A tax-related blog can hopefully be forgiven this time of year for recurrent reference to a theme that is playing out in a broad-based way and with strong relevance for a large number of American taxpayers.
That focus is simple and succinct, namely this: IRS power globally.
We most recently noted the ever-expanding global reach of the Internal Revenue Service in our March 11 blog entry, noting therein that it “can sometimes be on display in a manner that can surprise and even amaze.”
And, we added, the heavy hammer wielded by the tax agency across the world is “understandably raising many questions.”
Here’s one such question, which couldn’t possibly be a more compelling self-posed query for many filers and some of our readers:
To what extent can the Internal Revenue Service penalize me for my failure to divulge information regarding an overseas bank account?
Some people might want to just close their eyes or gloss over the following paragraph.
For those who welcome truth even when it comes packaged like a bucketful of ice water in the face, here is one potentiality, as delivered in a recent media assessment on what can befall Americans who become IRS targets for nondisclosure of overseas account information.
When the math works out right (at least for the IRS), an individual could be presented with a penalty demand of as much as $600,000 on mere holdings of $20,000 in a foreign bank.
And that doesn’t include criminal penalties that could be additionally sought by the agency.
Given that there is, of course, wiggle room — termed as “mitigation guidelines” by the IRS — in given cases, the aforementioned media account advises any concerned American with questions or concerns regarding money held overseas to consult with a proven tax attorney.
Doing so could pay off in a most literal sense.