On September 21 2009 the Internal Revenue Service (IRS) announced the extension, from September 23 2009 to October 15 2009, of the deadline for its special voluntary disclosure programme. This is a one-off extension of the deadline and the IRS has announced it will not issue further extensions. Taxpayers who do not voluntarily disclose unreported accounts by the new deadline may face harsher civil penalties and possible criminal prosecution.

In March 2009 the IRS centralized the civil processing of offshore voluntary disclosures and offered a uniform penalty structure for taxpayers who voluntarily disclose previously unreported accounts. US persons with unreported income from offshore accounts may disclose the accounts to the IRS and pay or make arrangements to pay the taxes due. The IRS said in its September 21 announcement that it decided to extend the deadline in response to requests from tax practitioners and attorneys, thereby allowing them additional time to interview and advise clients and to prepare the paperwork necessary to qualify for the special penalty provisions.

Details of the IRS voluntary disclosure programme for US persons who have not properly reported their non-US bank and other financial accounts and offshore structures, such as foreign trusts and companies controlled by US persons, were reported in "IRS Increases Focus on Offshore Tax Matters". The deadline for certain taxpayers to file their 2008 Report of Foreign Bank and Financial Accounts, Form TD F 90-22.1 (commonly referred to as FBAR) was also extended to October 15 2009, details of which can be found in "Recent IRS Notices and Actions Regarding FBAR and Other Reporting".

For further information on this topic please contact Jennie Cherry or Rashad Wareh at Kozusko Harris Vetter Wareh LLP by telephone (+1 212 980 0010), fax (+1 212 202 4484) or email (jcherry@kozlaw.com or rwareh@kozlaw.com).

 

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