Ohioans with income held in Swiss bank accounts have a one-time opportunity to disclose any unreported income in these accounts by March 1, and partially avoid penalties.
The Ohio Department of Taxation has created the Ohio Offshore Voluntary Disclosure Program for taxpayers holding accounts in Swiss banks who have not previously reported the full extent of this income. The program offers eligible taxpayers the opportunity to limit the penalty they pay to 15 percent of the tax due.
Ohio's voluntary disclosure initiative was prompted by an August 2009 Internal Revenue Service agreement with the Swiss government. This agreement specifies that the Swiss government will direct the UBS bank to turn over information to the IRS on thousands of accounts held by Americans. The Swiss government has also agreed to review and process additional requests for information from other Swiss banks.
The IRS will share the results of its examination of these accounts with Ohio and other states under long-standing information-sharing agreements. The IRS recently launched its own voluntary-disclosure program for affected taxpayers.
The Department of Taxation may partially abate the penalty on any taxpayer who underreported income in prior years provided that it is disclosed by March 1, and the taxpayer meets the program's other conditions, outlined below. These taxpayers will then owe the tax due plus interest, and a penalty equal to 15 percent of the tax due. Taxpayers who do not come forward, and who are later identified by the Department of Taxation through information provided by the IRS, will face much stiffer penalties.
In order to enter the voluntary-disclosure program, taxpayers must disclose the underreported income and provide the following information:
*A cover letter stating an intention to enter the Ohio Offshore Voluntary Disclosure Program.
*A description of the source of funds or other assets in each account.
*The date the initial deposit was made or the date on which the taxpayer took control or ownership of each account.
*Documentation indicating whether the principal (which includes initial deposits and all subsequent contributions) has been taxed or untaxed and the tax years involved.
*The amount of potential tax liability.
*Whether the taxpayer participated in the IRS Offshore Voluntary Disclosure Program.
The information described above should be sent by e-mail to TaxDisclosure@tax.state.oh.us. Taxpayers will have 60 days after their initial contact to the department to submit all pertinent documents and necessary payments.
A fuller description of the program and other information is available at the information release located at the URL, tax.ohio.gov/divisions/communications/information_releases/income/IT_2009_02.stm.
Comments