IRS Announces Terms of 2nd Voluntary Disclosure Initiative

WASHINGTON, Feb. 8, 2011 /PRNewswire/ -- The IRS has announced a second voluntary disclosure program for taxpayers with undisclosed off shore bank accounts. "We have been expecting another program for several weeks now," said Jim Mastracchio a Partner with Baker Hostetler.  The new initiative requires 8 years of amended tax returns and places the highest civil penalty at 25 percent of the previously unreported bank account balance.  "This is another opportunity for taxpayers to correct tax return positions and file informational returns, albeit with a slightly higher FBAR penalty," Mastracchio added.  The previous settlement program set the highest penalty at 20 percent of the unreported bank account balance.

The IRS has reported that close to 15,000 taxpayers participated in initial voluntary disclosure program, which ended in October 2009.  It is estimated that another 3,000 taxpayers filed voluntary disclosures after the close of the first program. "Even without a formal settlement program, taxpayers can voluntarily correct their income tax returns and avoid potential criminal prosecution. These more formal programs provide guidelines for imposing civil monetary penalties associated with the corrective action," Mastracchio said.  The second voluntary disclosure program will close August 31, 2011.  Mr. Mastracchio is Co-Chair of Baker Hostetler's tax controversy practice. He can be reached at (202) 861-1650 or [email protected].

About Baker Hostetler

Founded in 1916, Baker Hostetler is among the nation's 100 largest law firms with 700 attorneys coast to coast, delivering the highest quality legal counsel on the most complex and critical issues facing clients today. The firm has offices in Chicago, Cincinnati, Cleveland, Columbus, Costa Mesa, Denver, Houston, Los Angeles, New York, Orlando and Washington, D.C. Its five primary practice groups are Business, Employment, Intellectual Property, Litigation and Tax. For more information, please visit www.bakerlaw.com.

SOURCE Baker Hostetler

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