Event 14 Oct. 2022
Curtis Provides Capacity Training to the Government of Uganda
Event 21 Sep. 2022
Kalidou Gadio Speaks at AIEN 2022 International Energy Summit
Event 06 Jun. 2023
Partner Borzu Sabahi Speaks on Panel in Tashkent Law Spring International Legal Forum in the Republic of Uzbekistan
News 15 May. 2023
Curtis represents e-commerce retailer in its fight to recover monies withheld by PayPal, the global payment giant
Event 08 May. 2023
Partner Irene Petrelli to Participate in ICC YAAF Event
News 02 May. 2023
Curtis Italy with DeA Capital in the Acquisition of Magic S.r.l
Event 07 Jun. 2023
Elisa Botero Speaks on Latin America’s H2 Potential at AIEN’s International Energy Summit
Event 23 May. 2023
Partners Luciana Ricart and Fernando Tupa Will Teach a Workshop on Hearings in Investment Arbitration for Arbanza School of Arbitration’s Online Program
Event 03 May. 2023
Dr. Borzu Sabahi to Speak at ICSID-ADGM Joint Conference: Investment Protection and Armed Conflict
Event 19 Mar. 2023
Sebastiano Nessi speaks at Bahrain Business and Legal Landscape Conference
Event 01 Jun. 2023
Curtis Environmental Chair Charles Howland to Moderate Panel Discussion on Latest Developments in Environmental Due Diligence at ABA Masterclass on Environmental Transactions
News 25 May. 2023
Curtis Files SCOTUS Amicus Brief for Distinguished Law Professors in First Amendment Retaliatory Arrest Case
News 06 Mar. 2023
Russia Sanctions at the First Anniversary: An Overview of Current Sanctions in the US, UK, and EU and How Global Companies Can Navigate Evolving and Conflicting Sanctions Regimes
Client Alert 30 Aug. 2022
The EU Adopts the “Maintenance and Alignment” Sanctions Package
Client Alert 24 Jun. 2021
Update on Virtual Notarization (Executive Order 202.7) During the COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021) — U.S. Insight
Update on Virtual Witnessing (New York Executive Order 202.14) During The COVID-19 (Coronavirus) Pandemic (Updated: June 24, 2021) — U.S. Insight
Publications April 2009
On March 26, 2009, the Internal Revenue Service (the 'IRS') announced that it has adopted a program to encourage taxpayers who have assets located offshore to voluntarily disclose both the assets and any income earned thereon (the 'VDP'). The VDP is available for the six-month period which began on March 23, 2009.
A United States taxpayer who has assets offshore: (i) generally must report, each year, information relating to the foreign financial accounts in which the assets are held on Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts ('FBAR'); and (ii) must pay federal income tax on income earned in such accounts. An FBAR must be filed each year in which the aggregate value of the taxpayer's foreign financial accounts exceeds $10,000. Taxpayers who fail to file an FBAR are subject to significant penalties that may equal or even exceed the value of the accounts. For each failure to file an FBAR, there are civil and, potentially, criminal penalties. A non- willful failure to file an FBAR may give rise to a civil penalty of up to $10,000 per year. In other situations, a taxpayer will be subject to a civil penalty equal to the greater of $100,000 or 50 percent of the value of the accounts. Under certain circumstances, an additional criminal penalty of up to $500,000 or 10 years in prison (or both) may be assessed.
In addition to the penalties for failure to file an FBAR, a United States taxpayer who fails to report and pay income tax on offshore income may be subject to penalties under the Internal Revenue Code. Such penalties include, among others, a delinquency penalty of up to 25 percent of the unpaid tax, and an accuracy penalty of 20 percent of the unpaid tax (which may be increased up to 75 percent for any part of the underpayment attributable to fraud).
Under the VDP, taxpayers may limit their exposure to the various penalties (as summarized below). To be eligible for the program taxpayers must, prior to September 24, 2009, (i) file an FBAR or amend any deficient FBAR for each of the last six years to report all foreign financial accounts, (ii) file a tax return or amend any deficient tax return for each of the last six tax years to report all income earned in such foreign financial accounts, and (iii) pay all taxes and interest due on income generated by assets held offshore during the last six years.
Provided that the taxpayer complies with the VDP requirements, the IRS may reduce the applicable penalties to the following:
However, there is no assurance that the IRS will grant these reduced penalties even if the taxpayer complies with the VDP requirements. A taxpayer whose name has been provided to the IRS by outside sources (e.g., a foreign bank) apparently may still qualify under the VDP if the IRS has not opened a criminal investigation of such taxpayer. Taxpayers will not be eligible for the VDP if they are currently under criminal investigation. Moreover, according to the IRS, 'a voluntary disclosure will not automatically guarantee immunity from prosecution; however, a voluntary disclosure may result in prosecution not being recommended. This practice does not apply to taxpayers with illegal source income.' See Internal Revenue Manual 220.127.116.11(2).
Taxpayers who seek to take advantage of this program should consult experienced tax advisors in regard to the requirements and implications of the voluntary disclosure program.
To ensure compliance with requirements imposed by the IRS, we inform you that, unless explicitly provided otherwise, any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.
Marco A. Blanco