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.