Time is very short to take advantage of a semi-amnesty program offered by IRS to induce US expats to “come in from the cold” if they have not filed the proper tax returns, schedules, or paid taxes due from living or working abroad.
U.S. citizens are required to file returns every year, no matter where you live or work in the world. Some are afraid to file their returns because they have put them off for so long. Often little or no tax is due anyway, due to US foreign earned income exclusion and foreign tax credits.
This is a dangerous practice that leaves the homeowner in a constant state of tension. IRS has a successful program to force foreign banks and other financial institutions to disclose names and information about all US citizens who have accounts. They match that data against the tax returns filed by those citizens.
Entering the Offshore Voluntary Disclosure Program will avoid criminal action and will also set a predetermined limit on the amount of penalties which may be imposed by IRS. The program ends September 23, 2009.
This Disclosure Program appears to be quite complex. The accountant/attorney who prepared our Forms 3520 and 3520(A) is Don D. Nelson. He also writes a column in the Gringo Gazette, in an English language paper in Baja.
If you need to take advantage of this program, we suggest you contact Mr. Nelson or another accountant who specializes in income tax situations for U.S. citizens living abroad: