Avoid FBAR Penalties Through Efficient OVDP Reporting
The IRS (Internal Revenue Service) recently has reopened its overseas voluntary disclosure program (OVDP) to help the individuals avoid the foreign bank accounts penalties. The IRS also came up with similar programs in the year 2009 and 2011 where it generated approximately $4.4 billion.
If you are an Indian citizen and is presently residing in the U.S and vice versa having overseas assets and do not want to be a part of the Foreign Bank Account Reporting Irs penalty then it is essential to pay attention to certain aspects. Recently, the IRS is becoming more rigid in its emphasis on the foreign asset and foreign practices with its residents and citizens. In addition to that, after the HSBC India incident in the 2011, where the bank was recognized to be assisting certain consumers in cancelling their Indian accounts, the focus of the IRS on the Indian Americans have maximized than before. Therefore, the IRS today is paying close attention to the tax evaders.
Overseas Voluntary Disclosure Program& its importance
According to the US IRS tax rules any person who happens to be a resident or citizen of US is required to declare their income and settle taxes on that income as well. The penalties that incur for anyone failing to report their foreign bank account of global income in the US has its own penalties. However, it is always advised to take the professional help and guidance from the corporate compliance service providers. These companies help the individuals with the following services:-
A failure in keeping to the OVDP will result in incurring three types of penalties. The very first penalty is the failure to file, where a percentage of the 5 percent tax that was due each month of delay in filing the return amount to a subtotal of 25 percentages is charged. The second type is the failure to pay, in which case the penalty happens to be 0.5 percent of the total tax amount that is due for every month of delay starting from the initial payment deadline until the balance amount is paid. This penalty does not have any maximum ceiling limit. The third type is the interest, which at a certain percentage is charged on the overall taxed amount owing to the span of time where the balance is not totally paid off along with the interest rates that change each month.
If you are an Indian citizen and is presently residing in the U.S and vice versa having overseas assets and do not want to be a part of the Foreign Bank Account Reporting Irs penalty then it is essential to pay attention to certain aspects. Recently, the IRS is becoming more rigid in its emphasis on the foreign asset and foreign practices with its residents and citizens. In addition to that, after the HSBC India incident in the 2011, where the bank was recognized to be assisting certain consumers in cancelling their Indian accounts, the focus of the IRS on the Indian Americans have maximized than before. Therefore, the IRS today is paying close attention to the tax evaders.
Overseas Voluntary Disclosure Program& its importance
According to the US IRS tax rules any person who happens to be a resident or citizen of US is required to declare their income and settle taxes on that income as well. The penalties that incur for anyone failing to report their foreign bank account of global income in the US has its own penalties. However, it is always advised to take the professional help and guidance from the corporate compliance service providers. These companies help the individuals with the following services:-
- Complete compliance
- Consult and impact Analysis
- Analysis and planning to bring down FBAR Penalty
- AMT Strategies and Foreign Tax Credit
- Mutual Fund or PFIC computations
- Preparation of forms required to participate in the OVDP program
- Preparation of Tax Amendments and Delinquent FBAR
- IRS Representation by Enrolled Agents or Affiliated CPAs and Attorneys
A failure in keeping to the OVDP will result in incurring three types of penalties. The very first penalty is the failure to file, where a percentage of the 5 percent tax that was due each month of delay in filing the return amount to a subtotal of 25 percentages is charged. The second type is the failure to pay, in which case the penalty happens to be 0.5 percent of the total tax amount that is due for every month of delay starting from the initial payment deadline until the balance amount is paid. This penalty does not have any maximum ceiling limit. The third type is the interest, which at a certain percentage is charged on the overall taxed amount owing to the span of time where the balance is not totally paid off along with the interest rates that change each month.