How is it that Facebook and Linkedin magically suggest “people you may know” with so much accuracy? Being a tax guy and not a computer programmer I don’t know the exact answer, but I can say with reasonable certainty that those “friend suggestions” are not random and are instead a part of huge data mining effort to connect you to your long lost friends and high school classmates. In a report by the Treasurer Inspector General on September 21, 2011 the IRS will be utilizing similar data mining software called E-Trak to assist in finding undisclosed offshore accounts. E-Trak collects its data from multiple sources, however, the most valuable data has been amassing only recently from other taxpayers participating in the Offshore Voluntary Compliance Program (OVDI) and new FATCA regulations that recently took effect. The OVDI program requires taxpayers to disclose information such as dates, financial institutions used, and points of contact all of which gets entered into E-Trak. Similar to Facebook, the more data, the more accuracy of E-Trak’s results. So what does this mean? In essence, IRS has made offshore compliance a priority and E-Trak is getting smarter everyday as data accumulates in the system. IRS urges taxpayers to take advantage of the OVDI program. The program will reduce and sometimes even eliminate all penalties associated with offshore accounts, however, if E-Trak (IRS) finds you first, OVDI is not an option and penalties can be burdensome.
- The Entrepreneur’s guide to Subcontractor Information Reporting (Forms 1099, W9, W8Ben etc etc).
- Income Tax Compliance for Amazon FBA Sellers
- What is “Household Income” under the affordable care act?
- Deductible Alimony Becomes Non-deductible??
- Summary of American Taxpayer Relief Act of 2012 (H.R. 8)
Copyright © 2012 Greenhaus, Riordan & Co, LLP All Rights Reserved.