The IRS's special voluntary disclosure initiative for taxpayers who previously did not disclose foreign financial accounts expired October 15, 2009.  By volunteering information during this initiative, taxpayers were able to avoid many of the civil and criminal penalties that otherwise would apply.  The special initiative has been viewed as very successful, as more than 14,700 taxpayers came forward.

Taxpayers who did not come forward during that special initiative have been questioning what options remain for them now to come into compliance.  The IRS has modified its website to indicate that eligible taxpayers can still mitigate the risk of criminal prosecution by making voluntary disclosures under the IRS's regular disclosure program.  Not all voluntary disclosure submissions are accepted, and as such, criminal prosecution is still a potential outcome from a disclosure which does not qualify.  Further, even if their voluntary disclosure is accepted now, taxpayers will generally be subject to more civil penalties than would have been applied during the special initiative.

If you have not disclosed foreign accounts and are now considering this option, please contact our office.

If you have any questions regarding the information in this article, or have any other issues you would like to discuss, please feel free to contact the DZH Phillips tax department at 415.781.2500 or email cpas@dzhphillips.com.