If you currently owe back taxes, one of the many solutions available is tax amnesty. This limited-time opportunity allows individuals to repay a part or all of what they owe with some of the interest or penalties waived.

If you feel that tax amnesty might be a good option for you, contact the BC Tax team. We have years of experience helping individuals repay their back taxes and look forward to using our knowledge and expertise to help you find tax relief.

Is Tax Amnesty Right for You?

Tax amnesty is a versatile solution that helps many different types of taxpayers. You may qualify for the IRS amnesty program if you:

  • Have fallen behind on tax obligations due to financial difficulties or oversight.
  • Have not filed tax returns for prior years but wish to become compliant without facing full penalties.
  • You have unintentionally or intentionally underreported incomes.
  • Your business did not set aside sales or other taxes to the government.

What Is a Tax Amnesty Program?

The main goal of tax amnesty is to allow taxpayers to pay back their taxes without harsh penalties. Several different types of federal tax amnesty programs are available.

Local Tax Amnesty

Some local governments offer tax amnesty for individuals with unpaid property taxes or other outstanding local tax obligations.

State Tax Amnesty

Many state governments use tax amnesty to encourage individuals to pay overdue state taxes on income, sales and property. These programs often target taxpayers who frequently avoid paying their taxes.

Relief for Certain Former Citizens

TheĀ relief for certain former citizens proceduresĀ help former U.S. citizens pay back taxes without high penalties or exit taxes. To qualify, an individual must:

  • Be worth under $2 million when they left the country.
  • Have an annual net income tax liability under a specific amount for the five years before leaving the country.
  • Have surrendered citizenship after March 10, 2010.
  • Certify that it wasn’t intentional that they did not pay their taxes.
  • Have a total tax liability of $25,000 or less.

Delinquent FBAR Submission Procedures

TheĀ delinquent Foreign Bank Account ReportsĀ (FBAR) submission procedures is a program by the IRS for taxpayers to submit any late FBARs without facing hefty tax penalties. This program is ideal for individuals who failed to report foreign bank accounts but don’t have any income from these accounts, and the IRS has not contacted them about these accounts previously.

Voluntary Disclose Practice

The IRSĀ Voluntary Disclose Practice (VDP) programĀ enables individuals and businesses to disclose information like unreported income, misreported assets and other tax violations. Since the individual or business voluntarily discloses this information, they can often avoid or negotiate more severe consequences.

IRS Streamlined Procedures

Streamlined Filing Compliance ProceduresĀ is for U.S. taxpayers who unintentionally did not report foreign income or assets. There are two options for this amnesty program:

  • Streamlined Foreign Offshore Procedures (SFOP):Ā U.S. taxpayers residing abroad and all eligible participants will avoid penalties.
  • Streamlined Domestic Offshore Procedures (SDOP):Ā For U.S. taxpayers living in the U.S., the IRS places a 5% penalty on the foreign asset with the highest balance.

Benefits of Tax Amnesty

While each tax amnesty program follows a slightly different process, they all offer similar benefits, such as:

  • Reducing or eliminating penalties
  • Waiving interest
  • Providing protection from criminal prosecution

Choose BC Tax for Your Tax Amnesty Needs

Tax amnesty programs are a valuable opportunity for taxpayers to resolve their back taxes. However, the window for tax amnesty is very short, making it essential to take action as soon as possible if you think you qualify. Our experienced team can walk you through the tax amnesty process and determineĀ which of our tax servicesĀ are right for you.Ā Contact our team today!

woman on a couch reaching out to tax pros for tax amnesty help

BC Tax Insights Team
Posted By: BC Tax Insights Team

Authored by the BC Tax Insights Team, this article reflects the collective expertise and experience of our seasoned tax professionals. The Insights Team at BC Tax comprises specialists with a deep understanding of various tax scenarios and solutions. With a focus on providing informative, accurate, and practical insights, our goal is to guide readers through the complexities of taxation and financial planning. Every piece is crafted with the intent to help individuals and businesses navigate the ever-evolving world of taxes, ensuring clarity and confidence in decision-making.