What Is The Reason That Now Makes You Want To File Taxes?

By: Pete
Date posted: 01.23.2012 (5:00 am) | Write a Comment  (0 Comments)

      Post a Comment

In the past few years, thousands of Americans have decided to file taxes to the IRS even though they had not done so in the past. Not only that but thousands more who were reporting suddenly decided to declare income and assets that had been held offshore. Why? For many, it’s been all about reacting to the IRS’ actions. In fact, the 2009 Amnesty program that made it possible for US tax payers to report such income & assets, and face no penalties or prosecution if they agreed to pay taxes on them turned out to be a great success.

The IRS commissioner reported to the Wall Street Journal that they have collected $4.4 billion from 33,000 people who did come forward. Offering that program alone would probably not have been enough but the IRS has been very agessive and public about its intentions to find those who are acting illegally. There are 2 major ramifications here:

-Individuals who like me were not fully aware of their duties as US citizens heard a lot more about it through the media
-Individuals living in the US and abroad became much more fearful of getting caught and being prosecuted at some point.

Suddenly, those who were acting illegally to avoid paying taxes seemed much more foolish. There are so many perfectly legal ways to diminish tax bills that how smart would someone be to go down the “illegal road”? For most US citizens that live in Canada such as myself, there are really no benefits to not declaring. Why?

-In almost all cases, no taxes will be owed since the Canadian government charges such high tax rates and the US-Canada tax treaty makes those taxes paid deductible for taxes owed to the IRS.

-While no money is owed, by the simple act of acting illegally, citizens such as myself could expose themselves to penalties going up to jail time

The only downside really is taking the time to do so. It is considerable but very much worth it in my opinion. If you have kept proof of income, taxes paid, etc from years past, you should be more than capable of following the same route that I ended up taking.

For Those Brave/Stupid Ones That Choose Not To File…

I have one message for you… Be careful. Increasingly, the IRS will have the poer to gather data about you. In fact, starting in 2013, Canadian banks will be forced to report some of the data concerning individuals that the IRS suspects are hiding data. Sure, you might think that you are such a small fish and that it wouldn’;t be worth it for the IRS to go after you. I’ll tell you this.. At some point the IRS will go after a few individuals not for the money but in order to set an example, to encourage more “illegal citizens” to come forward. Do you really want to take that risk?


No Comments »

No comments yet.

RSS feed for comments on this post. TrackBack URL


Leave a comment