UPDATE: Foreign Financial Account Reporting

GTN Newsletter - September 2014

UPDATE: Foreign Financial Account Reporting

Steve Daas, COO

GTN US 
Phone: +1.763.390.4931 | Email: sdaas@gtn.com

As a follow-up to our May 2014 newsletter regarding the US requirements for reporting foreign financial accounts, we are providing this alert to highlight significant modifications recently announced by the US Internal Revenue Service (IRS) to its Streamlined Filing Compliance Procedures which are used to encourage taxpayers to voluntarily disclose unreported foreign financial accounts.

The streamlined filing compliance procedures are available to taxpayers certifying that their failure to report foreign financial assets and pay all tax due in respect of those assets did not result from willful conduct on their part. The streamlined procedures are designed to provide to taxpayers in such situations (1) a streamlined procedure for filing amended or delinquent returns and (2) terms for resolving their tax and penalty obligations. These procedures will be available for an indefinite period until otherwise announced.

The streamlined filing procedures that were first offered on September 1, 2012 have been expanded and modified to accommodate a broader group of US taxpayers. Major changes to the streamlined procedures include:

  • Extension of eligibility to US taxpayers residing in the United States,
  • Elimination of the $1,500 tax threshold,
  • Elimination of the risk assessment process associated with the streamlined filing compliance procedure announced in 2012.

The filing procedures for individual residing outside of the US and in the US are beyond the scope of this alert. The IRS has provided the following guidance:

As a part of the program revision, the IRS released an expanded and revised set of Frequently Asked Questions (FAQs). It is available at: http://www.irs.gov/Individuals/International-Taxpayers/Offshore-Voluntary-Disclosure-Program-Frequently-Asked-Questions-and-Answers-2012-Revised.

In addition, transitional treatment under the Offshore Voluntary Disclosure Program (OVDP) will allow taxpayers currently participating in OVDP who meet the eligibility requirements for the expanded Streamlined Filing Compliance Procedures announced on June 18, 2014, an opportunity to remain in the OVDP while taking advantage of the favorable penalty structure of the expanded streamlined procedures. The IRS document explaining the transition to the new program may be viewed at: http://www.irs.gov/Individuals/International-Taxpayers/Transition-Rules-Frequently-Asked-Questions-FAQs.

The revised program may allow individuals who inadvertently failed to report overseas accounts to come into compliance without the risk of prosecution or the full range of applicable penalties.

We recommend that you contact your tax or legal advisor should you have any questions regarding these programs.

If you have any questions please feel free to contact us at help@gtn.com

The information provided is for general guidance only, and should not be utilized in lieu of obtaining professional advice.

Author: Steve Daas

Steve Daas

As a former partner in one of the Big 4 accounting firms, Steve saw the entreprenaurial spirit at GTN, joining them in October 2005. Steve became Chief Operating Officer in 2008, and in 2018, his role and title transitioned to Partner, Global Client Experience. In this role, Steve focuses his commitment to the firm’s promise of being the trusted partner and resource for their clients. sdaas@gtn.com | +1.763.390.4931

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