If You Have Undisclosed Foreign Accounts, Here's How To Cut Huge Penalties

If You Have Undisclosed Foreign Accounts, Here's How To Cut Huge Penalties

Undisclosed foreign accounts or income can trigger big civil penalties, conceivably even criminal prosecution. Since 2009, many  foreign accounts and income came within the IRS's enormous offshore enforcement efforts. Nearly 10 years on, not everyone has entered the IRS Offshore Voluntary Disclosure Program (OVDP). The program is closing, but there is still time to get in under the wire.

IRS Warns Not To Inflate Your Tax Deductions


Some people search high and low for tax deductions. But making them up--or artificially enhancing the ones you have--isn't exactly keeping to the straight and narrow. Indeed, the IRS this year has specifically cautioned people about what it calls padding deductions. The IRS warns to avoid the temptation to falsely inflate deductions or expenses. In fact, the IRS includes the issue on its 2018 Dirty Dozen list of tax scams. In the IRS's words, the majority of taxpayers file honest and accurate tax returns each year.

However, as the IRS puts it, each year some people “fudge” their information. Falsely claiming deductions, expenses or credits on tax returns is serious, regardless of their type. The IRS notes that it happens with overstating deductions such as charitable contributions, padding business expenses, or including tax credits to which you are not entitled. Two big ones to watch? The Earned Income Tax Credit and the Child Tax Credit.

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