IRS Poised to Announce New FBAR Amnesty
By Attorney Morris N. Robinson, CPA, LLM
Published in the Boston Business Journal, February 4, 2011, Pg. 44

 
Since 2009 IRS has granted amnesty from criminal prosecution to nearly 20,000 “honest innocents” who failed to report their offshore income to IRS and failed to file foreign bank account reports (FBARs). Recently, IRS has floated a series of trial balloons to gauge the public reaction to a massive new voluntary disclosure initiative. Steven Miller, IRS Deputy Commissioner for Services and Enforcement, lofted the most recent trial balloon two weeks ago today in a speech before the Tax Section of the American Bar Association.

We need the proposed amnesty to help bring 25,000 or more taxpayers into compliance with our tax laws. We also need the new Foreign Account Tax Compliance Act (FATCA) disclosure rules to fix our third-party tax reporting system so that future amnesties will not be as urgently necessary. We must ask:
 
·         Why have tens of thousands of otherwise law-abiding Americans ignored their legal obligations?
 
·         Why has IRS – once a feared agency of the United States – been reduced to offering a second massive amnesty in less than two years?
 
Taxes, unlike charity, are not voluntary contributions. Rather, taxes are enforced exactions. Thus, tax amnesties become necessary to collect the tax when government otherwise lacks the will or the means to enforce the tax laws.

Computers provide governments with the means to enforce the tax laws efficiently and inexpensively – without routine amnesties. But computers, to be effective, need reliable information. Thus, the United States presently requires all banks and brokerage companies doing business in the United States to report the income of their depositors to IRS computers. Some foreign banks, such as HSBC Banque Canada, make identical reports to IRS. Now we must require all foreign banks and brokerage companies to report their American depositors’ foreign-source income to IRS – as the quid pro quo for enforcing their claims in our courts and for doing business with our citizens.