Video instructions and help with filling out and completing Which Form 843 Brackets

Instructions and Help about Which Form 843 Brackets

Hi this is anthony parents of parents and parent LLP the IRS medic and welcome to part four of our 2014 guide to IRS offshore voluntary disclosure and in this video we are going to be speaking about the five percent penalty that is included in OV DP faq 52 and just a little bit about us we are parent to parent LLP where Tax Resolution attorneys it is rumored we have the biggest offshore caseload I am not entirely sure if that's true here's a picture of myself and my father and we are based in Connecticut but yes we do have clients all around the world and so we just want to talk about this 5% standard offshore penalty most people are aware that there's the the typical penny penalty is twenty seven point five percent on the highest account value and then other then you'll see that there is a twelve point five percent penalty if the account is under seventy five thousand dollars and people see this five percent and say oh well that's the that's the amount i want it's much lower well here's the thing you can't argue for this either you qualify for it or you don't there's no negotiating down inside the offshore disclosure without without opting out to get five percent and actually if you do opt out you might do better than five percent and so we're going to run through this and you're going to show you why we think five percent it's actually too high for those who acted innocently and so let's go over some of the reasons why thing is you have to look at who qualifies okay and now one number one this is a generalized test okay it's a little bit different and there's a lot of there's a little bit nuanced but generally this is the test okay number one if you are one of the people who didn't open the bank account you really haven't touched a bank account have it withdrawn more than a thousand dollars unless you were closing account and it was all funded if it was funded with us money all the taxes were paid well then you know what there's a good chance you would qualify for that five percent penalty have to mean all those okay now someone else who would qualify is someone who didn't even know they were a US citizen and typically where this happens is when someone someone who their parents came to the US may be ambassadors or here on business and were born in the US went back to a foreign country never really thought they were US citizen and just found out recently that you know your citizen is imposed upon you if you are born here well that's a kind of person who would get a five percent standard penalty on the highest balance of their account the other type is an expatriate someone who's been living overseas for all the years that they have been disclosed and someone who did comply with all foreign tax requirements it has less than ten thousand dollars of us source income okay what's nice about this if you do qualify for this five percent is if that you have real estate in the mix you don't have to conclude that in the penalty base whereas the other ones you do so it is a benefit overall we have some some tremendous problems with the five percent penalty okay because if you qualify for a five percent penalty don't these qualify the qualifications support reasonable cause reasonable cause and that's really the test that no f bar penalty should be assessed at all if you have reasonable cause you can ask for a 0% penalty during an opt out so why not opt out instead of paid five percent well in some cases it does make sense it makes sense not to opt out and if you have a small case value you know it's just not worth your time and money to to opt out and I guess there's there some risk but you know we really haven't seen a lot of people with with risk if this if you meet these qualifications it'd be very difficult to get a criminal or there will be here difficult to assess a high high amount you know something more than non willful so yeah I guess there's some risk but it just doesn't seem if you actually met all these criteria that it's it's a big risk so it's really when you start having an account value of two hundred thousand dollars more or assets and you don't qualify number three that's when it really starts to get cost effective and worth the risk to consider opting out and argue why you should not be penalized for one dime and the thing is is that what we've what we've learned recently and as we've been going on this is there are very successful opt-outs that we've had and most people are looking for some guidance they want to see that other people have succeeded so I can tell you that people have succeeded in getting reduced penalties and we have helped people get these reduce penalties as we're moving along where we feel a little bit more secure about telling people when to opt out otherwise we wouldn't be sharing what we know about the process and how things have been moving on and if you're looking for more information about the OV DP in general we're going to suggest you subscribe to this channel we're going to be coming out with part 5 of the arvo V to V DP guide and also go to IRS medicom our blog there and we're constantly updating information there but how things are moving on with OV DP and also in our regular Tax Resolution practice if you're looking to talk to someone about