To be able for interested taxpayer to join the disclosure program, they are required to rebuild and gather necessary documents including the detailed history of the taxpayer’s account and assets, source of the income, and the disposal income obtained or used each year. Applicable tax rate and other aberrant amount of taxes, interest rates and reduced penalties will be determined by the tax authority based on the documentations that were submitted.
Atlanta, GA -- (SBWIRE) -- 01/12/2015 -- The strong campaign to fight tax evasion that is becoming rampant worldwide appears to be the typical yet an essential agenda that many governments and tax authorities are hardly working on to push through. And introducing a voluntary disclosure program in the tax field to force non-compliant taxpayers to step forward and 'come clean' is expected to lessen the cases of tax evasion that limps the economy with many revenue losses it generate each year.
Because of low tolerance towards hidden undeclared funds and undisclosed assets or accounts located abroad, heavy losses in the annual revenue were experienced by the government. And having a disclosure program to aid these losses is one of the resolutions that tax authority were eyeing to confront tax evasion effectively. Though tax evasion has become an unavoidable issue that every nation has to deal with, this program is anticipated to lift the burden that every taxpayer has to shoulder from paying a hefty sum of tax penalties and interest fees yearly.
What makes voluntary disclosure a must to be widely imposed and utilized is that complete and accepted disclosure program of such will allow reasonable reduction on the amount of penalty fees that the taxpayer has to pay. Furthermore, it guarantees taxpayer in this program that they will not be criminally prosecuted due to their failure of filing their income tax returns and declaring existing foreign assets.
Still, taxpayers that had formal knowledge as the activities of access, inspection, verification or any activity in relation to tax audit or criminal investigation against the taxpayer commences; the request to join the voluntary disclosure program may not be submitted nor accepted due to the violations that the taxpayer had committed and had fallen within the request.
To be able for interested taxpayer to join the disclosure program, they are required to rebuild and gather necessary documents including the detailed history of the taxpayer's account and assets, source of the income, and the disposal income obtained or used each year. Applicable tax rate and other aberrant amount of taxes, interest rates and reduced penalties will be determined by the tax authority based on the documentations that were submitted.
Taxpayers can also opt to elect calculation towards returns from their undisclosed accounts and assets; may it be analytic or forfeit methodical. The latter method allows application of 5% fixed amount in the account's total value at the end of each year, while a tax rate of 27% will be taxed for the subjected disclosure due year after year. Undisclosed activities abroad that had exceeded the average amount of 2 million in each fiscal year make the flat rate impossible in the voluntary disclosure program.
Yet, analytic method tends to be arduous and time consuming because it requires extensive analysis of the documents and information in hand by the taxpayer and their adviser before submitting it to the tax authority in order to determine the tax obligation susceptible to be accepted to the program.
Consequently, to make the voluntary disclosure program within the reach of the taxpayer, early determination to collect essential documents, effective time management and clarified negotiations with the tax authority about the issues at hand, is what will truly save taxpayers from being penalized.
About Interstate Tax Strategies, P.C
When it comes to Atlanta tax services, Interstate Tax Strategies, P.C. is unique in its exclusive focus on interstate sales and use tax. Ned Lenhart, CPA, is President of Interstate Tax Strategies and has been perfecting his tax consulting skills for over 27 years. He started Interstate Tax Strategies, P.C. in 2003 after serving as a Firm Director for Deloitte in its Atlanta office. Prior to joining Deloitte in 1994, Ned was a Sr. Manager with Arthur Andersen in Kansas City, Missouri. Ned also worked for the Missouri Department of Revenue where he was the Director of the Compliance Division and led the state's civil and criminal tax enforcement efforts. He also served as Deputy Director of the Division of Taxation and Bureau Manager for the Compliance Division.