additional tax, interest and penalties may be imposed on these taxpayers.

 

Determining Compliance Profile Risk

Whether or not a taxpayer should participate in the new program is dependent on the type of compliance risk profile they are assigned. As a result, we have provided key information to help you understand how the IRS makes these assessments. The risk compliance profile is calculated by the IRS and is based on key information provided on the returns filed. Generally speaking a low compliance risk includes a taxpayer that files a simple return and has no more than $1,500 due in each of the delinquent tax years. The risk level rises as the income and assets of the taxpayer increase, specifically if there are indications of sophisticated tax planning or avoidance is detected. Additional risk factors include history of noncompliance with US tax law and amount and type of US source income.

 

Program Limits

It is important to note that the new program does not provide protection from criminal prosecution if the IRS and the Department of Justice determine such prosecution is warranted. Additionally, once a taxpayer makes a submission under the new procedure, they are no longer eligible to participate in Offshore Voluntary Disclosure Program (OVDP) announced on January 9, 2012. Finally, the IRS has warned that taxpayers ineligible to participate in the OVDP are also ineligible to participate in this program.

 

Contact Us

Have questions about the new IRS program? If so, then contact us today! There are several items that must be considered in order to determine which program is the best for you. Consulting a professional will ensure you don’t lose the benefits offered by the various IRS program available. For additional information, please contact Robert Puerto, CPA, at 516-248-7361, or click here to email Robert. In a brief consultation he can assess your situation and determine the best program to participate in.

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Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York

 

Boris Benic and Associates LLP - Certified Public Accountants and Consultants - Garden City, Long Island, New York