Although it’s true that offshore accounts are often used to hide money and avoid paying tax, not all taxpayers who have offshore accounts are doing something wrong.National Taxpayer Advocate Nina Olson asserted in her annual report to Congress that the IRS is being unfair in its application of offshore account penalties. The report asks the IRS to stop viewing anything offshore as illegal.
Due to overly-zealous laws, some taxpayers who reside in the same country as their accounts are having to deal with scrutiny. Another problem, Olson states, is that taxpayers who have existing penalty agreements can’t take advantage of newer, more favorable deals. Olson also says that the IRS should allow taxpayers to discuss IRS interpretations, to appeal the interpretations, and should allow taxpayers to amend closing agreements to benefit from recent program changes.
To see the full report, visit Complete Report: 2014 Annual Report to Congress.