.png)
.png)
The USA's Internal Revenue Service (IRS) is to introduce a procedure to help American citizens living overseas catch up with their tax filing, without risk of punitive action.
Non-resident individuals who have not kept up to date with their US tax-reporting obligations, and who are not likely to be compliance risks, will be able to meet their requirements without being hit by penalties or facing additional enforcement procedures.
The IRS expects such taxpayers to generally have simple tax returns and owe $1,500 or less for any of the years covered.
People who make use of the new terms will be required to file their delinquent tax returns, along with information returns, for the past three years, and to file outstanding reports of foreign bank and financial accounts for the past six years. Payment of federal tax and interest due must accompany submissions.
Submissions from taxpayers who present a higher compliance risk will be subject to a thorough review and may be subject to an audit, which could cover more than three tax years.
The IRS is also introducing measures to allow resolution of issues relating to foreign retirement plans. In some circumstances, tax treaties allow for income deferral under US tax law, but only if an election is made on a timely basis.
In a separate move, Uncle Sam's taxman has tightened the requirement of individuals with offshore accounts, obliging a taxpayer to notify the US Department of Justice of a challenge in a foreign court a disclosure of tax information by the indigenous government.
Failure to comply will invalidate eligibility for the offshore voluntary disclosure programme.
