Oftentimes, and particularly during the recent financial crisis years, businesses fall into financial distress, and business owners decide to temporarily, but illegally, “borrow” funds from the IRS by failing to pay over to the IRS the payroll taxes they withheld from their employees’ wages. The more common scenario is that the business never had enough funds to withhold the taxes in the first instance.
As we move into 2015 (a.k.a. “the second “transitional” year of the implementation of the Foreign Account Tax Compliance Act) it is very important to understand the impact this Act has on your business. This Act, known as FATCA, was implemented to attempt to curb tax evasion by requiring and encouraging the voluntary reporting of foreign financial assets by U.S.
The IRS has a huge arsenal of penalties that can be imposed against unsuspecting taxpayers related to their foreign bank accounts and investments. In the past, however, these penalties were only assessed (asserted and legally owing) if the IRS found problems with the taxpayer’s compliance during a regular audit examination.
Failure to timely file tax returns and pay the related tax is a very serious situation that must be handled sensitively with the IRS and the applicable state and local municipalities to which these tax returns were due for filing. Depending on the taxpayer’s situation, however, there are likely many options available to resolve the filing and payment delinquencies and avoid any criminal prosecution or investigation.
One Of The Richest People In United States Sentenced For Failing To Disclose Offshore Account
Since the UBS offshore account scandal, and the implementation of the Offshore Compliance Initiative in 2008, the IRS has made no secret of its efforts to enforce the foreign bank account and investment reporting requirements under the Internal Revenue Code.