New "Streamlined" IRS Procedures Effective for Non-Resident U.S. Citizens


LOS ANGELES, Sept. 12, 2012 (GLOBE NEWSWIRE) -- The Internal Revenue Service has implemented new filing procedures for non-resident, non-filer U.S. taxpayers who unintentionally failed to file the FBAR (Foreign Bank and Financial Accounts Report), but recently became aware of their obligation to do so and wish to comply. Anyone who has a financial interest in or signatory authority over a foreign financial account must file Form TD F 90-22.1. "Non-residents, including dual citizens, who have not filed U.S. tax returns may be eligible to participate in this new program," says Brager Tax Law Group founder Dennis Brager, a tax attorney, who is a California State Bar Certified Tax Specialist and former Senior Tax Attorney with the IRS.

Effective September 1st, the new "Streamlined" Filing Compliance Procedures are for non-resident, non-filer U.S. citizens. Those who qualify under the new procedures will only have to file tax returns for three years (rather than eight under the Offshore Disclosure Program (OVDP)), and the IRS will not impose FBAR or other penalties. Participants will have to fill out a questionnaire, which, Brager adds, "will include such loaded questions as 'Did you know you had a Report of Foreign Bank and Financial Accounts (FBAR), Form TD F 90-22.1, filing requirement when you failed to file an FBAR?' and 'If you used a tax professional, did you disclose the existence of the accounts/entities you hold outside your country of residence to your tax professional?'"

In order to qualify, taxpayers must have lived outside of the United States since January 1st, 2009, cannot have filed a U.S. tax return during the same period and must present a "low level compliance risk."

"It is important to note that the new procedure provides no protection from the risk of criminal prosecution," comments Brager. Once a submission is made, if the IRS determines that the Streamlined Compliance Procedure is not appropriate, the taxpayer may not participate in the OVDP, another strategy to reduce FBAR penalties. "For these reasons, the Streamlined Compliance Procedure is extremely risky for taxpayers who meet the guidelines for the 2009 through 2011 period, but have substantial offshore compliance issues in prior years."

"There are other options," adds Brager. "I encourage anyone who has a foreign account and who has not filed an FBAR in the past to consult with a qualified tax attorney to consider whether or not to participate in this new program or any other disclosure program. If the IRS discovers the account first, the penalties can be severe."

Based in Los Angeles, the Brager Tax Law Group is a tax litigation and tax controversy law firm, which represents clients with tax problems and tax disputes with the IRS, the California Franchise Tax Board (FTB), the State Board of Equalization (SBE) and the Employment Development Department (EDD). All of the firm's tax lawyers were former trial attorneys with the IRS. They work with clients on available options for FBAR filing and compliance.



            

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