Penalties in the 2011 Offshore Voluntary Disclosure Initiative are higher so that those who did not make disclosure in 2009 are not rewarded for waiting. Individuals must pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period. Participants also must pay back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties. However, taxpayers in limited situations can qualify for a 5-percent penalty. There is also a new category which imposes a 12.5-percent penalty for those whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the 2011 initiative

The IRS is processing disclosures at centralized units to more efficiently process the applications. There will also be a new section on www.irs.gov spelling out the details.

The IRS will also launch a new section on www.IRS.gov that includes the full terms and conditions on the 2011 Offshore Voluntary Disclosure Initiative, including an extensive set of questions and answers to help taxpayers and tax professionals. The web site also includes details on how people can make a voluntary disclosure.

Bob Scott

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Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards.  Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He  has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that.  A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind