![\"Fact](\"http:\/\/www.flottco.com\/accidentaluscitizen\/\/wp-content\/uploads\/2011\/12\/efile-tax-extension-300x249.jpg\" "\\"efile-tax-extension\\"")
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Apropos being an accidental American, last week the Internal Revenue Service published a \u201cFact Sheet<\/a>\u201d \u00a0which attempts to calm the waters upset by the widespread non-filing of US tax returns and foreign bank account reports by U.S. citizens.<\/p>\n Quite frankly, there is very little in the Fact Sheet that is either surprising or new.\u00a0 Nonetheless, it is a welcome indication that the IRS understands that a policy of overheated rhetoric about offshore tax cheating has created great uncertainty and fear among many non-compliant U.S. citizens. Furthermore, most of these people have never been in danger of suffering from the draconian penalties for non-compliance that have been reported in the press.<\/p>\n The two offshore voluntary disclosure initiatives (2009 and 2011), called OVDI I & II for short, were crafted to make offers \u201ctoo good to refuse\u201d to genuine tax criminals or serious tax evaders. The targets of these OVDI\u2019s were people, most of whom live in the United States, who deliberately directed taxable income from sources in the United States to secret offshore bank accounts with the help of international bankers. Many opened accounts in these same banks to hide assets and the income they generated from U.S. taxation, in an attempt to avoid paying lawful tax on it.<\/p>\n Tracking down cheats like theseis both admirable and worthwhile.\u00a0 Indeed, it is to be applauded by those of us who lack the kind of income or gall to pursue such brazen tax evasion. Sure, everyone is tempted to cheat a little around the edges, but most of these people were knowingly concealing millions in income and major league assets overseas.\u00a0 Last Thursday, at a luncheon address in Washington, DC, the IRS Commissioner reported that the Service has collected more than $4 billion (yep, that\u2019s a \u201cb\u201d) in taxes, interest and penalties from participants in the OVDI.\u00a0\u00a0 To put that tax cheating in perspective, $4 billion has been collected from fewer than 33,000 taxpayers \u2013 an average of about $120,000 each. Lost revenue from such evaders ultimately comes out of the average, law-abiding tax payer\u2019s pocket.<\/p>\n Yet, as I pointed out in a letter to the Commissioner in early 2009, the vast majority of non-compliant U.S. citizens, especially those living overseas, were probably unaware of the requirement to file tax returns or bank account reports. These people were hardly \u201ctax cheats\u201d, and certainly a far cry from the cheating millionaires the laws are intended to penalize.\u00a0 Although dated now, the letter can be read\u00a0here.<\/a><\/p>\n If you are an American citizen, you have annual tax filing and bank account reporting obligations regardless of where you live. Within the 2011 tax year, you will have yet another asset reporting obligation if you own certain assets overseas worth more than $50,000.\u00a0 I would venture to say that upwards of 95% of those U.S. citizens who have foreign bank accounts or live overseas were never in danger of any genuine problem with the IRS.\u00a0 If they filed their returns and their bank account reports, the Service would process them without comment in the vast majority of cases.<\/p>\n If you are an accidental American and do not now or have not for some time considered yourself an American, the Fact Sheet is of no help. You have to take action to ensure that your status as a former American is documented. Otherwise, the default position of U.S. birthright citizenship sweeps you up in the U.S.citizen category.<\/p>\n If you are and want to remain a U.S. citizen, it is time that you got yourself up to date with your U.S. tax and account reporting obligations.\u00a0 Most of the people reading this can do so without any fear that they are going to be heavily penalized by the IRS.\u00a0 You should take care and seek good advice on how to do this, but doing it is not likely to result in undue financial cost.\u00a0 Please make sure you consult a lawyer.\u00a0 Do not rely solely on an accountant, especially one who is not familiar with U.S.citizens residing outside the country.<\/p>\n IMPORTANT NOTICE TO READERS<\/strong><\/p>\n The information contained on this blog is not legal advice. \u00a0It is provided only as general information, and may or may not reflect the most up-to-date legal developments. \u00a0This information is not provided in the course of, and receipt of it does not constitute, an attorney-client relationship.\u00a0 It certainly does not substitute for obtaining legal advice from a licensed attorney. \u00a0Legal advice should take into account the specific facts and circumstances applicable to each individual situation. \u00a0Viewing this site and reading this blog does not create an attorney-client relationship between you and our firm.\u00a0 Likewise, sending me an email does not create an attorney-client relationship between you and the firm.\u00a0\u00a0 While I would be happy to hear from you, Flott & Co. PC cannot represent you until we have determined that doing so will not be a conflict of interest. \u00a0The only way for you to initiate legal representation with the firm is to call me\/us at\u00a0(703) 525-5110\u00a0(X126). \u00a0If and when Flott & Co. PC \u00a0enters into an engagement agreement with you, you will be a client of the firm, at which time we will be able to exchange information freely.<\/p>\n Unless otherwise indicated by Flott & Co. PC in writing, any US federal tax advice contained in this blog is not intended or written to be used, and cannot be used, for either (i) avoiding penalties under the US Internal Revenue Code, or (ii) promoting, marketing or recommending to another party any matter addressed within. For further information regarding this notice, please see\u00a0http:\/\/www.flottco.com\/ Apropos being an accidental American, last week the Internal Revenue Service published a \u201cFact Sheet\u201d \u00a0which attempts to calm the waters upset by the widespread non-filing of US tax returns and foreign bank account reports by U.S. citizens. Quite frankly, there is very little in the Fact Sheet that is either surprising or new.\u00a0 Nonetheless,…<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12,10,11],"tags":[30,20,8],"class_list":["post-64","post","type-post","status-publish","format-standard","hentry","category-irs-news","category-us-citizenship","category-us-tax-returns-for-non-residents","tag-foreign-bank-account-reports","tag-irs-news-regulations","tag-stephen-flott"],"_links":{"self":[{"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/posts\/64","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/comments?post=64"}],"version-history":[{"count":1,"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/posts\/64\/revisions"}],"predecessor-version":[{"id":1773,"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/posts\/64\/revisions\/1773"}],"wp:attachment":[{"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/media?parent=64"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/categories?post=64"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.flottco.com\/accidentaluscitizen\/wp-json\/wp\/v2\/tags?post=64"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}