Citing the potential impact of Hurricane Irene, the US Internal Revenue Service has extended the due date for offshore voluntary disclosure initiative requests until 9 September. The original deadline was 31 August.
US citizens or green card holders who still wish to participate in the programme need to submit identifying information to the IRS Criminal Investigation Office and a request for a 90-day extension to the IRS Austin campus. Under the voluntary disclosure initiative, participants can resolve their past US income tax and related obligations by paying all income tax due for the years 2003-2010, along with penalties, including the special offshore penalty, plus interest.
Depending on the participant’s history and assets, the special offshore penalty can range from 5 per cent to 25 per cent of financial assets or property. Participants may be eligible for the 5 per cent penalty, applied only to financial assets, if they reported all of their income to their country of residence and paid the taxes (if applicable) due on such income to that country, and have US$10,000 or less in unreported annual income from US sources. Other participants may be subject to a 12.5 per cent penalty if their offshore accounts or assets did not surpass US$75,000 in any calendar year covered by the initiative. Other participants may be subject to a 25 per cent penalty.
Hurricane Irene caused billions of dollars of damage to the East Coast and Northeast US states, cut off electricity to at least three million customers and led to some 20 deaths, according to initial news reports.