Voluntary Disclosure FAQ

[JohnSt]

Just curious what nelsona's take is the voluntary disclosure FAQs available here: http://www.irs.gov/pub/irs-utl/faqs-revised_6_24.pdf

Amended returns are one interesting area. The FAQ says:

"The IRS is aware that some taxpayers have attempted so-called “quietâ€￾ disclosures by filing amended returns and paying any related tax and interest for previously unreported offshore income without otherwise notifying the IRS. Taxpayers who have already made “quietâ€￾ disclosures may take advantage of the penalty framework applicable to voluntary disclosure requests regarding unreported offshore accounts and entities. Those taxpayers must send previously submitted documents, including copies of amended returns, to their local CI office by September 23, 2009."

It leaves open a lot of questions. What if a taxpayer failed to report, say, $5000 in income that would result in minimal additional tax? There is no communicated threshold for engaging in the process.

If you ask me, it's all horribly communicated and (like so many other IRS directives) lumps together all taxpayers under the same banner -- but is probably directed at a small subset of "cheats." Recently, we've heard a lot of political rhetoric that fails to distinguish between Amerian citizens living in the States using Swiss bank accounts to hide income (the true cheats) versus expatriates living abroard, trying to make a living while paying foreign tax, and then having to wade through increasing IRS requirements targeted at offshore investing.

[nelsona]

<shrug>