Daily Tax Update - August 8, 2011: IRS Reminds Taxpayers of August 31 Offshore Voluntary Disclosure Initiative Deadline

IRS REMINDS TAXPAYERS OF AUGUST 31 OFFSHORE VOLUNTARY DISCLOSURE INITIATIVE DEADLINE:  Today, the IRS reminded taxpayers that the 2011 Offshore Voluntary Disclosure Initiative (OVDI) will expire on August 31, 2011.  According to the IRS, "Taxpayers who come forward voluntarily get a better deal than those who wait for the IRS to find their undisclosed accounts and income.  New foreign account reporting requirements are being phased in over the next few years, making it ever tougher to hide income offshore.  As importantly, the IRS continues its focus on banks and bankers worldwide that assist US taxpayers with hiding assets overseas."  The 2011 OVDI was announced on February 8, 2011, and follows the 2009 Offshore Disclosure Program (OVDP).  The IRS added, "For the 2011 initiative, there is a new penalty framework that requires individuals to pay a penalty of 25 percent of the amount in the foreign bank accounts in the year with the highest aggregate account balance covering the 2003 to 2010 time period.  Some taxpayers will be eligible for 5 or 12.5 percent penalties in certain narrow circumstances."

GEITHNER TO REMAIN AT TREASURY:   Treasury Secretary Timothy Geithner told President Obama this weekend that he would stay at the Treasury Department through the fall of 2012.

  • White House press secretary Jay Carney said, "The president asked Secretary Geithner to stay on at Treasury and welcomes his decision."
  • A Treasury spokesperson said, "Secretary Geithner has let the president know that he plans to stay on in his position at Treasury.  He looks forward to the important work ahead on the challenges facing our great country."

MISCELLANEOUS GUIDANCE RELEASED:

Notice 2011-66 (released August 5) provides guidance for executors of estates of decedents who died in 2010 regarding the time and manner of choosing to opt out of the estate tax have the carryover basis rules apply.

Revenue Procedure 2011-41 (released August 5) provides safe harbor guidance regarding property acquired from estates of decedents who died in 2010.

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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