In a recent article posted by CNN Money, the IRS is going to be looking into offshore accounts a bit more closely than they used to. If you have an offshore account that you haven’t reported on your taxes in recent years, and the IRS finds out about it, the penalties are outrageous.
If you failed to report your account at all, even if it was a mistake, you can expect to pay some hefty penalties. The law has been there for some time, but as of this year the IRS is getting a bit more leeway to enforce this law. Better to report your account then to let the IRS find it, according to CNN Money, if the IRS finds it and thinks you were hiding it, they will penalize you much more than if you report it first.
Imagine owing up to $600,000 in penalties on, say, a $20,000 bank account simply because you didn’t report it to the IRS. Read the full article here….
To further that point, the IRS is also going to be nitpicking this year. They can claim you to be “willful” in an instance where you weren’t even aware you were doing something wrong. Just one small mess up on your tax documents can be claimed as fraud and cause jail time or a hefty fee. Deducting a family vacation, among other small instances like this, could cause you severe trouble with the IRS. They can claim that you did these actions with intent to lie on your return. So the IRS can say that we are willful when we might actually be innocent, yet they can lose important documents and have scandal written all over them.
In short, the IRS can say you’re willful in a variety of circumstances that you might think are pretty innocent. Conversely, it may take a lot to show willfulness on the part of the IRS. Remember President Obama’s remark to Fox News in February that there was “not even a smidgen of corruption” at the IRS? Now we’re waiting for all those recovered emails and wondering if they will link the White House to confidential taxpayer data. Continue reading here…
In summary, as the IRS buries itself in more scandal, they are also getting stricter with the US population on their taxes. Make sure you are in the know to avoid catastrophic penalties.