Becoming IRS Compliant through Amnesty Programs

The IRS Amnesty Program represents a new chance for taxpayers to become compliant. It's designed to encourage people to report assets that they failed to bring up earlier by providing them with more favorable circumstances and a wider range of options.

How Does the Amnesty Program Work

This program does not eliminate all penalties or tax. It does make it much easier for people to get caught up on taxes they haven't paid in the past by reporting their assets such as financial products or foreign currencies.

In some cases, taxpayers don't end up owning anything at all. Even if they didn't earn anything offshore, they can still use the Amnesty program to get caught up on their forms. This may protect them from future audits and back taxes by establishing a more accurate asset record.

In other cases, people who inherited assets such as offshore trusts decades ago may not have paid any taxes at the time for whatever reason. Those who use the amnesty to become IRS compliant find it much easier to square things with the IRS and figure out if they owe anything without facing legal penalties.

Why You Should Use the Program

The crux of the situation lies in the fact that the IRS is more severe with people who ignore the problem. Those who basically come clean can avoid additional fines by proving that they're clearly not trying to cheat the government out of money or shirk their tax obligations or hide income.
Although international asset protection is generally acceptable when overseen by someone who is conversant in the legal requirements, it must be reported to remain so.

Financial advisors point out that people who fail to report their assets and take advantage of the IRS's limited good graces may be putting themselves at tremendous risk for limited financial gain.
For instance, those who are only earning limited amounts of interest in places like Swiss banks aren't really making that much by hiding their gains anyway. The penalties and interest they'd pay after getting audited may far outweigh any dubious financial advantages they gained by not reporting.

If you're interested in learning more about Amnesty Programs, Nagel Law can help you with asset protection strategies to protect your estate. Contact us today to learn more.