The Internal Revenue Service recently sent out rescission letters notifying tax agencies that, "upon further review," American taxpayers who entered into the IRS criminal amnesty program may be disqualified, according to Forbes. Bank Leumi recently came under U.S. authorities' radar for allegedly helping American account holders evade federal income taxes and commit other tax law violations. The largest Israeli bank recently announced it would allocate $91 million toward expenses relating to "investigations that are being conducted by the U.S. authorities concerning customers who are U.S. taxpayers."
Taxpayers are typically allowed to participate in IRS amnesty programs if they are not currently under audit, investigation or is listed in federal databases as having secret accounts, Forbes explains. However, if any of those circumstances are not met, they may be barred from participating in voluntary disclosure programs and face criminal penalties as well as steep financial fines and punishments. It is not yet clear why the IRS rescinded amnesty for those already enrolled in the program.
The IRS noted that while it is prohibited from commenting on specific cases, "there are a number of reasons why a taxpayer may be disqualified from participating in the IRS's offshore disclosure program. For example, a taxpayer may be disqualified if he/she fails to make a timely, truthful and complete disclosure," the agency said, according to Forbes.
IRS practices have been in question as of late, with many analysts arguing that the hard lines the agency is taking with regards to voluntary disclosure programs and its proposal to reduce whistleblower rewards may discourage taxpayers from coming forward with information.