Reply #7: the IRS is also penalizing completely innocent people.

[emcguffie]

A very good friend of mine, who is European, has lived in the US and worked here intermittently for a number of years. Her paid work here has been as a special effects make-up artist. Her volunteer work has been in human rights as the NY rep of an international NGO, and for another NGO she established herself.

She had bank accounts in Europe before she ever set foot in the USA.

She has always paid her taxes in the US very carefully. SHe owes no US tax, as far as she knows.

Because she lives here a certain number of days a year, which isn't very many, actually, she is considered by the IRS to be an "American person." American persons who have foreign bank accounts and have not declared them on their tax returns going back several years are now being penalized tens of thousands, if not hundreds of thousands of dollars, because the US decided to begin enforcing an old law that had never been enforced before. Since it had never been enforced, tax preparers and attorneys did not have it on their radar.

By putting herself in a voluntary program, to fess up, so to speak, she supposedly has cut her fines way down. Even so, they are fining her somewhere between $20,000 and $30,000. This is some percentage of the foreign account. This account is her savings account for her retirement, and it existed, as I said, before she ever set foot in the USA. And she owes no US taxes.

She has been absorbed in this mess for a long time now. And while some IRS agents admit this effort was not meant to sweep up people like her, and also admit that it is absolutely unfair and that is is obviously innocent of any real wrongdoing, they said there is nothing to be done about it. The rules are the rules, and she broke the rules. And she can stay in the program and pay this much, or opt out of the program and potentially be fined much, much more.

It is astonishing. I should look up the name of the accounts program and do an original post about it.