News 24 Jun. 2021
Curtis successfully defends foreign states' procedural privileges in the UK Supreme Court
News 23 Jun. 2021
Ibrahim Elsadig joins Curtis as Partner in Dubai
Client Alert 24 Feb. 2022
EU, UK, Japan and Australia Impose Sanctions on Russia
News 09 Aug. 2021
Curtis, Mallet-Prevost, Colt & Mosle enters into association with Chevalier Law in Singapore.
News 06 May. 2022
Curtis Advises Terna Group on the Sale of its Latin America Power Transmission Assets to CDPQ
Publications 05 May. 2022
Marie-Claire Argac, Simon Batifort, and Cyprien Mathié share highlights from “Affaires d’Etats: Practical Considerations When Defending States in International Arbitration” on Kluwer Arbitration Blog
Event 26 Apr. 2022
Claudia Frutos-Peterson Speaks at CAI Costa Rica’s 13th Congress of International Arbitration
News 21 Apr. 2022
SCOTUS Upholds U.S. Colonialism under the U.S. Constitution
Client Alert 23 Mar. 2022
The Dubai International Arbitration Centre (DIAC) has launched the DIAC Arbitration Rules 2022
Event 22 Nov. 2021
Partner Antonia Birt spoke at ADGMAC and AIAC Webinar Series: Webinar 5 - Disputes in Fintech and Complex Technology in MESEA
News 10 May. 2022
Juan Perla’s Argument in D.C. Circuit Featured on Audio Arguendo Podcast
Client Alert 21 Apr. 2022
New Laws Targeting Assets of Russian Oligarchs: The U.S. Announces Task Force KleptoCapture and the Kleptocracy Asset Recovery Rewards Program
Client Alert 19 Apr. 2022
U.S. President Biden Expands Export Controls Imposed on Russia and Belarus
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 May 2009
In our April 2009 Client Alert, we described an Internal Revenue Service ('IRS') initiative to encourage taxpayers who hold assets in foreign financial accounts to disclose the holdings through the IRS voluntary disclosure process ('Initiative'). On May 6, 2009, the IRS published frequently asked questions and answers ('FAQ') that clarify issues raised by the Initiative.
One issue of particular interest to many taxpayers is the effect of the Initiative on a taxpayer who failed to file Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts ('FBAR'). Generally, a taxpayer is required to disclose foreign accounts by filing the FBAR. Failure to file an FBAR may subject a taxpayer to an annual penalty of up to 50% of the account balance for each FBAR that is not filed. Under the Initiative, the 50% annual FBAR penalty is replaced with a single penalty of 20% of the account balance. However, in many situations, taxpayers actually have reported and paid taxes on the income derived from foreign accounts but, being unaware of the FBAR requirement, never filed the FBAR. A taxpayer in such situation should not use the voluntary disclosure process, according to the FAQ. Instead, the taxpayer should, by September 23, 2009, file the delinquent FBARs along with copies of their tax returns for all relevant years and a statement explaining why the FBARs were filed late. The IRS will not impose a penalty on such taxpayer for the failure to file the FBARs.
In other situations, some taxpayers with undisclosed foreign accounts have belatedly filed amended returns to report and paid tax on the income generated by such accounts, without otherwise notifying the IRS. The FAQ encourages taxpayers who made such 'quiet disclosures' to come forward under the voluntary disclosure process by September 23, 2009 to take advantage of the penalty framework under the Initiative. Taxpayers who wish to use the voluntary disclosure process should send a letter to the appropriate IRS agent stating the desire to make voluntary disclosure and providing other required information. A taxpayer is expected to file correct delinquent or amended tax returns for tax year 2008 back to 2003.
The FAQ also provides clarification on other issues in connection with the Initiative and the voluntary disclosure process. Taxpayers who seek to take advantage of the Initiative should consult tax advisors in regard to its requirements and implications.
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