IRS Relaxes Offshore Accounts Before FATCA | TheHill

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The IRS announced Wednesday that it was trying to make it easier for taxpayers to come clean about offshore accounts.

The tax agency said it was making changes to two key programs — one intended for taxpayers that willfully sought to evade tax laws, and another for those that avoided taxes despite trying to comply with the law.

John Koskinen, the IRS commissioner, said in a statement that the changes would convince more taxpayers to get up-to-date on their taxes.

“The new versions of our offshore programs reflect a carefully balanced approach to ensure everyone pays their fair share of taxes owed,” Koskinen said in a statement.

“Through the changes we are announcing today, we provide additional flexibility in key respects while maintaining the central components of our voluntary programs.”

The changes announced Wednesday amount to the IRS’s latest effort to promote tax compliance and to crack down on offshore tax evasion, which has been an agency priority for years.

The new rules also come just under two weeks before the Foreign Account Tax Compliance Act goes into effect. FATCA mandates that foreign banks tell the IRS about accounts held by U.S. taxpayers.

Under the changes, taxpayers living in the U.S. will be able to take advantage of the program for those that didn’t willfully avoid taxes. Previously, the procedures were only available to nonresidents.

The new rules also make it easier for taxpayers to take part in the program, by eliminating a required questionnaire and making those with more than $1,500 in unpaid taxes per year eligible.

Taxpayers living outside the U.S. would get another bonus, as they wouldn’t face any penalties if they successfully complete the procedures. For taxpayers living in the U.S., the penalty would be 5 percent of the assets in the foreign account.

via IRS seeks more offshore accounts | TheHill.

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