Attention San Francisco Residents – IRS OVDP Program Gives Tax Amnesty to Those With Foreign Taxable Income
June 19, 2012. In January of this year, the IRS announced a new tax amnesty program for US citizens that have income abroad. For example, a San Francisco resident who has a business in China and whose business is profitable, is generating taxable income based on that foreign or overseas income. That person is liable to pay US income taxes on that income earned in China, even though the person is a US resident living in San Francisco.
Many people did not realize that this was the case, and so they fell out of tax compliance by not reporting their overseas income. According to the press release on the IRS website, the IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.
“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.” (http://www.irs.gov/newsroom/article/0,,id=252162,00.html).
Benefits of a Tax Amnesty for San Francisco Residents
The new, 2012, program gives a tax amnesty to anyone, including of course people residing in San Francisco, California, who comes forward and declares past income earned overseas to the IRS. Participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.
Safe Harbor CPAs Assistance for Taxpayers with Overseas Liabilities
Taxes are complicated enough, and they are even more complicated when you have taxes for USA income and taxes for overseas income. We recommend that our clients come in for a consultation with an expert CPA on their tax situation, whereby we can advise on what taxes are potentially owed due to foreign income and strategize on how best to minimize the tax liabilities going forward. Our job at Safe Harbor CPAs is to fight for every legal strategy to minimize your taxes, including those for overseas income. Call 415.742.4249 or email us for a consultation!