TAX AUDIT RED FLAGS

You have foreign assets

Stashing money overseas? Then you’re probably well aware that the IRS has been ramping up its efforts to rein in offshore accounts.

Launched in 2009, the agency’s voluntary disclosure program has already raked in more than $5 billion in back taxes, interest and penalties from tax cheats for illegally hiding assets in offshore accounts.

Taxpayers are asked to check a box on Schedule B if they have an ownership interest in foreign accounts. If they then fail to provide information about those assets, it will undoubtedly trigger an audit, said Mark Luscombe, principal analyst at tax research firm CCH.

Indicating on your return that you do business in foreign countries or take many trips abroad for work could also raise eyebrows if no foreign assets are reported.

Related: IRS nabs offshore tax cheats

And the penalties for hiding offshore accounts are huge, including a fine of $100,000 or 50% of the balance — whichever amount is greater — for accounts that are willfully undisclosed.

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Article source: http://rss.cnn.com/~r/rss/money_topstories/~3/WvCYGOxSPBc/index.html

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