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Utah Taxpayers With Foreign Accounts Face Penalties

Posted on Jun 23, 2014
A recent warning by the IRS states that United States taxpayers with foreign bank accounts could face higher penalties.

The warning is directed specifically toward any taxpayer who intentionally hid money in an offshore account. The agency recently announced changes to programs for taxpayers with offshore bank accounts that have not been declared. Prior to this announcement, the IRS had issued a five-year campaign against offshore accounts. This campaign made it easier for people who were unaware of tax disclosure requirements.

Now, the IRS is announcing a steeper penalty for people with offshore accounts because they believe people not reporting these after the grace period are now willfully cheating the system. The fine for these types of accounts will increase from 27.5 percent to 50 percent on August 4, 2014.

Right now there are ten offshore banks under investigation. If an American taxpayer has money in one of these ten foreign banks, he could be at risk of paying the 50 percent tax penalty.

In addition to the ten banks listed, there are several others that the IRS has not named. These offshore accounts each surfaced due to a criminal investigation involving individuals who tried to cheat the system.

The offshore accounts under investigation are located in countries such as Switzerland, Israel, and several others. As a Salt Lake City penalty abatement attorney, I encourage taxpayers with accounts in these countries to come forward and save significant hassle down the line. Not doing so could put you at risk of losing your entire account.

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