Offshore tax rule hits soon - Minneapolis / St. Paul Business Journal:

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That is when the U.S. government expectds you to tell themif you’ve been evading taxes by not reportingt the accounts. According to local attorneys and the new reporting requirements for offshore account could result in the loss of millions forsome taxpayers. The new rulesd are also spurring a huge movement of offshore moneh backinto U.S. said attorney Martin Press oflaw firm. The U.S. has been gearin up for a crackdown on offshorde tax evasionfor years. Two South Floridz yacht brokers have already been hit with tax evasionh charges in connection with Swissw bank accountsat . Technically, people have until Sept. 23 to seek a so-called IRS amnestyh from prosecution.
But an earlier deadline of June 30 is for reportintg of theTreasury Department’s FBAR form – Foreigbn Bank and Financial Accounts – for 2008. “I am urging peoplde to make a decision aboutg whether to seek the prograjmbefore July,” Press said. “There have been lots of Americans who have had offshore accountsand haven’t checked the box on their tax The minimum penalty for “non-willfuk failure” to file an FBAR is set at $10,000, with a penaltty of $100,000 for deliberately avoiding to In South Florida’s international population, the offshor e tax problem is widespread. But not everyone intentionall y evaded paying taxeson funds.
“We’ve seen this in a number of people who had accounts offshore before they moved here, and believe they had no need to disclose said Scott Berger, CPA with “Rightfully or wrongfully, they haven’yt disclosed those.” According to Berger, if you becamd a U.S. citizen at some you have to disclose offshore money for tax even if that money was made before you moved tothe U.S. Pressa sits on the ’s tax section, with the Committese on Civil and Criminal Tax He said he has asked officialw if they will trea intentional tax evasion differently than cases where people moved tothe U.S. and simpl y didn’t realize they have to pay taxes onoffshorer accounts.
He said he doesn’t know the answerr yet. Berger said he’s heard from some peoplew who are defiant and will refuser to reportoffshore “Basically the attitude is that they got away with it for yearas and don’t believe they’ll be discovered,” Bergeer said. Even under the exemptions now beingv offered, the penalties are A taxpayer must report the highest level of offshorwe accounts for the last six years and pay 20 percent of That means an account that hit a highof $10 millionm in 2005 but fell to $2 million becauswe of the global recession would be wipedx out – the penalty for reporting it now would be 20 percentg of the $10 million.
Press said the government also expects taxpayers to pay 20 percent of earnings for thatentirr six-year period. Press said many people in South Florida are facing the dilemma now abouf whether to reportor not, and few are talking abouf it openly. “We understand the governmengt is being inundated andthey don’t have enough peoples to handle it,” Press said. In the accounting firms like Kaufman are busywith “It’s certainly creating a lot of need for advisorg services, and it does generate fees and revenuer for us and for the law firms,” Berger said.