Bauman CPA - Tax Alerts - October 2009 - IRS extends offshore disclosure deadline and FBAR relief

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IRS extends offshore disclosure deadline and FBAR relief

Responding to calls for a more reasonable deadline, the IRS has extended the end date to request participation in its offshore voluntary compliance initiative to October 15, 2009. The deadline had been September 23, 2009. The IRS also extended temporary relief for certain filers of Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), to October 15, 2009.

Disclosure initiative

On March 23, 2009, the IRS announced a temporary initiative to encourage taxpayers to disclose unreported foreign accounts. The IRS is offering a reduced penalty framework. Taxpayers must pay all back taxes plus interest and penalties and the IRS will waive the 75 percent fraud penalty. The IRS has indicated it will not seek criminal prosecution.

Initially, the IRS predicted that six months would be a reasonable time for taxpayers to gather financial records and complete the necessary paperwork to participate in the initiative. Now, the IRS acknowledged that additional time is needed and extended the deadline to October 15, 2009.

FBAR relief

The FBAR form is due June 30 of each year. Previously, the IRS extended the deadline for certain FBAR filers who have no unreported income to September 23, 2009. That deadline has also been extended to October 15, 2009.

(IR-2009-84)