IRS Revokes Voluntary Disclosure Status

In a move that could result in an end to IRS voluntary disclosure participants with offshore accounts, the IRS rescinded approval to participants who were previously granted inclusion in the voluntary disclosure program. Tens of thousands of taxpayers have participated in one of the three recent IRS voluntary disclosure programs of 2009, 2011 and 2012, providing details of banks in more than 100 foreign countries and jurisdictions, raising more than $4.4 billion in taxes. Suddenly, however, dozens of those participants, notably with accounts in Israeli banks, are receiving a curt letters from the IRS indicating the taxpayer has been disqualified. It is not clear whether it is because the taxpayers did not provide complete and full disclosures, or if this has to do with investigations of accounts prior to the application of the voluntary disclosure. Thus far, only taxpayers with accounts at Israel’s Bank Leumi and Mizrahi Tefahot Bank have been affected. Stay tuned for more details.