Scarinci Hollenbeck, LLC
The Firm
201-896-4100 info@sh-law.comFirm Insights
Americans Report Hidden Income Under Quiet Disclosure Agreements
Author: Scarinci Hollenbeck, LLC
Date: May 13, 2013
Key Contacts
Back
The Internal Revenue Service has relied heavily on its Voluntary Offshore Disclosure Program to find tax law violators and recoup billions in hidden or unreported offshore tax funds, penalties and interest. However, a new government report reveals that the number of individuals reporting hidden income is on the rise, but some may be relying on another reporting method instead of the voluntary disclosure program.
The Government Accountability Office released new data indicating that thousands are likely relying on quiet disclosure agreements to report hidden income from foreign accounts without paying interest and penalties. Quiet disclosure agreements refer to a technique in which taxpayers attempt to avoid penalties by filing amended returns that report offshore income from previous years. As hidden income from foreign and offshore accounts can amount to billions of dollars, analysts note that quiet disclosure techniques – and the loss of interest and penalties – may lead to lost opportunities for the IRS to make progress in closing the tax gap.
The report found that the number of people reporting foreign accounts to the IRS almost doubled to 516,000 accounts from 2007 to 2010. The GAO noted that the sharp rise in people reporting account information suggests that fewer people are taking part in voluntary programs and simply reporting their income quietly.
“IRS has detected some taxpayers with previously undisclosed offshore accounts attempting to circumvent paying the taxes, interest and penalties that would otherwise be owed,” the report said. “But based on GAO reviews of IRS data, IRS may be missing attempts by other taxpayers attempting to do so.”
The GAO noted that only 39,000 people applied for the IRS amnesty program, meaning that thousands more are likely relying on quiet disclosures. While the IRS is not required to accept GAO recommendations for how to manage tax collection efforts, the agency is encouraging the IRS to analyze first-time offshore account reporting trends and implement new detection strategies to better identify those using the quiet disclosure method.
- Practices: Tax and Trusts & Estates
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Related Posts
See all
Section 363 Sales in Bankruptcy: What Businesses, Lenders, and Buyers Need to Know
When a company enters Chapter 11 bankruptcy, many assume the process will culminate in a lengthy reorganization plan. However, distressed businesses are increasingly being sold through a different mechanism — a sale under Section 363 of the United States Bankruptcy Code. A Section 363 sale allows a company, as a debtor-in-possession in bankruptcy, to sell […]
Author: John D. Giampolo
Zoning Laws Explained: What You Need to Know Before Buying Property
Before buying property, it is critical to determine whether local zoning laws may affect your plans. If you plan to redevelop the property, you will want to confirm that local zoning regulations permit development as intended. If acquiring property that is already developed, you must verify that the use is permitted in the underlying zoning […]
Author: Wendy Rubinstein Quiroga
Special Needs Trusts in New Jersey: Planning for Your Loved One’s Future
For parents of a child with a disability, estate planning raises concerns that go well beyond deciding who will inherit their assets. Parents may spend years making sure their child has the right care, services, and support. Eventually, they must also confront a difficult question: Who will take over when they can no longer do […]
Author: George McGowan
What Every Real Estate Investor Should Know Before Buying a Rental Property
Before buying a New Jersey rental property, an investor should verify realistic operating numbers, the property’s legal and regulatory status, lead-based paint and flood compliance, the existing leases and tenant protections, and the right ownership structure. A rental property is more than a piece of real estate; it is an operating business subject to legal, […]
Author: Donald M. Pepe
Can You Change an Irrevocable Trust in New Jersey?
In New Jersey, an irrevocable trust can sometimes be modified even though its name suggests otherwise, and one of the primary tools for doing so is a process called decanting. Whether decanting is available depends on the specific terms of the trust and the discretion given to the trustee. Key takeaways: New Jersey has no […]
Author: Marc J. Comer
How Intellectual Property Valuation Will Impact Business Transactions
Intellectual property valuation determines the monetary value of a business’s IP assets, and it drives outcomes in licensing deals, joint ventures, mergers and acquisitions, financing, and ownership disputes. The most valuable assets of a business are often the things that cannot be seen or touched: a proprietary process, a copyrighted work, brand recognition, or the […]
Author: Jay McDaniel
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.