IRS extends Offshore Disclosure deadline to Sept 9

NEW YORK: Thanks to Hurricane Irene and its potential impact, the Internal Revenue Service (IRS) has extended the due date for offshore voluntary disclosure initiative (OVDI) from the original Aug 31 deadline to September 9.
The extension has given a breather, albeit nominal, to several members of the Indian American community who have been affected by the recent IRS move to prosecute individuals holding undeclared foreign bank accounts.
The penalties, with the new extension however, are steeper – up to 25 percent of the value of the assets – and they’re assessed on the highest value of those assets over the last eight years.
For those taxpayers who have not yet submitted their request and any documents, they need to submit identifying information by Sept 9, to be submitted to the Criminal Investigation office. Then, they need to send a request for a 90-day extension for submitting the complete voluntary disclosure package of information to the IRS Austin campus.
Indian American community organizations like the Global Organization of Persons of Indian Origin (GOPIO) had taken up the issue of Aug 31 deadline given by the IRS to declare such accounts, but the IRS had rejected the request.
GOPIO has now urged the concerned Indian American individuals to take advantage of the extension in deadline even if only till Sept 9 owing to Hurricane Irene.
In a special bulletin released late last month, GOPIO has given a detailed Q&A on the process requesting extension for the OVDI.
The main benefit of the second round of the IRS’s offshore voluntary disclosure initiative is that people who come forward will not face criminal charges. They will owe a lot of penalties, but these may be less than if they were caught. While the program officially ends on Sept 9, the IRS has said taxpayers who make a good-faith effort to comply may be able to file for an extension.
India Post News Service

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