Implications of IRS Amnesty & Tax Filing

Although the IRS (Internal Revenue Service) does not expand any amnesty period for the evaluation of the interest and penalty charges, it frequently provides an abatement or total dismissal of penalties and interest when an individual taxpayer shows that he has had a valid reason for his action that has resulted in the calculation of the penalty and related interest.

The primary objective of IRS Amnesty is to bring the taxpayers that have undisclosed foreign bank accounts and foreign entities in order to avert tax into compliance with the tax laws of the United States. The IRS Amnesty had reopened the Offshore Voluntary Disclosure Program (OVDP) in 2012, as it carries on working on a wide scale of global tax concerns and following continuous attempts with the Justice Department in order to pursue the criminal prosecution of global tax evasion.

However, abatement of penalties is offered for in the IRS code of the United States in case of a reasonable cause. The IRS that originally arbitrates abatement requests, does not offer an official definition of this term, though it is generally considered as an event that would make a logical individual respondent in the matter that resulted him to incur the IRS assessed penalty. Common events that can be taken as reasonable causes include hospitalization of the taxpayer or the death of a family member.

Today expert tax planning agencies offer useful insight into the tax code that is applicable to the resident individuals in the United States, comprising Green Card Holders and US Citizens. It also helps its consumers with the following services:

Consult and impact analysis Total compliance and hassle free tax filing Analysis and planning to minimize FBAR penalty

AMT Strategies and Foreign Tax Credit Mutual Fund or PFIC computations Preparation of forms required to participate in the OVDP program Preparation of Tax Amendments and Delinquent FBAR IRS Representation by Enrolled Agents or Affiliated CPAs and Attorneys Last but not the least, all this for a fraction of the cost charged by other firms.

However, it is usually helpful for an individual taxpayer to show that he tried to fulfill all the IRS obligations as early and reasonably as possible. The IRS is much likely to abate a failure to file penalty in case an individual tax return is filed one day later than April 16th instead of three months late on July 16th.

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