How To Avoid IRS Penalties on Foreign Income

If you have unreported foreign income, then you may be able to use Streamlined Offshore Procedures to avoid penalties or more serious consequences.

Streamlined Offshore Procedures are a way for certain taxpayers with unreported foreign income and bank accounts to get into tax compliance with the IRS in an efficient way.

The IRS created these procedures to make compliance achievable, and they are designed only for individual taxpayers, including estates of individual taxpayers.

The tax attorneys and professionals at Kugelman Law have vast experience helping U.S. taxpayers throughout the world gain compliance with the IRS.

Who is Eligible for Streamlined Offshore Procedures?

The Streamlined Offshore Procedures are available to both resident and non-resident U.S. taxpayers. To be eligible, you must not be under IRS examination (a.k.a., an audit).

Second, you must not have willfully concealed foreign assets or foreign income.

And third, resident U.S. taxpayers must have timely filed all returns. Non-resident U.S. taxpayers do not need to meet the filing requirement to participate in the program.

If you meet all these criteria, then you may be a good candidate to achieve compliance through the Streamlined Offshore Procedures.

The IRS designed the procedures in order to set a system for filing amended or delinquent returns and to set terms for resolving their tax and penalty obligations.

Many people are truly non-willful when it comes to their tax violations. Oftentimes, these people are living or have family in a foreign country and were unaware of additional tax reporting requirements. However, living abroad does not relieve the filing requirement and may raise new filing requirements.

Remember, once a taxpayer completes the streamlined filing compliance procedures and comes into compliance, the taxpayer is expected by the IRS to comply with U.S. tax law for all future years and file returns according to regular filing procedures.

Streamlined Offshore Procedures vs. OVDP

The Offshore Voluntary Disclosure Program (OVDP) was a program designed for U.S. taxpayers that willfully or intentionally did not report foreign assets and income. It required amending eight years of returns and paying a substantial penalty.

This program was designed for U.S. taxpayers concerned about criminal prosecution. However, as of September 2018, the IRS ended the Offshore Voluntary Disclosure Program.

Kugelman Law tax professionals can guide you through Streamlined Offshore Procedures so that you can achieve compliance and safely avoid penalties and criminal prosecution. We have helped many clients disclose unreported foreign income and assets through available disclosure procedures.

Most taxpayers inadvertently violate these rules, which is why the IRS has disclosure programs for such taxpayers to achieve compliance.

By working with Kugelman Law, you will get to benefit from the tax expertise of our attorneys who have helped clients throughout the world just like you. Please contact us today to help resolve your foreign tax issues.

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