Hurricane Causes IRS To Extend Offshore Disclosure Deadline
Tuesday August 30 2011 | 07:40 AM

After reminding United States taxpayers earlier this month of its impending deadline, the possible impact of Hurricane Irene has forced the Internal Revenue Service (IRS) to give United States taxpayers a further period of time to participate in the 2011 Offshore Voluntary Disclosure Initiative (OVDI).

The IRS had previously confirmed that the 2011 OVDI, which was originally announced on February 8, would expire on August 31. However, due to Hurricane Irene, the IRS has extended the due date for OVDI requests until September 9.

In the 2011 initiative, individuals disclosing foreign bank accounts would pay a penalty of 25% of the amount in those accounts in the year with the highest aggregate account balance over the period between 2003 and 2010. Some taxpayers would be eligible for 5% or 12.5% penalties in certain circumstances, and participants must also pay back-taxes and interest for up to eight years.

In order to participate and be eligible for the 2011 OVDI, a taxpayer must submit their name, address, date of birth and social security number, and as much information as possible on a three-page Offshore Voluntary Disclosures Letter, on or before September 9.

In addition, a 90-day extension may still be requested, on or before September 9, by submitting as much information as possible, together with a statement of those items that are missing, the reasons why they are not included, and the steps taken to secure them.