Excerpt taken from the article.
The US government has increased its focus on international tax issues in an effort to improve information reporting, obtain more tax and penalty revenue, and enhance its enforcement efforts. In particular, the US has been aggressively pursuing US taxpayers with unreported foreign assets to increase US revenue and bring US taxpayers into compliance with the US tax laws.
Through a variety of initiatives, the US government has obtained information about US account holders and their foreign assets from jurisdictions that rarely, or never, shared this type of information with the US. Multi-lateral diplomatic and economic pressures are causing nations that previously accepted bank secrecy as a tradition and, more practically, as a mechanism to attract deposits from around the world, to move toward greater transparency and cooperation regarding financial information.
The IRS has increased its global enforcement presence, particularly through its Criminal Investigation Division, and tax authorities worldwide have engaged in cooperative efforts to discover taxpayers with unreported assets. Given the current climate, US taxpayers (both individuals and businesses) with foreign financial assets and other foreign assets should review their compliance with the US reporting requirements. If non-compliant, these taxpayers should consider the options to correct their non-compliance with minimal risk of criminal repercussions and with potentially reduced civil money penalties.
This article generally discusses the US reporting rules for foreign accounts and assets, the civil penalties for non-compliance, current US enforcement initiatives and the options for US taxpayers to address prior non-compliance.To read the rest of this article, click here
© 2012 Practical Law Publishing Limited and Practical Law Company, Inc. Originally published by Practical Law Company. Reprinted with permission. The opinions expressed are those of the author.