Blog

The Internal Revenue Service spelled out the rules for U.S. and dual citizens who want to comply with U.S. requirements to report their foreign bank accounts, noting they will not be subject to penalties in all cases where they have failed to file.


IRS said it is aware that some taxpayers who are citizens of both the United States and a foreign country are only now realizing they are required to file a Report of Foreign Bank Account (FBAR) and want to come into compliance.


In a new fact sheet (FS-2011-13) dated Dec. 7, the agency explained that taxpayers who owe no U.S. tax will not have to pay failure to file or failure to pay penalties. “In addition, no FBAR penalty applies in the case of a violation that IRS determines was due to reasonable cause,” the fact sheet said. The document provided a detailed explanation of FBAR filing requirements and the circumstances in which penalties will and will not be imposed.

Florida Gov. Rick Scott (R) Dec. 7 unveiled his $66.4 billion spendingplan for fiscal year 2012-13—a budget that would contain $35 million in tax-relief proposals for businesses.

Scott proposed increasing the corporate income tax exemption from $25,000 to $50,000. Such a move, he said, would eliminate the tax liability for more than 25 percent of businesses currently paying the tax.

The exemption hike would be the second in as many years. In June, Scott signed a bill (H.B. 7185) that, as of Jan. 1, 2012, will increase the corporate income tax exemption from $5,000 to $25,000.

The hike would effectively eliminate the 5.5 percent tax rate for nearly half of the 30,000 Florida businesses that currently pay the tax.

We've all had a new client come in the door and the first thing we want to know is their tax history.

Well, if you know what to ask for, then the Florida Department of Revenue has a specific form that provides a breakdown of taxes the DOR believes our client owes from past filing periods. The breakdown is by filing period and type of tax. This form can reveal issues that even the client didn't know about. 

After protest from Ottawa, ambassador says IRS will institute new rules that will waive penalties for people filing late. Americans living in Canada who've neglected to pay their U.S. taxes are getting a big break from Uncle Sam.

The U.S. Internal Revenue Service is poised to waive potentially massive penalties for Americans who agree to come clean and don't owe any taxes, The Globe and Mail has learned.

The new rules will be announced within weeks by the IRS, according to David Jacobson, the U.S. Ambassador to Canada, who has been swamped with complaints from anxious Canadians.

The policy shift will come in the form of new guidance from the IRS, expected to be issued before the end of December. U.S. officials said the statement will make it clear that:

1. If a U.S. citizen files tax returns late and owes no taxes, there are no penalties for failure to file.
2. U.S. citizens who were unaware of the bank account reporting requirement can file previous reports now, along with a statement explaining why they're late. No penalty will be imposed if the IRS determines that there is reasonable cause.
3. Individuals who took part in earlier amnesty programs this year and in 2009 can reapply and get back penalties already paid.

U.S. officials would also not say what would happen to people who owe relatively small amounts to the IRS.

The change doe not address the concerns of Canadian financial institutions, which complain they'll face massive costs trying to track all their U.S. account holders.  The new U.S. bank reporting rules, slated to come in 2014, could violate Canadian privacy laws.