Paul L. Caron

Monday, September 21, 2009

IRS Extends Tax Amnesty Deadline for Those With Offshore Accounts to Oct. 15

The IRS today (IR-2009-84) extended its amnesty program (see FAQ here) for individuals who have evaded U.S. taxes through offshore accounts for an additional 22 days -- to October 15.  So far, more than 3,000 taxpayers have come forward and agreed to pay back taxes, interest, and penalties.  The IRS threatens to bring criminal charges against those who do not come forward by the October 15 deadline.

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The articles fail to pick up on a distinction that is important. There are two applicable deadlines, for two distinct filings. First, the application for the Voluntary Disclosure Program. Second, the FBAR deadline. I've read that the deadline for both has been extended, but that is not precise and people may find themselves making costly mistakes.

The FBAR deadline is extended to October 15, but only for taxpayers who have already reported foreign income and already paid tax on that foreign income. For many people, their foreign account was not reported, and tax not paid, which means that they now have until October 15 to apply for the Voluntary Disclosure Program, but the FBARs are still due by September 23!

Readers must be careful, and make sure they know which deadline applies to their unique facts.

Posted by: Asher Rubinstein | Sep 21, 2009 7:35:46 PM