tag:blogger.com,1999:blog-1519969502186924526.post2473636617757100949..comments2023-10-24T08:00:53.865-05:00Comments on Federal Tax Crimes: Miscellaneous Offshore Account Articles (1/15/15)Jack Townsendhttp://www.blogger.com/profile/14469823736335455874noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-1519969502186924526.post-56664899683531223822015-01-18T10:59:49.260-06:002015-01-18T10:59:49.260-06:00Regarding residence-based taxation. US states do ...Regarding residence-based taxation. US states do this; when you move from one state to another you stop paying taxes in the former state and begin paying in your new state of residence. States seem to have no problem ensuring there is compliance (few bogus claims of residing in FL, TX, AK, WA etc.) Even the IRS exempts wages earned abroad up to a certain amount if either the foreign residence or physical presence tests are met. If the IRS can do that, why cant it exempt the same people from all US taxes and FBAR filing requirements?Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-69876944536505357942015-01-18T10:23:00.888-06:002015-01-18T10:23:00.888-06:00As always, the TAS is addressing a lot of importan...As always, the TAS is addressing a lot of important points.<br /><br /><br />Fear and complication of optout, as well as legal costs result in many paying unjustified penalties. This is even after th person comes in voluntarily and reports something that the IRS would not have discovered on its own. Furthermore, one taxes and interest have been paid, the person has reimbursed the government for the damage. There was no damage done by not reporting the account, since FBARS are filed away and the information is not used unless the IRS queries the Treasury for FBAR information.<br /><br /><br />Contrast this to cases of failing to registedr for the draft during the 1960s and 1970s, during the Vietnam war. Those who failed t register were sent a letter telling them to do so (the equivalentof the IRS sending a Letter 3800 or whatever the number is) and the only prosecutions were those who wrote to the Selective Service or the President saying that they were refusing to register (somewhat equivalent to the mayor of London's public statements.)<br /><br /><br />So far the IRS has treated taxpayers in many ways (20%, 25%, 27.5%, 12.5%, 5%, streamlined5%, streamlined 0%, transition to streamlined, etc.) Some happened to hear about foreign reporting a day after the 25% program ended and had to pay 27.5%. Some of the 27.5% participants lucked out because the IRS took years to process them, so they were still eligible to apply for transition.<br /><br /><br />I question the contention that once the 906 is final, theres nothing that can be done. In some of the FOIA documents, the question is asked how can the IRS get a cnsent to reopen years for which the SOL has expired, and the answer given is that under contract law the taxpayer and IRS can agree to anything. Thus it seems that they could just as well agree to modify a 906 signed by both parties, IF both parties agree to modify it.<br /><br /><br />Should such a proposal come into existence, I believe part of it should be a requirement that the IRS send notice to all 40,000 who entered OVDI, as well as prominently mention this on form 1040. A statemnt such as ¨If you paid a foreign account fine you may have some of the money refunded. See IRS website for details." There, 20 words without legalese. The IRS shouldn't expect people to find out on their own.<br /><br /><br />Finally, heartfelt thanks to Nina Olson and everyone at TAS for the multi-year effort.Guestnoreply@blogger.comtag:blogger.com,1999:blog-1519969502186924526.post-1419072654530138552015-01-16T08:48:03.471-06:002015-01-16T08:48:03.471-06:00A lot of interesting points. In particular, the on...A lot of interesting points. In particular, the one about multiple, overlapping reporting requirements (especially applicable for expats). For example, in what world should an account that is reported by a QI (and for which the IRS receives 1099) be subject to the FBAR and/or Form 8938 penalties?gottaloveUStax1noreply@blogger.com