IRS Tax Tip 2011-08 lists tax evasion due to hiding of income offshore as the top tax scam. We would like to remind all US citizens and permanent residents that their worldwide income is subject to tax in US. Heavy penalties can be enforced if the income is not reported to IRS. Due to increased cooperation between all countries, don’t take your chances by not declaring worldwide income. There are also stringent requirements to report your controlled foreign entities, foreign trusts, foreign inheritance or gifts and not to forget foreign financial accounts. It is still not too late to take advantage of the IRS offshore voluntary disclosure initiative that expires August 31, 2011. Here is an excerpt from the tax tip:
“Hiding Income Offshore: The IRS aggressively pursues taxpayers involved in abusive offshore transactions and the promoters who facilitate or enable these schemes. Taxpayers have tried to avoid or evade U.S. income tax by hiding
income in offshore banks and brokerage accounts, or by using offshore debit cards, credit cards, wire transfers, foreign trusts, employee-leasing schemes, private annuities or life insurance plans.
In February, the IRS announced a second voluntary disclosure initiative to bring offshore money back into the U.S. tax system. The new voluntary disclosure initiative will be available through Aug. 31, 2011.”