Warning: Please read the first two comments to this post before accepting at face value the advice of Medic Blog (the editor).
After entering OVDI/P, American expats later learned that such was only meant for tax cheats and not for them. Now, it seems that the same may also apply to soft/quiet disclosures. Are soft/quiet disclosures considered to be a “trap” to punish those who filed old FBARs as being “tax cheats”? Is there anything that an American expat can do without being accused of being a “tax cheat”?
May 31, 2013
…John and Mary made the mistake of amending their past tax returns and filing their old FBARs. On these returns, they were required to put down account numbers and bank information.John and Mary fell into the IRS’s trap. Now the IRS has all the information it needs and if audited, the burden of proof is on John and Mary that they did not commit a willful violation of FBAR. A willful FBAR penalty is 50% of account value. And this can be assessed for multiple years.
What John and Mary must do right now about their soft/quiet disclosure
If John and Mary amended their tax returns and filed delinquent FBARs, they have provided the IRS with all the information they need to identify their tax accounts for a possible soft disclosure. Essentially John and Mary have raised their hands and said “WE ARE TAX EVADERS, HERE IS ALL OUR INFORMATION. PLEASE COME AND PENALIZE US AS MUCH AS YOU CAN.”
Then, it is just a matter of time before they will be faced with the most expensive and lifestyle changing bill of their entire lives.
Get into the OVDP — now!
Read more at Medic Blog
At what point does this become a human rights violation, or better yet, under which conditions is this not a human rights violation? In relation to Eritrea, the only other nation in the world with a diaspora tax, such behavior is considered as being a human rights violation.
On the basis of NRK information about harassment of Eritrean citizens in Norway, the Norwegian authorities consider taking this up with the Eritrean authorities as a possible violation of human rights, says Imerslund to NRK.
Source: Asmarino Independent
the collection of the 2% tax collected by the Eritrean government from Eritreans in diaspora as extortion is unlawful.
Thank you Michael for checking back in on us, and giving us that news. Much appreciated.
Perhaps it will help those abroad (and hopefully new immigrants with pre-existing accts) who would be bankrupted by either fees or penalties or both – so that they can find some peace of mind and end these years of harmful anxiety and stress: some will become compliant in order to have the option of remaining US citizens – but with fuller awareness of what the ongoing exclusive high membership and other costs of that will be forever for those living abroad, and others will now become compliant in order to formally and successfully sever their US status and be free once and for all.
I predict that there will still be great numbers of the latter, as there has been no indication that anyone cares or values what happens to the millions born and/or living abroad, for any purposes other than raising revenue and gathering data for the US by any means possible.
Not so obscure that I didn’t notice. 🙂 Thanks for posting it.
This has been getting some attention after Allison Christians wrote about it
We have been discussing it on another thread
Will the IRS finally come to its senses and do the right thing? Color me skeptical, but we shall see.
If they do nothing about new immigrants to America that they have been grinding into fertilizer, then I would say it is only a partial solution to the benign non willful failures which they can still use to extract ridiculous penalties in their search for revenues.
The IRS bureaucracy are morally bankrupt, and I don’t expect that to change. I am pretty sure, it will come with complex rules, FAQs and technical guidance which will still create obstacles for those wishing to be compliant.
And finally, they have a BIG problem to overcome, and that is the lost of TRUST. Do you trust them? Not me, but then they have already extracted their oil from me and I am sure they are not suggesting that they will give it back. I hope it helps some, but I am in the wait and see mode.
Seconding Just Me. Thanks for your post, Michael. So glad I listened to your advice and become compliant forward 3 years ago. It’s been hard psychologically on me, and I was hoping each day that they might release something like that before the SOL expired for me. I hope it will help others.