New Lenient IRS Penalty Structure Encourages Voluntary Disclosure of Offshore Bank...

New Lenient IRS Penalty Structure Encourages Voluntary Disclosure of Offshore
Bank Accounts

WASHINGTON, March 26 /PRNewswire-USNewswire/ -- The Internal Revenue Service
today provided instructions to its field agents on how to deal with American
taxpayers with undisclosed offshore bank accounts. Unlike the formalized
settlement initiatives that the IRS has adopted in the past, it chose to issue
internal guidance to its revenue agents and operations personnel. The Service
stated if these taxpayers voluntarily came forward and divulge all their
offshore activities and assets, they can expect penalty relief. This portion
of the voluntary disclosure policy will only be available to taxpayers who
come forward within the next six months.

"While the penalty structure is more stringent than one might have hoped, the
IRS is at least giving some constructive guidance to persons with undeclared
accounts," said Scott Michel, a partner with Caplin & Drysdale. A taxpayer
who qualifies for the voluntary disclosure can expect a penalty that equals
20% of their highest account balance over the past six years, if they failed
to file certain informational returns with the U.S. government. This amount
is significantly less than the potential 50% penalty that might be applied to
some informational returns.

"Although there are accuracy and potential delinquency penalties, the
significantly lower penalties on informational returns should be an incentive
for many individuals who are considering a voluntary disclosure," said Jim
Mastracchio, a partner with Caplin & Drysdale.

The firm is available to answer questions regarding the intricacies of the new
penalty structure. For more information, please contact the following Caplin &
Drysdale attorneys:

Scott Michel: (202) 862-5030
Jim Mastracchio: 202-862-8859

About Caplin & Drysdale
A leading law firm, Caplin & Drysdale provides a full range of tax and legal
services to companies, organizations, and individuals throughout the United
States and around the world. The firm also offers corporate law counseling,
white collar defense, political activity law counseling, exempt organization
counseling, complex civil litigation services, and employee benefits
counseling. Visit www.capdale.com for more information.

SOURCE Caplin & Drysdale

Heather Maurer of Caplin & Drysdale, +1-202-862-7857; or Ufuoma Otu,
+1-202-449-9804, for Caplin & Drysdale