Hurricane Irene is huge. As of last night, 29 million people were under a hurricane warning. The effects of the hurricane are expected to be felt this weekend by nearly 55 million people, or just under the total population of the United Kingdom.
Even as the storm is downgraded to a Category 1, power outages and flooding are being reported from Puerto Rico to North Carolina as Irene marches up the east coast. Public transit has been canceled and folks are packing up and heading away from the coast and major metropolitan areas like Philadelphia and New York City.
As a result of the storm, and considering the potential impact of Hurricane Irene, the IRS has extended the due date for Offshore Voluntary Disclosure Initiative (OVDI). The original OVDI deadline was August 31, 2011 – that was Wednesday. The new OVDI deadline is September 9, 2011.
There are a few disclosures that may be made under the OVDI. The one that has gotten the most press (and affects the most taxpayers) is the Report of Foreign Bank and Financial Accounts requirements (31 CFR 103.24), or the FBAR rules, which are part of the Banking Secrecy Act. Under the existing tax laws, if the total of your interests in all of your foreign accounts reaches $10,000 or more at any point in the calendar year, you must file an FBAR by the deadline. You can read more about FBARs and compliance here.
Failure to comply can result in civil penalties, criminal penalties or both (the list of potential penalties that may apply is distressingly long). If you need to come clean, or if you’re scratching your head wondering whether you might need to file an FBAR, contact your tax professional for more details. You can also contact the IRS directly by calling 800-800-2877 and selecting option 2 or emailing FBARquestions@irs.gov (questions only to this email address, the system doesn’t accept actual FBARs).
A quick personal note: my family in North Carolina is safe. They did evacuate ahead of the storm. Thank you for your emails and tweets!
